Tanaiste’s Address to the Japan Ireland Economic Association (JIEA)Nippon Press Club,Tokyo on Monday 12 March, 2001

I am delighted to have this opportunity to speak to you here this evening. As you may be aware, this is the first ever Trade Mission to Japan, and I am particularly pleased that many of the Irish companies that are accompanying me are also here this evening. I am confident that it will be a successful Mission, both in terms of business achieved, and in the formation of lasting partnerships between Irish and Japanese companies.

Total trade and investment between Ireland and Japan in 2000 is estimated at £4.5 billion, with Irish exports increasing by 63% in the same period. Japan now accounts for 9.3% of our total exports, against 8.4% in the same period last year. In fact, the large and diverse nature of the delegation of Irish business people who have accompanied me on my Trade Mission, is testament to the tremendous potential that Irish companies see in Japan. Many opportunities have been provided by deregulation of the communications, aerospace, and financial sectors, and increased investment in IT infrastructure, healthcare, the environment and English language training.

Developing partnerships and global linkages has been a key element in Irelands success as a trading nation. Over the last two decades over one thousand large international corporations have located in Ireland and created opportunities for our entrepreneurs and indigenous SME’s. Our companies, through innovation and technology and design, are now the fastest growing contributors to Irish trade.

As many of you will no doubt be aware, Ireland is a world leader in the software sector, with much to offer our trading partners. During 2000, the number of Irish companies with a presence in Japan doubled in 2000, with the bulk of these Irish companies coming from the IT, telecommunications, and software sectors. A recent OECD report, indicated that Ireland had now overtaken the US to become the worlds number one exporter of software products, with annual exports of US$4 billion. More than 60% of all PC package software sold in Europe is produced in Ireland, with Irish software companies now employing over 20,000 graduates, a figure that is expected to double over the next 4 years.

Both Ireland and Japan have developed strong IT industries and we are both positioning our economies as significant players in the evolution of the Information Society. This is a market sector where small, innovative companies with leading edge products and services can thrive. It is also a sector in which strategic partnership between small, medium and large companies, locally and internationally, is recognised as the most effective way to ensure competitive advantage.

The economic and export growth in both our countries over the past decade, particularly in information technologies, has positioned us as natural trading nations and global players. Both Ireland and Japan have emerged as world leaders in IT and software services. Our presence here, allows us to see the remarkable performance of your software industry, and to learn more about your exciting vision for the future.

At Government level, we are doing everything we can to assist Irish companies exploit the opportunities that e-commerce offers. We have tackled this challenge on three broad fronts: legal, infrastructural, and new business models.

Ireland was amongst the first countries in the world to introduce comprehensive legislation to cover the conduct of e-business. Under the Electronic Commerce Act, signed into Irish Law in July 2000, Ireland has established legal recognition of e-business transactions in most areas of business, private law and public administration, by giving the same status to electronic signatures, electronic originals, electronic writing, and electronic contracts, as paper based counterparts. The Act also addresses the conclusion of contracts electronically. Crucially, it underpins and gives security to the new ways in which business is transacted over the Internet.

On the infrastructure side, over the past 18 months, the Government has invested over £80 million in part-financing the rollout of broadband infrastructure, the backbone of e-business, to the various regions of Ireland. A further £100 million will be invested in the coming years, under our National Development Plan, 2000-2006. In addition, the Government’s public-private partnership with Global Crossing and the arrival in Ireland of 360 Networks, ensures that Ireland’s broadband infrastructural links to the world, are second to none.

The Government has also addressed the new business models that Irish firms may need to adopt to compete in the new global electronic market. Last October, my colleague, Ms. Mary O’Rourke, Minister for Public Enterprise, published the results of the E-Commerce Corporate Infrastructure Case Studies Programme, which outlines the experiences of 25 Irish businesses who were willing to create innovative new business models and products, using the latest Internet technologies. The results of these case studies will, I believe, encourage other Irish businesses to embrace the opportunities offered by e-commerce.

The substantial growth in Ireland in the IT, Software and Telecommunications industries, would not likely have taken place without the appropriate economic factors being in place. The Government has worked hard to improve Irelands economic situation. The pillars supporting Ireland’s impressive economic performance have been: a partnership approach to managing the economy, that takes account of the views of Government, Industry, Employers and Unions; a tax regime which supports enterprise and employment; the promotion of a stable macro economic environment; a practical approach to the promotion of Ireland as a suitable business environment and business partner; and perhaps most importantly, the provision of a highly educated labour force.

A key catalyst for change and stability in Ireland, both in social and economic terms, has been the social partnership process. The ‘Programme for Prosperity and Fairness’, the latest in a series of agreements between the Government and the social partners, will enable Ireland to meet the challenges of the future.

Firstly, it will ensure that everybody in Ireland can feel the benefit of Social Parnership; secondly, it will bring about real and tangible improvements in living standards, not only in terms of income, but also in terms of issues affecting the quality of peoples lives, such as housing and transport; and finally, it will master the challenges posed by the information revolution, globalisation, and EU enlargement, which dominate our changing world.

The Programme for Prosperity and Fairness, is anchored on the vital importance of international competitiveness for Ireland’s continuing economic and social progress. It recognises the current domestic and international issues facing Ireland’s competitive position

Participation in the Single Market, has been a key part of Ireland’s economic success. On the one hand, it has added to the attraction of Ireland as a destination for investment. It has also assisted our indigenous companies to develop: not only have they gained access to a large market, but they have also gained opportunities for co-operation with partner companies around Europe, to partner technologies and develop marketing partnerships.

The launch next January of the Euro as a working, tangible currency, will add further to this advantage. The removal of some of the last barriers to trade and partnerships - currency costs and risks - and the improvements in market transparency which the Euro will involve, present us with new opportunities, and new risks. Opportunities in the greater ease of access to markets, and improved possibilities for competitive sourcing of inputs. Risks, in that all other countries in Europe are thinking the same way! However, I am confident that over the past decade, we have taken appropriate steps to improve our competitiveness, which will permit us to continue to compete above other EU member states.

This Programme is a carefully targeted and managed programme of investment to protect and enhance our competitiveness. The total investment spend for this Programme, is over £40 billion, of which over £22 billion is on infrastructure: roads, public transport, housing, telecommunications, water and waste management.

The National Development Programme relates solely to public funded expenditure. However, there are also huge investment requirements in other infrastructure, such as electricity transmission and generation, private sector housing, and gas pipelines to name but a few.

We face an enormous challenge in delivering on the National Development Programme, not least because our construction sector needs to expand rapidly. To this end, we are trying to attract foreign firms to tender for contracts, and are actively working to make people in other countries aware of the opportunities that exist. We are also working to encourage foreign firms to form joint ventures with Irish companies who have experience of the local market. I am pleased to say that these ventures are already happening, with a growing number of companies from Europe and elsewhere now bidding for, and securing, contracts. I am delighted that late last year, a Japanese company, Nishimatsu, in partnership with Mowlem, a UK construction company, was awarded the contract to construct the Dublin Port Tunnel.

We are also committed to our long-term strategy for positioning Ireland at the forefront of the Information Age. Maintaining our national competitiveness will be dependant to a very large degree, on moving the economy onto the Internet. Business is becoming more attuned to the importance of electronic commerce for its future, and the Irish public is enthusiastically endorsing the developments.

Earlier this morning, 15 of the IT companies which are participating in the trade mission I am leading, held a seminar for the leading Japanese IT companies, many of whom I understand are here this evening, with a view to building long-term relationships and increasing trade and investment. These companies are deeply committed to the Japanese market.

At Government level, we are also deeply committed to supporting Irish companies that are seeking to build their relationships here. It is for this reason that I am going to officially open a new incubator unit tomorrow in Shibuya, which will be run by Enterprise Ireland. This facility will permit Irish companies to initially establish their operations here, without facing all of the difficulties and expenses normally associated with searching for a suitable start-up location.

In conclusion may I say that, given the active interest by Irish companies in doing business with Japan, as evidenced most visibly by the number of companies participating in this Trade Mission, I am confident that there is substantial scope for further expanding the economic partnerships that already exist between Ireland and Japan. I also firmly believe that our presence here in Japan will assist in strengthening and deepening the wider bonds of friendship and understanding between our two nations.