Speech by Minister Martin at the Annual Dinner of IBEC- CBI Joint Business Council

Speech by Minister for Enterprise, Trade & Employment toAnnual Dinner of IBEC- CBI Joint Business Council in Berkeley Court Hotel on Wednesday 4^th October, 2005

I am delighted to have this opportunity to join you this evening. The Joint Business Council has, over the years, provided an excellent forum for Government to meet with senior business people from North and South. In view of the very significant developments on decommissioning in Northern Ireland last week, it is particularly timely that we should this evening consider North South Cooperation and the potential for an all-island approach to business and economic development.

In many respects IBEC and CBI have been leaders in this agenda. As early as 1991 you established the IBEC/CBI Joint Business Council to ‘sustain and develop economic cooperation on the island of Ireland and advance international competitiveness’. More recently, the Good Friday Agreement provided for the establishment of North/South Bodies and for North/South cooperation across a range of sectors. Despite suspension of the political institutions, the two Governments were able to put in place arrangements to allow the North/South Bodies to continue to carry out their important public functions.

As Minister for Enterprise, Trade and Employment, my responsibilities include InterTradeIreland - the all-island trade and business development body. It is clear from the respective strategies of the Joint Business Council, as summarised in your recent 20 Key Actions document, and of InterTradeIreland in their recently published Corporate Plan for 2005-2007, that there is much common ground between the two organisations in areas which can impact the crucial need to improve this island’s international competitiveness.

The Joint Business Council’s role in the development of North-South economic and business links over many years is widely acknowledged. The establishment of InterTradeIreland introduced another resource into this arena and I have to say that it is to the credit of both organisations that you have agreed that elements of your work programmes at both policy and operational levels can be made mutually reinforcing.

The Joint Business Council and InterTradeIreland collaborate in a number of ways and on a number of levels. There is consultation, discussion and agreement during the phase of defining the organisations’ respective strategies at Chief Executive level. This relationship is further reinforced by the roles played by both organisations in initiatives such as the North-South Roundtable Group. There is programme-level consultation between the senior management teams of the two organisations to ensure that there is a sharp focus in areas where a joint approach can be beneficial. There is also collaboration at project level to use the strengths, skills and reach of both organisations to best effect. Recent work has included an important study into supply chain logistics and transportation and complementary projects related to information technology and telecommunications.

The continued development of your strategic relationship is, I suggest, vital to both organisations. The outworking of the benefits of that relationship can create value across the island. Increased competitiveness is what we all have to strive for. We all see the threats posed by the economies of Eastern Europe and China. The fact is North/South collaboration is still a relatively untapped source of competitive advantage for companies across this island and is therefore an opportunity which must be grasped and exploited to the full. I am confident that the work of the Joint Business Council and InterTradeIreland will identify such opportunities and drive to realise their benefits.

I particularly welcome the Council’s 20 Key Action Points for 2005 and 2006. These are excellent ideas on how we can improve trade and business development, increase skills and labour mobility and enhance the competitiveness of the island economy. Significant progress has already been made in a number of areas identified in your action plan. For example, in the key area of improving the business environment to enable companies to be competitive, both at home and internationally, one of the main priorities of the Council is to see an enhanced infrastructure across the island of Ireland in a range of areas including transport, energy and telecommunications.

With regard to co-operation on energy issues, I welcome the progress made by my colleague Noel Dempsey, Minister for Communications, Marine and Natural Resources and Northern Ireland Minister for Enterprise, Trade and Investment, Angela Smith MP. A key outcome of this co-operation was the joint publication of the All-island Energy Market Development Framework in November 2004. The Framework, which was produced in consultation with the two regulatory authorities and involved extensive consultation with industry and other stakeholders, sets out the commitment of both Governments to achieving a single energy market. A joint approach is the best way to ensure that communities and business have access to safe, secure and sustainable energy supplies, obtained through competitive markets. The creation of a mature all-island market will bring benefits to the island as a whole, including a larger, single market with competitive energy prices, greater security of supply, a more attractive investment location and a robust integrated infrastructure. The main priority within the Framework document is the creation of a single wholesale electricity market by July 2007. The energy regulators have already finalised the high-level principles to govern the market and work is now ongoing to put in place the detailed rules and arrangements necessary to have a fully operational market in place by July 2007.

The development framework published in November 2004 also sets out policy for an all-island energy market in relation to gas. While the Regulators and Departments have been concentrating their resources on the main priority – implementation of the Single Electricity Market – they have been meeting to progress the gas agenda. Discussions to date have focussed on a proposed Memorandum of Understanding between parties as well as a preliminary identification of a number of possible projects that could be progressed in the medium term.

There is also ongoing North-South co-operation in the sustainable and renewable energy areas. Ministers Dempsey and Smith recently published a preliminary consultation paper on an all-island vision for renewable energy to the year 2020 and beyond. The aim is to develop a long-term strategy for renewable energy on the island as a whole.

In the telecommunications sector too, important work is underway to improve technical, administrative and other areas to enhance mobile telecoms services on the island. Tackling inadvertent mobile roaming charges for customers in Ireland and Northern Ireland is being treated as a priority. The support of the mobile phone companies, who are members of your organisation, is appreciated.

In relation to transport, the Irish Government was pleased recently to announce joint funding with the British Government for the development of Derry Airport. This will bring real benefits to both sides of the Border in the North West.

Since I became Minister for Enterprise, Trade and Employment, the one topic that I’ve heard most about has been the need for competitiveness. Perhaps more than any other business pressure, this is the common interest that binds the strategic interest of both IBEC and the CBI. Competitiveness leads to more business, better jobs and higher levels of investment. It delivers a stronger economy and consequently a society where everyone has an important stake in growth and prosperity. Competitive economies have high employment rates but a high employment society of the future will not be static or rigid, neither State controlled or directed, but open, dynamic and free.

A dynamic economy means one that constantly creates new jobs to replenish the old. Competitiveness is at the heart of it. We need to be competitive in order to sustain existing jobs and generate new ones because jobs and the economic welfare of society, including living standards, are intrinsically linked.

The makeup of enterprise in Ireland, North and South, is changing fast. This will accelerate as the economies of the enlarged EU and Asia develop the economic sophistication and essential, efficient enterprise infrastructure that we developed during the 1990s. Our competitors are in rapid catch-up mode.

The mission of Government is to make sure that the business environment in which you prosper and create jobs is the best that a modern, wealthy, economy can provide. From my perspective as Minister for Enterprise, Trade and Employment, we need to have a shared understanding that a successful society needs a dynamic economy, which constantly responds to the evolving demands of international competitiveness. Remaining competitive is a constant challenge yet we enjoy some powerful strategic advantages. For example, in both corporate and personal taxation, key factors that drive freedom of choice, the National Competitiveness Council in its recent annual report showed we came number one.

More importantly from an all-island viewpoint, the NCC also revealed that Ireland came second in the EU for entrepreneurial activity. There has been a huge change in the willingness of individuals to take risks in business and we have built a strong entrepreneurial culture. Latest figures show 253,000 entrepreneurs on the island with 53,000 being in Northern Ireland. This presents both economies with enormous potential to use these risk takers to expand existing cross border trade that is valued at €2.5 billion.

The NCC provides us with a regular competitiveness health check and with some useful policy guidance for change. Its annual report last month gave us a snapshot of our relative competitive position and contains some good news and of course, some important challenges. While it is neither practical nor desirable to be number one in everything, I don’t see why in key areas that strengthen competitiveness we can’t use each others’ resources and special abilities in different technologies to radically transform all-island competitiveness.

Different investment priorities North and South have given us different world class abilities across a range of important enabling technologies. The imperative of all island competitiveness gives us an opportunity to jointly use these to transform the knowledge and technologies that must be built into new products and services. If enterprises on the island are to benefit from global opportunities, internationalise their businesses and survive against competition, technology collaboration is the only way to maintain hard- won markets and profits.

The importance of continuing to improve our competitiveness is also vital in tackling the challenges that both parts of the island face to continue to attract inward investment. The economies of Northern Ireland and Ireland are very different in terms of size and structure. As a result, the respective development agencies in each jurisdiction have, understandably, different portfolios of business enterprises and different strategies. This has not, however, prevented the agencies from identifying and pursuing collaborative all-island initiatives. Significantly, the Board of IDA and the Board of Invest Northern Ireland (INI) hold an annual joint Board meeting to update each other on issues such as strategy, opportunities for collaboration, EU affairs and other topics of mutual interest. These high-level Board meetings have resulted in a commitment to establish a Cross Border Virtual Technology Park centred on Derry and Letterkenny using funding from the EU Interreg III Programme. This is currently being progressed by executives from both IDA and INI and is the most current and practical example of joint efforts to create a platform for the development of new economy enterprises in the North West.

One key aspect of the initiative is that high specification telecommunications will be offered to overcome the disadvantages of physical remoteness which businesses and educational / research organisations currently have to deal with. This proposal has now been fully approved by the Interreg Steering Committee following the successful outcome of an economic appraisal. Work is now focused on implementing the proposal, including the tendering process for the telecommunications element of the initiative.

The huge progress that has been made in the economy in both parts of the island in recent years is due in part to the Peace Process and the Good Friday Agreement. But we are only scratching the surface of its potential to bring mutual benefit for all our people. I know that the Joint Business Council’s relationship with economic development agencies, North and South and with other cross-border bodies is professional, pragmatic and above all focussed on achieving results. You are to be congratulated for your efforts and long may your commitment to resolving barriers to trade and business development between the two jurisdictions continue.

ENDS

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