Bernard Durkan (Kildare North, Fine Gael)
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Question 86: To ask the Minister for Jobs, Enterprise and Innovation the extent to which he has managed to address issues affecting the competitiveness of the manufacturing and service sectors with particular reference to the need for the retention and creation of sustainable jobs; and if he will make a statement on the matter. [29120/11]

Richard Bruton (Dublin North Central, Fine Gael)
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The National Competitiveness Council (NCC) reports to me on costs and other competitiveness issues in all sectors of the Irish economy through its suite of reports, including the "Costs of Doing Business in Ireland" report. The latest report on Costs of Doing Business in Ireland, published in June 2011, found that the Irish economy continued to show an improvement in its competitiveness in 2010, building on a gradual restoration of performance since 2008.

Costs of doing business in Ireland have reduced in relation to labour, property, utilities and business services. However, the NCC points out that some of the cost reductions achieved to date are cyclical in nature rather than structural, and more needs to be done to ensure that costs do not rise again as the economy recovers. The Costs of Doing Business report made a number of recommendations to embed competitiveness in the economy in a structural way. I have brought these recommendations to the attention of my Ministerial colleagues in Government and I will continue to work with them to identify further actions that can be taken to improve our competitiveness, reduce costs to business across all sectors and remove obstacles to employment creation.

The manufacturing and internationally-traded services sectors in Ireland have begun to recover in the last two years and exports have performed strongly. They have been less affected by Ireland's difficulties in Banking and Public Finances than other sectors and have been in a position to avail of improvements in competitiveness, such as reductions in Ireland pay costs, energy costs and rental costs.

There are many opportunities in technology and innovation which are giving Ireland a competitive edge. We have established strong clusters in innovative sectors such as Medical Devices, ICT and the Pharmaceutical and Financial sectors, which continue to perform well. Ireland is well placed to exploit opportunities in new sectors such as Cloud Computing and Digital Gaming, Life Sciences and Clean-tech. Ireland's services sector continues to grow and in 2010 accounted for 45.3 per cent of total exports and we have well recognised strengths in many areas such as ICT and Business Services.

Manufacturing is an equally important engine of our economy and is the bedrock on which the growth in Ireland's economy was founded. While manufacturing is also in transition, it is an integral component of our economy and it will continue to remain so. Higher technological investment and higher value products will be the hallmark of future manufacturing operations in Ireland. The sector will be characterised by increased international competition and enhanced output volumes due to investments in technology and automation. These operations will be knowledge, capital and skills intensive, characterised by a participative innovative culture where management and staff continuously collaborate to drive innovation, productivity, agility, learning and adaptability.

The Jobs Initiative, which the Government introduced last May, will also support the maintenance of existing jobs, as well as facilitating the creation of new ones. The Initiative included a range of measures which will be taken across all Government Departments to stimulate the economy and help get people back to work.

With regard to my own Department, the Jobs Initiative included commitments to:

· develop a temporary Partial Credit Guarantee scheme to improve access to credit for business;

· introduce a Microfinance Fund for small business start-ups;

· extend to the wider public sector - excluding commercial State bodies - the requirement to pay suppliers within 15 days of receipt of a valid invoice;

· amend the treatment of R&D expenditure in the accounts of companies;

· improve access by SMEs to public procurement opportunities;

· introduce a scheme to incentivise people to attract new jobs to Ireland.

I also undertook to improve competitiveness across the economy by reducing costs and administrative burdens on business and by reforming the statutory wage setting mechanisms.

All of these measures will create a more competitive environment for business, including in the manufacturing and services sectors, and will help to maintain jobs and generate new ones. I will continue to work with my Government colleagues to identify actions that can be taken to reduce costs in other areas to improve the competitiveness of the economy and support the creation of jobs. I have also begun the process of preparing a comprehensive Jobs Strategy which will provide an action plan to support the creation of employment in the economy. I expect the Strategy to be published in January.