Róisín Shortall (Dublin North West, Labour)
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Question 234: To ask the Minister for Enterprise, Trade and Employment if his attention has been drawn to the fact that a number of Irish companies are outsourcing a number of their operations, in particular call centres, to other European and international countries; and the measures his Department is taking to promote job creation here in this particular area. [35709/07]

Micheál Martin (Cork South Central, Fianna Fail)
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The Enterprise Development Agencies under the aegis of my Department, Enterprise Ireland, the County Enterprise Boards, and IDA Ireland have remits respectively in the areas of, growing indigenous enterprises, and attracting and growing foreign direct investment. In addition, Shannon Development is the regional economic development agency for the mid-west region, and has specific responsibility for Foreign Direct Investment in the Shannon Free Zone. My Department has put in place a range of strategies, programmes and financial incentives to promote economic and enterprise development that will support sustainable employment throughout the country.

Ireland is building its position as a leading European provider of the next business step up from contact centres — shared services and business process centres, by offering detailed technical support and a wide range of services way beyond giving simple solutions to straightforward customer inquiries. Some are operated by outsourced suppliers, but most in Ireland are managed by the companies they serve.

Ireland has approximately between 60 and 70 shared services centres that are multilingual, pan-European and trans-Atlantic. These include major companies the size and scale of IBM or Dell. Outsourcing is often undertaken as part of a long term strategic business growth plan of Irish companies.

These companies increasingly focus on outsourcing as a strategic option. Outsourcing by indigenous enterprises is a natural stage in the growth and development of internationally trading enterprises as they seek to achieve international scale. In general, companies engage in outsourcing with the objective of enhancing corporate profitability and maintaining the international competitiveness and long run survival of the company by accessing productivity enhancing factors of production such as skilled labour, low cost raw materials and labour.

Outward Direct Investment (ODI) gives rise to a range of costs and benefits which impact on the firm itself, its stakeholders, and the Irish economy as a whole. A 2007 Forfás Commissioned report on the effect of ODI on the Irish economy concludes that ODI by indigenous firms has a positive impact on the domestic employment levels within investing firms, a positive effect on the skills levels within those companies indicating increased numbers of higher skilled employees and a positive impact on the productivity of the investing firm.

Overall the Forfás Commissioned report concludes that ODI by indigenous firms has a net positive impact on the economy. However, the creation of high-value added jobs in the context of ODI is often accompanied by a loss of low skilled jobs in low-value added activities. This may have greater impact where it happens in regional areas of the country, where alternative employment opportunities may be less readily available.

Looking to the future, neither the Government nor my Department is complacent or unaware of the varied 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 promote 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, in line with the NDP and the Programme for Government.