Mayor Sean Counihan claims that the area is being neglected by state agencies responsible for attracting investment in manufacturing and other sectors.
Killarney has lost more than 1,500 industrial jobs since the mid-1990s and 3,500 people in the area are registered as unemployed.
The Labour party mayor called for renewed efforts to stimulate job creation and to create a proper balance between tourism and other forms of employment.
“Industrial jobs are vital to this town,” Mr Counihan told Killarney Town Council. “We may be the number one tourist town, but we’ve gone back to the situation that pertained in the 60s and 70s, when there was quite a long shoulder season in tourism.
“We had only one visit from the IDA last year. We have to fight our case and it seems to me that fight will only be taken by us as a town council. We’re the only body in this town talking about industrial jobs.
“There’s a mistaken feeling out there that Killarney is ‘fine’ because of tourism, but that’s not correct and we’re not getting a fair crack of the whip.”
Mr Counihan also said that many employers seemed to be unaware of a “raft” of schemes and incentives to create employment.
The former Pretty Polly factory in the town, where more than 1,000 people were once employed making ladies tights, has lain virtually unused for several years, while several other factories in the area have also closed.
The town council owns the sprawling Pretty Polly plant, which is available for new enterprises.
Killarney’s key industrial employer is Liebherr (Ireland) Ltd, which employs more than 500 people in the manufacture of container cranes for the international market.
Liebherr, which has been in Killarney since the late 1950s, is extending its huge production facility.
The retail sector has also seen major expansion in Killarney in recent years, with some top brand names, including Marks and Spencer, opening outlets in the town.
However, town manager John Breen has said that the problem of high rents in Killarney needs to be tackled if investment is to be attracted to the town and jobs created.