Speech by Minister Martin at the Launch of the Report of the High Level Group on Manufacturing

Tá an-áthas orm bheith i bhur láthair ar an ocáid seo. Tá me buíoch dibh as an cuireadh agus an fáilte forchaoin a chur sibh romham.

Ladies and Gentlemen I am delighted to be here today (Wednesday, 2^nd April 2008) to launch the Report of the High Level Group on Manufacturing , prepared under the Chairmanship of Mr. Joe Harford. You all know the truism that “Everything Changes” and this also covers manufacturing. Manufacturing is evolving and we are moving towards a “Factory of the Future”.

The Report acknowledges the importance of the Manufacturing sector to the Irish Economy and its contribution to the economic success, which this country has enjoyed over the past 15 years.  That success has been built on the back of a strong manufacturing sector underpinned by significant overseas investment. Ireland is no longer a low cost economy and manufacturers in particular are facing increased competition from producers in lower cost economies. We have responded by positioning ourselves as a location for more advanced activities, with more qualified and better paying jobs. The 2007 Business Environment Ranking of the Economist Intelligence Unit placed Ireland 10^th globally out of 82 countries, naming it as one of the most attractive business locations in the world. The pipeline of new business for which IDA Ireland is competing is as strong as at any time in recent years and we remain confident that Ireland is well placed to secure significant investment during 2008 and beyond from key target sectors such as Pharmaceuticals, Biopharma, Medical Technologies and Information and Communications Technology.

Recent announcements such as Zimmer, Green Isle Foods, Genzyme and Lancaster, Thermo King and others, to establish or expand their factilities in Ireland, further confirms our competitive position worldwide to sustain high-value manufacturing activities for leading global companies with an abundance of highly-skilled and experienced people.

The model of manufacturing in developed countries is changing and Irish-based enterprises are adapting to those changes and engaging in higher value added activities in order to compete in the global marketplace. This has been achieved as a result of increased productivity, technology levels and sophisticated skills of Irish employees. Many companies in Ireland have built world-class high value added manufacturing and services capabilities, particularly in food, information and communications technology, software development, pharmaceuticals and medical technologies. Ireland’s existing expertise provides a base for continued wealth creation over the next decade and we envisage that Ireland’s manufacturing base will continue to evolve.

The Report also highlights the challenges facing the sector. The key message above all is that manufacturing has evolved significantly in recent years and we must adapt and develop our strengths if we are to succeed. Manufacturing today encompasses a broad range of activities from research and development through design, production, logistics and distribution to marketing and after sales service.

The Report outlines the challenges and opportunities facing the manufacturing sector in Ireland over the coming decade.  More importantly, it outlines the measures Government and industry must take if we are to meet those challenges and capitalise on the opportunities. Specifically, the Group has identified key areas on which we must focus - Innovation, Skills, and Competitiveness. Key among the challenges facing the sector are the increased pace of Globalisation which has resulted in increasingly intensive competition for markets and mobile investment (FDI).

Ireland’s manufacturing future depends on a manufacturing sector that is Capital Intensive, Knowledge Intensive and Skills Intensive, focused on developing innovative products, services and solutions and meeting the needs of markets and customers underpinned by a participative company culture. We see the example of Keenans Systems, a company that has operated in the engineering sector serving the agricultural sector over the past thirty years –a sector that might be considered ‘traditional’. The company developed an in-depth understanding of its customer needs. It has responded effectively by providing a combination of product and expert nutritionist advice and has continuously invested in product and process development. Today, Keenans Systems has secured a position as second in the world for its niche products and services.

Other examples that I could cite include Eurostyle, a textiles company operating a licensing model in Cork, employing as many people today as it did 20 years ago: Food companies such as Green Isle who only yesterday announced the creation of 70 new jobs in Galway at its frozen pastry business. Glanbia and Kerry have evolved their operations to address changing consumer demands: Combilift, another successful engineering company.

The company that

• recognises global opportunities;
• develops an ability to be responsive to and adaptable in the face of change;
• invests in mechanisms to increase productivity and continuously innovate; and that
• supports continuous learning for all staff throughout the firm,

is one that is likely to be successful in creating added value for its customers. Ireland has many firms today that have demonstrated this capability. We need now to support and encourage others to make the necessary transformational change in how they operate.

The Group has outlined a vision for manufacturing based on innovation (both technological and non-technological) and advanced manufacturing. Capitalising on these opportunities will require a new orientation for enterprises in Ireland, both foreign and indigenous. The Group’s recommendations seek to substantially enhance existing manufacturing by delivering the environment and skill set necessary for sustainable success in the contemporary competitive environment.

The key business imperative for you, your companies and all Irish business is to be innovative and competitive. And underpinning these is the most fundamental requirement of all – to have the leadership capability, the ambition and the mindset to attain high sustainable international growth. Growth in business, revenue and profitability is the ongoing challenge of any company. World-class leaders and management teams are key to meeting that challenge

To make this happen, it is vital that Employers Government and Employees work together to create an innovative, integrated and progressive workplace. The Group acknowledges the relevant policies that have been put in place and the substantial number of supports available to the manufacturing sector. The report contains some 27 recommendations directed at key areas. The group also recommends the establishment of a Manufacturing Forum to take responsibility for progressing the implementation of the report and to ensure that manufacturing remains central to current and future industrial policy.

The Programme for Government contains a range of commitments focussed on maintaining and enhancing our framework competitive conditions, and promoting new areas of competitive advantage, including developing our R&D base, investing in critical physical and communications infrastructures, and promoting tertiary education and lifelong learning. Over the period of the new National Development Plan the Government will provide €3.3bn investment specifically to support the development of the indigenous and FDI enterprise base not to mention €8.2bn for the Science Strategy for Technology and Innovation and €2.8 bn for upskilling the Workforce.

We must renew Ireland’s historic commitment to education and training to provide the skills base industry will need; we must maintain a competitive environment to drive economic growth and we must continue to provide capable and flexible Government that can quickly identify policies required to facilitate change and implement those policies across a wide spectrum of activities in a cohesive manner.

I would like to take this opportunity to thank Joe Harford and the all the members of the High Level Group for their work and the contributions they have made to this report. One of the major tasks now facing the Social Partners is to give effect to the recommendations of the group, and I welcome in that context the setting up of a manufacturing Forum that will drive the implementation of the recommendations set out in this report. It will also act as a “Clearing House” for policies impacting on the sector and as a champion and advocate for the sector in the future. The manufacturing sector has been one of the mainstays of Ireland’s economy for many years and we have built a world-class reputation across a range of technologies. The challenge now is to maintain and grow this performance and ensure the continued success of the Irish manufacturing Sector. 

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