IBEC Kerry’s Iinaugural President’s Dinner

At the Great Southern Hotel, Killarney, Co. Kerry

I would like to begin by thanking you for inviting me here this evening as your guest of honour, and by congratulating John Coffey on his inauguration as Regional President last June. John, I wish you every success in your term of office.

At the outset I would like to pay tribute to the contribution that IBEC makes to economic and social progress in Ireland, in particular through its central involvement in the Partnership process. There is no doubt but that IBEC has been instrumental in the great success we have had in Ireland in creating the investment-friendly business environment that has produced so many jobs and increased wealth for the people of Ireland. I believe that the Kerry Confederation has a regional membership amounting to some 100 companies in Kerry, who employ upwards of 15,000 people in the region. This is a very significant contribution to the local and regional economy and makes IBEC Kerry a very significant stakeholder in the future success of the region. I understand that your membership includes small, medium and large enterprises from the manufacturing and services sectors, both national and multinational.

A lot has happened and continues to happen in Kerry in terms of economic development and job creation, and the State agencies with responsibility in this area have contributed in conjunction with IBEC, and other local and community interest groups, to make Kerry a more attractive location in which to do business. The Government and the Industrial Development agencies are committed to developing investment opportunities in the Kerry region.

IDA Ireland, through its network of overseas offices and project divisions, continues to actively promote the Kerry region to potential investors in order to attract foreign direct investment. Every effort is being made to secure new projects for the area. The strategy for Kerry is to achieve developments in the International Services and Information and Communications Technology sectors, focussing on Tralee and Killarney, which are designated as linked hubs in the National Spatial Strategy.

Enterprise Ireland envisages South Kerry as a particularly attractive location for companies in the internationally-traded services sector. Enterprise Ireland strategy in this regard is to work with existing companies to maximise their growth ( e.g. Fexco) and to promote the region to indigenous companies seeking to expand or relocate (e.g. C NG, Kenmare)

The Internationally Traded Services sector continued to perform well in South Kerry in 2003 albeit with a smaller rise in employment than that enjoyed over the previous five years. Employment in the sector increased a massive 150%, from 387 in 1998 to 960 in 2003.

The success of companies such as Fexco (financial services) in Killorglin and Cahirciveen, and CNG Hotels (hotel reservations services) in Kenmare is evidence that South Kerry is an attractive location for indigenous companies in appropriate sectors of activity.

Enterprise Ireland continues to contribute to the development of the necessary infrastructure to support new business development and expansion, through supports for suitable business accommodation (e.g. K illarney Technology Innovation); support for spin off businesses from research by funding special incubation units in the third level colleges (at the Institute of Technology in Tralee) and through working with local communities in the development of Community Enterprise Centres.

As part of its role in regional development, Enterprise Ireland works closely with other agencies in the South Kerry area, in particular Kerry Enterprise Board, Údarás na Gaeltachta, and with the Institute of Technology in Tralee in promoting greater links between industry and the College in the County and in the Region in order to encourage the greater update of technology by Irish companies.

In addition to targeting potential new projects, the Development agencies continue to work with the existing base of companies in the region with a view to supporting such companies with potential expansions and diversification of activities. In terms of Foreign Direct Investment projects, IDA Ireland has been successful in attracting some major clients to Kerry including Beru Manufacturing and Amann Industries in Tralee and Fujisawa Pharmaceuticals in Killorglin. All of these companies are significant employers in the County.

This year two notable new projects were announced for Killarney. Firstly, Dollinger (Ireland) Limited in Killarney, is to be established as the global centre for production of its range of compressed air products. Dollinger Ireland will have global responsibility for the development of this particular product range. This €1.1 million investment is expected to create more than 70 new jobs over the next four years.

Secondly, Liebherr Container Cranes Limited, which has been in Killarney for 46 years is to recruit six highly skilled Research and Development personnel for a new specialised team. This team which will be of strategic importance to the parent company. It will enhance the facility’s role as the control centre for Liebherr’s container crane products. It will develop products from concept through to product launch and any Intellectual Property developed will be the property of the Irish-based company.

In order to further the objective of increasing inward investment to South Kerry, site development work was undertaken on the Business and Technology Park at Tiernaboul, Killarney. This work, which has cost in the region of €1 million, has been completed.

In addition, to the efforts of the State agencies, I would like to acknowledge the input by a local group of business people under the Business Expansion Scheme whereby a new building of 14,716 square feet on the IDA Business & Technology Park was completed. These investments will put South Kerry in a position to compete more strongly for inward investment in the ICT, Software, and International Services sectors.

The Kerry Technology Park, which was officially opened by my colleague Minister John O’Donoghue in November 2001 currently accommodates sixteen technology companies, employing approximately 170 people in total. Central to the success of Kerry Technology Park, is a good supply of highly skilled labour, flexible accommodation options, close linkages with local education and research centres, and the presence of a strong enterprise culture. Its advanced telecommunications infrastructure and on-site connections to national and international markets, gives clients immediate access to the global marketplace.

The Institute of Technology in Tralee (ITT) also plays a significant role in developing enterprise in the region, and courses such as the business studies degree in e-business have been developed in conjunction with firms in the Park, meaning graduates take their work placements in Park companies while lecturers serve as advisers and consultants to firms in the Park’s Innovation Centre.

Of course, it has to be recognised that there have been a number of job losses in the County over the last two years in particular. I do not underestimate the importance of employment and the effect of job losses on individuals and on the economic and social fabric of the region. We all have a responsibility to continue to make every effort possible to bring new employment that will offer those made redundant hope for a better future. I am encouraged by the latest figures published by the Central Statistics Office in their Quarterly National Household Survey which show an unemployment rate of 4.2% in the South West. This compares favourably with last year which showed a figure of 4.4% for the corresponding period. This demonstrates that we are controlling unemployment but still more needs to be done in certain local areas to deliver sustainable jobs for those who live there.

While the State agencies and other organisations such as IBEC Kerry have worked diligently to enhance the attractions for Kerry for business, there is of course, a broader national picture. On a national policy level, delegates will be aware that the Government established the Enterprise Strategy Group to review Enterprise Policy and Strategy for Ireland.

The recent Report of the Enterprise Strategy Group recognises that we are at a turning point in terms of the competitive impact of global competition for markets and investments. The importance of the ESG’s recommendations is that they aim to provide the economy with the capacity to quickly act against emerging threats to business and to exploit the new opportunities being presented by technological developments and business internationalisation.

Its recommendations also come at a potential turning point in the trend of our economic development. We are currently enjoying the benefits of sustained economic expansion but our past success, while providing a platform for future growth do not guarantee that growth. Fundamental changes are taking place in the international business environment. These present exciting new opportunities and some formidable competitive challenges, but never easy or simple choices – either for business or Government.

The Report acknowledges the tremendous economic success this country has enjoyed over the past decade. That success has been built on the back of a strong manufacturing sector underpinned by significant overseas investment. But critically, our weaknesses and failings in terms of innovation, R&D, depth of market knowledge demonstrates that we cannot hope to succeed in the future if we become complacent about the past.

The key message is that we must adapt and develop our strengths if we are to succeed in tomorrow's knowledge economy. Our capacity to sustain growth, at least to the levels we have been accustomed to, cannot rely on the same policy prescriptions that propelled our economic and social modernisation in recent times. Our competitive characteristics have changed and the world has changed. The Enterprise Strategy Group’s report sets a clear agenda to help manage this change – an agenda based on a consistent and inexorable move that brings knowledge and innovation into everything we make, do and sell.

Every economic region is trying to capitalise on new technologies and new markets. If we are to succeed we have to do the same but must be more creative and flexible than our competitors. Across the world, regulatory shackles and controls that held back trade and investment are being loosened. Economies, companies and employees that have only dreamed of our prosperity are hungry to compete against us and capture our markets. They will do whatever it takes to grow faster, compete harder and innovate to capture more markets.

At the level of the enterprise, we have to build creative teams that will stretch the boundaries of the possible to develop new products and services to meet the changing demand of modern society. Equally, policymakers must be agile and responsive to new global business imperatives. If we don’t make sure the right support and environment are in place for business to do profitable business from Ireland, our competitors will.

In this regard, the Enterprise Strategy Group identified five key areas in which it believes Ireland can establish sustainable competitive advantage:-

• develop an expertise in international markets so that business can be more responsive to the needs of customers;

• build a world-class research and innovation capability to support the development of high-quality, high value products and services;

• renew Ireland's historic commitment to education and training to provide the skills base industry will need;

• maintain a competitive tax environment to drive economic growth;

• provide capable and flexible Government that can quickly identify policies required by enterprise.

My predecessor set up a High-Level Committee to take forward the ESG recommendations as appropriate. This Committee has considered the Report over the past couple of months and I expect to receive its final Report shortly which I will then bring to my Cabinet colleagues. I can assure you that this Government will take whatever action is needed in the area of enterprise policy to deliver the economic growth and environment for business that is needed to maintain the quality of life our people have come accustomed to.

In conclusion, I would like to reiterate my good wishes to John Coffey for a successful Presidency, and wish you all a most enjoyable evening.

ENDS/ETE1276