Enterprise Ireland forecasts jobs hike

STATE-BACKED business ventures ought to generate more jobs than they lose in 2004 the Joint Committee on Enterprise and Small Business was told.

Enterprise Ireland boss Frank Ryan told the committee his organisation was optimistic that on the basis of figures to date more jobs would be created than lost in 2004. For the first time in several years a positive outcome was on the cards, he said.

But Mr Ryan warned of dangers ahead to job creation.

The lack of the Business Expansion Scheme, under review by Brussels, was a huge threat to jobs going forward, he said.

Mr Ryan said its non-availability was causing "funding difficulties" for his organisation.

BES funding was "a threat to the regions and this is a fundamental issue for Enterprise Ireland and for the economy," he said.

Last year the organisation supported companies who created 11,207 jobs which were outnumbered by the 14,413 jobs lost resulting in a net loss of 3,206.

IDA boss Sean Dorgan warned his organisation expected little change in the number of jobs on its books which currently stands at 129,000.

Mr Dorgan told the committee that focusing on jobs or specific towns was not the best foreign direct investment strategy any longer.

He said high value added jobs and regional promotion was the way forward. That was the only sway to sustain inward investment.

He said competition for low assembly type jobs is no longer an option. In 2003 the IDA agreed 103 new investments projects. Of that 33 were greenfield, 31 expansions and 39 were R&D based operations.

Phil Hogan of Fine Gael demanded to know why Elan never delivered on its major multi-million euro project for Macroom, Co Cork. Given Elan has since then has targeted €35m in investment for Athlone where it was initially set up Mr Hogan said he was very interested to know the answer.

Mr Dorgan said the Elan project failed due to the hard times the company hit on in 2002. Subsequently it has returned to its initial core business and the Athlone project represents that strategic shift, he said.

Elan has no further interest in the Macroom site, he said.

On jobs, Mr Dorgan said in 2004 the IDA "will have had a good year. IDA no longer believes that jobs is the true measure of success from an inward investment perspective.

"High value added activity now provides the wining basis of going forward in the years ahead," he said.

Enterprise Ireland chief Mr Ryan said Irish companies were not doing enough on research and development.