I am pleased to have been invited again to present the Keynote Address at the IPD's Annual Conference.

The theme of your Conference this year, New Ideas for a New Age, is particularly appropriate as we look forward to the start of a new millennium.

In many respects, Ireland has come of age in the last 10 years. By any measure, the performance of the Irish economy in recent years has been remarkable:

• the size of our economy has doubled since 1987,
• we are now creating 1,000 jobs each week,
• our annual average inflation rate is just over 2%,
• employment growth over the last three years has run at seven times the EU average,
• our unemployment rate is now less than 7%, compared to 17% in 1987,
• for the first time since 1983, the number of people who are unemployed is below 200,000,
• and last year, we had a Current Budget surplus of £2 billion, after many years of deficits.

All of this has contributed to Ireland currently being ranked 11th. overall in the international league table of national competitiveness.

However, we cannot afford to be complacent. We have built a strong competitive base, but now we must ensure that we sustain our competitive advantage and make further progress in areas where Ireland is lagging behind best international practise.

For example, our businesses have a relatively low level of investment in research and development. The most recently available international statistics show that Ireland is ranked 10th out of 28 countries in terms of business expenditure on Research and Development taken as a percentage of GNP. This represents a vast improvement on 10 years ago, when Ireland was towards the bottom of the league table. But for a country which is at the centre of the technological revolution in Europe, we still show a surprising low commitment to research and development. Our output of scientific and engineering graduates is strong. However, the challenge still remains for industry to fully utilise them.

There are very practical reasons for doing so - companies which invest in R& D are likely to survive longer and generate more employment than companies which do not make this investment. Innovation will be a key determinant of competitive success in the future.

To maintain Ireland's current economic success, it is vital also that we anticipate and adjust to environmental changes that are likely to affect our competitive position.

The adoption of the Euro is a defining step in Ireland's economic development and will have profound implications for the competitiveness of the Irish economy and for Irish enterprise over the coming years. Greater price transparency and lower transaction costs will undoubtedly lead to increased competition in the Eurozone. This will be compounded by increased competition in the wider global economy, with the continued expansion of international trade and technological innovations such as e-commerce.

Around us we can see the emergence of a new knowledge and skills-based economy. We see changes taking place in industry itself. Manufacturing and assembly are declining in importance within the industry value chain. Research and product development are of growing importance at the pre-production phase, and marketing and customer service are growing in the post-production stage. The nature and content of the Services sector is changing rapidly and this sector has emerged as an increasing source of both international trade and local employment opportunities.

As industry becomes increasingly knowledge-based, the search for quality and efficiency has been the catalyst for new forms of work organisation. Traditional patterns of employment have changed, with full-time permanent jobs giving way to part-time employment, contract work and increased labour mobility. These change in the organisation of work require a more skilled labour-force and highly-skilled management of the change.

In the face of increased global competition and changes in the organisation of work, companies now require a labour-force which is flexible and adaptable. To remain competitive, a company must be able to adapt to the needs of its customers and to the demands of the market-place. More and more it is the workforce, in terms of their skills, competencies and ability to adapt and change, that will create competitive advantage.

It is important, therefore, that we invest in the continuous development and training of our workforce to sustain our strong economic performance and to compete in global markets.

Employees who possess a range of skills will have a greater chance of providing the flexibility and adaptability that industry requires. It is becoming increasingly evident that a specific skill, on its own, is no longer sufficient in many jobs. In the new workplace, specific skills must be underpinned by a range of general skills, including computer proficiency, literacy, numeracy, good communication skills and language skills. The ability to work in teams and to take on responsibility are also required.

For its part, the Government is committed to ensuring that there is an adequate skills supply to meet the needs at all levels of the economy. Through the Department of Education, FAS, and other State agencies, the Government is equipping our workforce with the training and education which industry requires.

The Business/Education Partnership which we established in 1997 ensures that there is close co-ordination between enterprise and the education sector in identifying the emerging skill needs of the economy. Under this Partnership, the Expert Group on Future Skills Needs examined, initially, the skills requirements in the software and electronics sectors and presented its report on these sectors last year.

My Department is responding to the Expert Group's report in a number of ways:

• FAS is providing extra training places for the electronics and software sectors. An additional £3.2 million has been allocated to FAS in my Department's 1999 Estimate to train an extra 730 people for these sectors.
• Enterprise Ireland has established a programme aimed at attracting Irish people living abroad back to Ireland to work in the Information Technology sector.
• FORFAS has strengthened its National Skills Awareness Campaign, which is aimed at encouraging Second Level students to pursue careers in Information Technology.

My colleague, Micheál Martin, the Minister for Education and Science, has responded to the recommendations in the First Report of the Expert Group by announcing recently that 5,400 new places will be provided over the next four years in Third Level education to ensure an adequate supply of skills in the Information Technology and electronics sectors. The Minister also launched a £250 million Education, Technology and Investment Fund in 1997, to meet the short, medium and long term needs of technology and high-growth oriented firms.

Industry has a role to play, too, in meeting the skills requirements of the economy. Employers are the best judges of their own skills needs. However, while many organisations recognise the need to invest in their human resources, many others - and particularly Small and Medium size Enterprises - do not yet seem to appreciate the contribution which training can make to enhancing their productivity or effectiveness.

To address this, a Training Awareness Programme is being jointly run by ICTU and IBEC, and is receiving European Social Fund assistance from my Department under the ADAPT Initiative. This programme is highlighting the benefits which accrue to firms from investment in human resources development. It is also demonstrates the value of a partnership approach between management and workers in developing and maintaining an effective human resource development strategy.

I encourage all of you to continue to invest in human resources development in your own companies to ensure that we have a sound skills base to cope with the challenges that lie ahead.

Indeed, for each firm, the aim must be to become a "learning organisation" that continuously develops its human resources. The Learning Organisation is a total human resource development model in which all employees take part in daily learning experiences through, for example, problem-solving teams and autonomously operating project groups. The Learning Organisation becomes more competitive and effective through its capacity to evolve, adapt and innovate.

I am happy to announce that I will shortly be launching a new Training Networks Programme, aimed at further encouraging Irish business to identify and address its training needs.

This programme, which is enterprise-led, responds to calls in Partnership 2000 for the development of new approaches to enterprise training, with business taking a lead. I am happy to say that there is a large degree of consensus among the social partners about the importance of continuing training at all levels of the workforce and IBEC and ICTU will work in close co-operation, together with other business representatives, on the Networks Programme.

The programme will mobilise groups of companies to develop strategies to address common training needs. The focus on networks derives from the fact that there are significant potential payoffs in mobilising groups of companies to share knowledge and to pool resources to tackle common training needs. There is also a huge untapped reservoir of exemplars in industry with experience which can be shared with other companies.

Moreover, by pooling resources and by group-purchasing solutions to common training problems, the costs of accessing training can be reduced for individual network members.

A provision of £3 million has been made in my Department's Estimate this year for the Training Networks Programme. The Programme will operate on a three-year pilot basis and I will be providing further support for the programme over the coming years.

Final procedural arrangements are being put in place at the moment and the Networks Programme will be launched next month.

In the midst of our economic success, it is important that we do not forget those at the margins of the labour market, or become complacent about the plight of those who remain unemployed. The National Employment Action Plan sets out the Government's policies to promote employment, reduce unemployment and assist people at the margins to be reintegrated into the labour market.

The initial focus of this strategy has been on interacting with young unemployed people before they reach six months on the Live Register and offering them education, training, work placement or other employability measures. Within the last six months, over 6,000 young people were referred to FAS under the Employment Action Plan, and 56% of these have left the Live Register. We know that nearly 70% have taken up a job, or are on an education or training course.

In light of this success, we are expanding the Plan to support older, long-term unemployed people, to help their re-integration into the labour-market.

I have also introduced a number of measures this year specifically aimed at providing long-term unemployed people and Lone Parents with pathways to work. These measures include over 10,000 extra places on training and active labour market programmes operated by FAS and the introduction of a £25 per week bonus for long-term unemployed people on FAS training courses.

In the past, it has been difficult for long-term unemployed people to progress to employment, but I am confident that the measures my Department is taking will enable them to access the jobs which are now available. I hope that employers will recognise that these people have a valuable contribution to make to the economy and again, with training and development, they can help firms to maintain competitiveness.

I also firmly believe that people with disabilities have a contribution to make to the economy. In a tightening labour market, employers should be aware that there are many disabled people who are available to meet the labour shortages in many sectors. I am not advocating that companies employ people with disabilities out of tokenism. On the contrary, they should consider employing disabled people for the contribution they can make to the firm. As is the case with any able-bodied person, it is a matter of matching the person's skills to the right job. Grants are available from the National Rehabilitation Board to employers who may need to make adaptations to the workplace to accommodate people with disabilities.

Later this year, responsibility for certain aspects of training and employment of people with disabilities will transfer to my Department from the Department of Health & Children.

In advance of the formal transfer of responsibilities, I have asked my Department's agencies to develop initiatives which will enhance employment opportunities for disabled people in the open labour market.

Last year, I asked IDA Ireland to produce proposals to encourage foreign companies located in Ireland to employ people with disabilities. As a result of the IDA's consultations with a number of its client companies, 11 Multi-Nationals agreed to participate in a pilot programme to encourage the employment of disabled people. The programme began in July 1998 and will be completed in December 1999.

As part of its objectives, the programme will produce policy and guidelines on the recruitment of people with disabilities and will develop a work-placement programme for people with disabilities in conjunction with the participating companies. I know that representatives from some of those companies are here today, and I want to commend them on their support for this programme.

As a result of the experiences which will be gained during this pilot project, I hope that the programme can be substantially opened up to a much wider group of companies throughout the country. My Department's other agencies, such as Enterprise Ireland and the County Enterprise Boards, will have a role to play in widening the programme.

FÁS, too, have set up a pilot initiative in three of their regions for disabled people who want to move into paid employment. The initiative is being piloted in the FÁS regions of Dublin North, Dublin South & Wicklow and South-West. A co-ordinator has been appointed in each region to provide one-to-one support to help people with disabilities to integrate into mainstream training or employment programmes.

The continuing growth and development of each and every one of us is an essential component to a healthy and dynamic society and it is important that each of us is facilitated to maximise our potential to contribute to the economy.

Let me finish by reiterating that investment in the development of human resources is increasingly important - indeed critical - to sustaining competitive advantage for both firms and for the State in today's knowledge-driven global economy.

While the Government will lead the way in terms of macro-economic policy, you, the representatives of industry have a key part to play in ensuring our continued economic success, through your commitment to human resources development and in strategically managing the way in which organisational change is brought about.