Bernard Durkan (Kildare North, Fine Gael)
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Question 134: To ask the Minister for Enterprise, Trade and Employment the extent to which Ireland is competitive and successful in achieving inward investment leading to increased employment; if Ireland's position relative to other European countries has altered in terms of competing for such investment in the past 10 years; and if he will make a statement on the matter. [25454/07]

Micheál Martin (Cork South Central, Fianna Fail)
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The level of foreign direct investment in Ireland, relative to the size of the economy, is one of the highest in the world. Today, more than 1,000 overseas companies have substantial international operations in Ireland. These include many of the leading companies in Information & Communications Technologies, Life Sciences, Globally Traded Businesses and Financial Services. There are strong and irrefutable reasons why this is so. While having the lowest effective corporate tax rate in the EU is widely known there are other indicators that help explain why we continue to be successful in winning more than our fair share of high quality and sophisticated FDI. For example, in key sectors such as chemicals, medical devices and electronics average productivity is higher than in many of our competitors. We have the lowest tax wedge in the OECD and it has fallen faster in Ireland than in most of our competitors.

Just last week a major Irish bank published the first edition of a new foreign direct investment performance index. This compares Ireland's performance at attracting inward investment compared to leading destinations globally. It shows that Ireland continues to attract a high share of global investment projects. In the words of its Chief Economist "Ireland continues to punch above its weight when it comes to attracting mobile foreign investment". The Index put Ireland at number 2 in the EU-15 for FDI inflows.

There continues to be huge changes in the world economy and of Ireland's relative position in it. China and India are now more fully integrated into the world economy and, with the rest of Asia and Central and Eastern Europe, they provide strong competition for many activities. Our relative costs now are higher than before. We have responded nationally to these changes by positioning ourselves as the location for more advanced activities, with more qualified and better paying jobs. This is why the proposed investments, structures and policies set out in the National Development Plan 2007-2013 and National Spatial Strategy are so important.

Our focus has moved to winning research and development investment as well as specialised investment in high value services and manufacturing. All these require a labour force that is skilled, adaptable and educated. We are successful in this market because Ireland's 25-34 year-olds are more highly qualified than most of their counterparts in the OECD. Our educational performance is higher than the EU-15, the US and the OECD in this area.

I am satisfied that the policies being pursued by Government, together with the activities of the development agencies will continue to enable us to maintain the enviable position which we hold in terms of attracting foreign direct investment.