Bernard Durkan (Kildare North, Fine Gael)
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Question 159: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the steps she has taken or will take to discourage the relocation of manufacturing or service jobs to lower cost economies; and if she will make a statement on the matter. [45303/08]

Mary Coughlan (Donegal South West, Fianna Fail)
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Decisions to relocate companies or elements of their supply chain are a reality of the modern globalised economic environment. Companies adjust their plant location and utilisation strategies to address matters such as accessing new markets, moving production nearer to customers, meeting firm or market specific customer relationship issues, accessing technology in addition to business takeovers and consolidations. Such decisions inevitably result in flows of investment and employment across borders.

Ireland is no longer a low cost economy and therefore we must seek to develop 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. The level of foreign direct investment 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. The pipeline of new business for which IDA Ireland is competing is strong.

Irish companies also benefit substantially from globalisation as new markets and business opportunities open up. While off-shoring can contribute to job losses for firms in some sectors, productivity gains achieved through off-shoring some activities represents an opportunity to develop higher-end manufacturing and related activities domestically. Irish enterprises are adapting to the changing model of manufacturing in developed countries through increased productivity, technology levels and the enhanced skills of Irish employees. Innovation, and the productivity gains that flow from it are the new foundations for competitiveness.

The "Report of the High-Level Group on Manufacturing" contains some 26 recommendations directed at key areas of innovation and productivity leading to transformational change, reskilling and management development, which will ensure Irish manufacturers, can continue to compete successfully on international markets and provide high value sustainable employment. The group also recommended the establishment of a Manufacturing Forum, to take responsibility for progressing the implementation of the recommendations outlined in the report, this matter is currently being progressed by my Department in consultation with the Department of An Taoiseach and the Social Partners.

We continue to be one of the world's leading service exporting countries. The report of the Services Strategy Group, "Catching the Wave: A Services Strategy for Ireland", sets out new policy proposals on how we can ensure the continued development and growth of Ireland's services sector and outlines how to maximise the future returns to the country from services activities in all enterprises, both current and potential. Implementation of the recommendations– some of which are already being acted on by the Enterprise Agencies — will enable Irish service companies to exploit new and exciting opportunities, such as eLearning, business and financial services, professional and consultancy services and others.

I recently launched Enterprise Ireland's strategy for the internationalisation of Ireland's services sector, which the agency estimates could yield up to €1.14bn in new export sales for Ireland by 2010, and a doubling of exports sales in this sector to €5.25bn by 2015. On the same day I announced Enterprise Ireland's new "Going Global Fund" — a €3m government fund specifically aimed at locally traded companies that have successfully established businesses in Ireland and wish to explore opportunities to sell abroad.

Our priority remains the creation of high quality, sustainable employment, driven by companies with higher profitability, that are more technologically advanced, prove a better fit with the competitive characteristics of our economy, and consequently less likely to move on the basis of simple cost influences.