James Geoghegan (Dublin Bay South, Fine Gael)
Link to this: Individually | In context

373. To ask the Minister for Enterprise, Trade and Employment if his attention has been drawn to Ireland's reduced competitiveness ranking (details supplied); and if he will make a statement on the matter. [25209/25]

Peter Burke (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context

Ireland is regarded as an internationally competitive economy. In recognition of this, the IMD World Competitiveness Rankings for 2024 placed Ireland in 4th position globally. The IMD ranking is, however, quite distinct from the Global Innovation Index (GII). Specifically, the IMD index is a broad assessment of competitiveness whereas the GII focuses solely on innovation.

Recent analysis by the National Competitiveness and Productivity Council (NCPC) confirms the robustness of the assessment by the IMD. This analysis explores how Ireland’s competitiveness profile changes when key metrics are re-calibrated to better reflect the scale of the domestic economy. Specifically, the NCPC examined how Ireland’s IMD ranking is affected when indicators are rescaled using Modified Gross National Income (GNI*) in place of GDP. The findings show that Ireland’s competitiveness performance remains strong with this adjustment. In fact, it rises by one position in the ranking, with improvements in three of the four pillars.

Similarly, the NCPC last year reviewed Ireland’s ranking in the Global Innovation Index (GII) for 2023, using a comparable approach focusing on the difference between GDP and GNI*. That analysis found that, once relevant variables were rescaled in terms of GNI*, Ireland’s performance in the GII improved by 10 places, rising from 22nd to 12th overall.

As has been well documented, the scale of multinational activity in Ireland can tend to distort our GDP statistics, and, as recent analysis by the NCPC shows, this has tended to understate our relative competitiveness performance in recent years. This work by the NCPC facilitates a more meaningful benchmarking of Ireland’s competitiveness and makes a very welcome contribution to the work of Government in this space.

However, it is fundamental that we do not become complacent, and there remains work to do in many areas. Despite our strong international performance, we are also aware that there are challenges, and it is important that we do not take our current strengths for granted. This is reflected in the decision taken by Cabinet to expedite delivery of the Action Plan for Competitiveness and Productivity, which will play a key role in addressing these challenges and safeguarding our competitiveness performance into the future.

A draft of the Action Plan will be considered by Ministers at a Competitiveness Summit this July and the plan will be published as soon as possible thereafter. This plan will cover industrial policy, reducing the cost and regulatory burden on business, investing in infrastructure, digital regulation and reform, energy reform, international trade and research and development, and innovation.

Over the coming weeks, the NCPC will also finalise its Ireland’s Competitiveness Challenge 2025 report. This work will feed into the development of the Action Plan. The Action Plan will be evidence based, and will be underpinned by consultations by my Department with other Government Departments and stakeholders, as well as by research and analysis. These consultations are already underway.

Given the heightened level of international uncertainty, most if not all of which is outside of our control, the overarching objective of the Action Plan will be to focus on matters within our control by way of policy changes which can make the Irish economy more competitive and resilient to economic shocks.