Bernard Durkan (Kildare North, Fine Gael)
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Question 59: To ask the Minister for Enterprise, Trade and Innovation the steps he has taken to improve the competitiveness of the economy; if he will set out in order of one to five the most serious factors currently impacting negatively on the situation in this regard; the degree to which he has had discussions with the various stakeholders with a view to identifying the most suitable and strategic intervention to address the situation both in the manufacturing and service sectors; and if he will make a statement on the matter. [24423/10]

Batt O'Keeffe (Cork North West, Fianna Fail)
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The National Competitiveness Council's report, "Benchmarking Ireland's Performance", provides a comprehensive assessment of Ireland's competitiveness on an annual basis. Our competitiveness is derived from a complex set of factors, not all of which are within our control. The factors with the greatest influence on our competitiveness are costs, productivity and exchange rates with our trade and investment partners, and the overall business environment. The business environment covers areas such as regulation, infrastructure and the availability of necessary business services.

Since January 2008, Ireland has regained competitiveness as domestic inflation remains below that of our main trading partners and the euro weakened. We are seeing lower business costs, which is easing pressures on the business sector. Wage costs, asset prices and energy prices are all on a downward trend. Annual inflation fell by 2.5% in the twelve months to April, in contrast to the rest of the euro area where it rose by 1.5%. The Irish consumer price level relative to its trading partners is now back to levels last seen in 2000/2001.

The price of services to business fell by 5.7% in Q3 2009 compared to Q3 2008, with the largest price reductions in architecture, engineering & technical testing (-9.8%), and computer programming & consultancy (-8.5%). The European Commission forecast that our Unit Labour Costs will fall by 9.4% over the 2009 to 2011 period, against a projected increase of 3.5% for the Eurozone. This equates to a positive swing of 13% in Ireland's favour over the three year period to 2011.

The Government introduced an extensive package of measures to contain energy costs last summer – and this is reflected in a much improved position relative to competitors. Data released in May shows that electricity and gas prices fell for all types of energy consumers in the second half of 2009, and have moved closer to the EU average for most business users.

Competitiveness also includes boosting the total productive capacity of the economy. We are doing this, for example, through targeting R&D and Innovation to drive productivity and ensure that we have the skills and technologies available in Ireland that will give us a competitive advantage. The entire Irish economy must be a smart economy, that is to say, a high-productivity and technologically advanced economy if we are to compete with the rest of the world. The Taoiseach appointed me to Chair the group tasked with implementation of the recommendations of the Innovation task force and this met for the first time earlier this month.

We are focussed on opportunities for growth in a number of key sectors. For example, the Green Enterprise report estimated that 80,000 new jobs could be created in the coming years and there are other opportunities for growth in high-end manufacturing and services. Since my appointment as the Minister for Enterprise, Trade and Innovation, I have met with a range of stakeholder groups, including individual companies and business people both in Ireland and abroad. In my discussions, I have underlined that my priority is to ensure that the business environment is supportive of Irish enterprise, both manufacturing and services, to grow exports and to continue to encourage high value foreign investment.