Tommy Broughan (Dublin North East, Labour)
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Question 41: To ask the Minister for Enterprise, Trade and Employment the steps he is taking to alleviate potential difficulties for Irish businesses and workers in view of the recent statements that Ireland is facing difficult economic times; and if he will make a statement on the matter. [18588/07]

Micheál Martin (Cork South Central, Fianna Fail)
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There is no evidence to support the assertion that Ireland is facing difficult economic times. In fact there are strong indications to the contrary. For example the most recent NCB Purchasing Managers Index shows that new orders hit a 12-month high and new export orders grew for the first time in 3 months. This complements data from the CSO showing increasing industrial employment and production.

The National Competitiveness Council (NCC) has, of course, drawn attention to cost pressures in the economy and the importance of maintaining international price competitiveness. To address inflation and with a view to keeping costs for enterprises under control, the Government and the Social Partners have agreed to intensify co-operation in responding to inflationary pressures within the framework of the Towards 2016 pay agreement, and especially through the work of the Anti-Inflation Group and the High Level Group on Manufacturing.

The level of Foreign Direct Investment (FDI) in Ireland, relative to the size of the economy, remains one of the highest in the world. While competition from emerging markets for FDI has intensified, Ireland continues to punch above its weight when it comes to attracting overseas investment. While our relative costs are now higher, we have responded nationally to a changing environment by positioning ourselves as the location for more advanced activities, with more qualified and better paying jobs. And with Small Business playing a key role in our country, the continued growth of this sector will be underpinned by the implementation, to the maximum extent possible, of the recommendations in the Report of the Small Business Forum

The key challenge now facing Ireland is to make the highly important cultural shift of moving from being an investment driven economy to an innovation and knowledge-driven economy. To this end, the Government, through the €8.2billion Strategy for Science, Technology and Innovation 2006-2013, aims to grow our national system of innovation. And, of course, we have the broad range of initiatives encompassed by the National Development Plan 2007-2013 which will further assist Irish-based enterprise.

As the country's economy moves to higher value added activities, providing quality sustainable jobs, some traditional lower-cost industries throughout the country are under pressure and other lower-value activities are transferring out of Ireland. This shift in the structure of international trade poses challenges to economic policy makers in all developed countries not just Ireland. The Government will continue to pursue policies to promote lifelong learning and up-skilling to improve labour market flexibility and, where necessary, ensure that appropriate training supports are provided for workers in sectors that are no longer competitive, and assist workers who lose their jobs to find alternative employment.

These positive development notwithstanding, neither the Government my Department nor the enterprise development agencies are complacent about the future challenges facing the country's economy. One of our main tasks is to ensure that Ireland remains an attractive place to do business, and to support the development of economic competencies higher up the value chain. In that regard, we continue to work to maintain and enhance 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.