Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

22. To ask the Minister for Jobs, Enterprise and Innovation the degree to which his Department continues to monitor the manufacturing and service sectors with a view to identifying any weaknesses in competitiveness which might present a threat to employment in the future; if any particular early warning strategy has been devised in this regard with particular reference to the need for the utilisation of modern technological and scientific advances as a means of achieving increased production, improved efficiency, retention of employment and general economic benefit; and if he will make a statement on the matter. [24386/13]

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Following an initiative which I undertook last year, in the context of the Action Plan for Jobs, where I asked Forfás to undertake a detailed strategy for the Manufacturing Strategy in Ireland up to 2020, I was delighted to have had the opportunity last month to launch that finalised strategy, which sets out a range of steps necessary to consolidate and develop that sector.

This report sets out the actions needed to address cost competitiveness and access to finance - building on the steps already taken by this Government to improve our international competitiveness. Key actions are proposed across a range of areas, including; access to new funding, management training and support, costs reduction, technology adoption and the implementation of a National Step Change initiative.

In terms of addressing our Competitiveness issues, Ireland's cost competitiveness can be improved in two ways: through reductions in costs nationally; and/or at firm level through improvements in productivity. Encouragingly, a key finding in this Strategy has been that productivity in manufacturing has been increasing over recent years - annual average growth rates in per hour labour productivity across manufacturing sectors amounted to 5.6 per cent over the period 2007 to 2010 - enhancing the competitiveness of Ireland's manufacturing firms on international markets.

It is, of course, the case that many of the Competitiveness issues faced by the Manufacturing Sector are similar to those facing businesses generally. In a separate initiative last year, I requested Forfás to undertake research into a number of factors impacting on Ireland's international competitiveness, to benchmark these factors and to develop proposals to systematically reduce excessive key business costs or delays.

That wider Forfás research indicates that in the period between January 2000 and April 2008, Ireland suffered a 22.5% loss in competitiveness. However, in the period from April 2008 to July 2012, Irish cost competitiveness improved by 19% as measured by the Harmonised Index of Consumer Prices. Prices have now fallen back to levels last seen in 2002. The research benchmarks Ireland's performance against a number of our key trading partners, as well as the OECD and Euro area averages. Positive trends are emerging in relation to some key cost factors, including Labour costs, where our labour cost competitiveness continues to improve; Construction and new rental costs, which have fallen significantly since the collapse of the property bubble; and the cost of most business services, which have fallen to, or below, 2006 levels.

I have asked the enterprise agencies and others to drive the delivery of a National Step Change Initiative , aimed at enabling companies to take one step up to drive enhanced productivity and competitiveness, to internationalise, to deepen engagement in innovation and to collaborate to compete. In addition, IDA will, of course, continue to attract new investments in manufacturing, including 'new' and emerging sub-sectors by tailoring their marketing proposition specifically to a firm's needs, and based on Ireland's reputation for high standards in manufacturing, our skills base and R & D strengths.

Enterprise Ireland will work closely with companies with potential to grow through expansion of business development programmes including management development and board strengthening, technology development and a range of productivity improvement programmes: The agencies currently provide supports to manufacturing firms to assist in transformational change and LEAN initiatives on enhancing productivity, leadership and management development and in stimulating innovation. Enterprise Ireland are initiating a Development Capital Fund Scheme which will help to support established manufacturing firms as they seek to automate and to prepare for expansion.

In terms of the Services sector, services account for two thirds of total employment. While the majority of service firms are not supported by the State, about 125,000 persons are employed in Agency supported firms, an increase of 4.6% on 2010, with growth particularly strong in business services, ICT and financial services. The Action Plan for Jobs outlines a range of sectoral initiatives to facilitate new and established companies grow in this space with particular focus on International Financial Services, Business Process Outsourcing/Shared Services, Education Services, Retail and Wholesale, Tourism, Construction Services and ICT Services.