Bernard Durkan (Kildare North, Fine Gael)
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Question 164: To ask the Minister for Enterprise, Trade and Employment the corrective action he proposes to take to stem the flow of the relocation of jobs from Ireland to more competitive economies; if an evaluation has been carried out into the contributory factors causing such relocation in each instance in the past five years; the conclusion reached; the remedial action undertaken to ensure that the trend does not continue; and if he will make a statement on the matter. [2706/07]

Bernard Durkan (Kildare North, Fine Gael)
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Question 1127: To ask the Minister for Enterprise, Trade and Employment the number of jobs relocated from this country to more competitive economies in each of the past five years on a county basis; the steps taken to address the issues causing the relocation; and if he will make a statement on the matter. [3034/07]

Bernard Durkan (Kildare North, Fine Gael)
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Question 1129: To ask the Minister for Enterprise, Trade and Employment the steps he proposed to prevent a further job relocation to lower wage economies; if an evaluation has been done with a view to identification of particular manufacturing areas expected to be vulnerable to relocation; and if he will make a statement on the matter. [3036/07]

Micheál Martin (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 164, 1127 and 1129 together.

The relocation of businesses within particular types of industry, and with it a certain number of jobs, is a reality of modern global manufacturing for a highly developed economy such as Ireland. The factors that influence a firm's decision to relocate are varied and complex. In addition to relative wage rates and other cost factors, these may include business takeovers, consolidations and changes in product or market focus. For these reasons it is not possible to quantify why firms relocate or the actual number of jobs which relocate to lower cost economies. While there may be some anecdotal evidence available for both, there is no system in place to capture and validate such data on a widespread basis and indeed such an exercise would be fraught with difficulty. While off-shoring can contribute to job losses for firms in some sectors, productivity gains achieved through off-shoring also represents an opportunity to develop higher-end manufacturing and related activities domestically.

The phenomenon of globalisation is changing the way economic production is organised the world over. Lower barriers to trade and improvements in transport technology are increasing the specialisation of production, resulting in global supply chains. Ireland experiences both benefits and costs resulting from globalisation. The clearest demonstration of the benefits to Ireland from globalisation is illustrated by inward Foreign Direct Investment. This has been one of the principle causes of the strong economic performance of Ireland over the last two decades. However, as Ireland has gained from the mobility of modern production and supply chain models, competition from other locations for mobile FDI has intensified.

This shift in the structure of international trade poses challenges to economic policy makers in all countries. Thankfully, Ireland has so far shown itself sufficiently flexible and adaptable to move to higher value added activities, providing quality, sustainable jobs. Furthermore, in large companies this process of transformation is often accommodated by a reallocation and retraining of staff within the company, and this on-going internal re-organisation and upskilling, resulting in improved productivity in the face of international competition does not get the same media attention that job losses do. However, there are of course cases where plants do shut down, and the resulting redundancies can be very difficult for workers and their communities. Where this has occurred to date it has mainly been confined to relatively low technology, labour-intensive activities. We are continuing to pursue policies to promote lifelong learning and upskilling to improve labour market flexibility and, where necessary, ensure that appropriate training supports are provided for workers in sectors that are no longer competitive, should they need to find alternative employment.

The principle task of government is to ensure that Ireland continues to be an attractive place to do business, and to help foster economic competencies higher up the value chain. In that regard, this government has made significant progress in working towards maintaining and enhancing our framework competitive conditions, and promoting new areas of competitive advantage by developing our R&D base, investing in critical physical and communications infrastructures, and promoting tertiary education and lifelong learning. Clearly the strategies set out in the new National Development Plan will play a crucial role in maintaining Ireland's attractiveness as an investment location.

Furthermore, it should be noted that in addition to attracting foreign investment, IDA Ireland also places significant focus on embedding existing multinational enterprises in Ireland, by encouraging such enterprises to increase the scale of Irish subsidiaries, and to also expand the range of activities undertaken in Irish subsidiaries to include less mobile types of operations (e.g. R&D activities, Supply Chain Management, etc.). This process of embedding subsidiaries of multinational enterprises makes relocation less likely.