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Speech by the Taoiseach, Mr Brian Cowen TD, at UCD Michael Smurfit Graduate Business School, 'Growing Ireland' Conference - Beyond Borders, going international with your business' O'Reilly Hall, Belfield, UCD, Thursday, November 12, 2009 at 12.10pm

 

It is a pleasure to be here today at this the sixth, in the series of Growing Ireland conferences hosted by UCD Michael Smurfit Graduate Business School.

This morning's 'Growing Ireland' conference with its theme of 'Beyond Borders, going international with your business' couldn't be more appropriate.

We are living in extraordinary times for the World economy.

The Irish economy has been particularly badly affected and is going through an adjustment with few international parallels. We will have lost over 10% of our national income in a two year period.

The latest inflation figures out today show that prices fell by 6.6% in last twelve months. This means that the real value of take-home incomes has increased by that amount.

If prices had increased by that amount, there would be loud calls for compensatory pay increases. Equally, the fact that prices are falling must be taken into account when assessing the potential impact of wage and welfare adjustments.

One other fact is clear - as a small, open economy, sustainable recovery depends on increasing our exports of goods and services to world markets.

That means we must regain the competitiveness which has been lost in recent years.

To regain competitiveness, without the option of devaluation, means reducing costs and increasing productivity right across the economy.

There are many calling for fairness in the Government's response to the crisis - and fairness is at the heart of our response.

An essential part of fairness is protecting jobs to the greatest possible extent in the economy, and helping those who lose their jobs.

We have acted decisively over the past year with supports for the enterprise sector, including the Enterprise Stabilisation Fund and Temporary Employment Subsidy Scheme.

We have also invested heavily in additional training and education supports for people who have lost their jobs.

These measures will help in the short-term. But they can't substitute for a return to competitiveness based on lower costs and higher productivity.

Fairness also means ensuring that the public service, and sheltered sectors of the economy, play their full part in making the adjustment.

Otherwise, we will strangle the exporting sectors that are the focus of today's Conference with high taxes to fund unsustainable levels of debt.

Strong action now is required to provide a sound basis for export-led recovery.

These are not easy or pleasant decisions - but the exceptional circumstances I have outlined demand an exceptional response.

I hope that we can count on your support as we seek to make this difficult adjustment.

The one thing I want people to take from today is that we can't be passive. This is a time for decisive action because there will no magic wand that will instantly solve all our problems. We have to recognise the situation we are in as it is, not as we might like it to be, and deal with those realities. We have to face this country's problems, roll-up our sleeves and be prepared to work hard to help ourselves. Sitting back and waiting for the markets to sort themselves out is no solution.

When this global recession passes, I want Ireland to be well positioned to take full advantage of the opportunities that will be presented.

The lesson from severe global recessions in the past is that as well as weathering the economic storm, countries need to restructure their economies to target the next wave of economic growth.

Finland is an example: it suffered a severe recession in the early 1990s, but emerged even stronger because it made the right choices, in particular targeting research into communications and IT.

That is why the Irish Government was one of the first countries out of the blocks to devise a blueprint for repositioning our economy. This Government has taken significant steps to re-orientate policy so as to place Ireland firmly on the path to economic recovery. We now have a roadmap to economic growth and renewal.

We already have one of the best concentrations of high-tech multinationals in Ireland. Our plan is to encourage them to invest further in the high-value research and development areas that provide secure employment and increase exports.

We are already investing billions in research and we need to get the best possible return on that investment. We will now move this to a new level and create an exemplary research, innovation and commercialisation ecosystem - we will become an Innovation Hub in Europe.

Ireland will only thrive if we play to our strengths. The future economy must be sustainable and it will depend on exports. We need thousands of thriving Irish companies creating high-value products and services that will provide well-paid, quality employment.

This is the core thinking behind the Government's Smart Economy Framework. It is the vision of a green, high tech, high value economy, supported by a pervasive culture of entrepreneurship.

Earlier this year I established an Innovation Taskforce to identify further ideas to help realise this vision. I believe it can help us make the step-change required to replicate the success of our existing global companies such as CRH, Ryanair, Glanbia and Glen Dimplex with many more fast-growing Irish-owned companies.

Another key challenge will be to keep pace with the changes in international trade patterns and to follow the growth of the future. The projected growth in the Chinese economy is, perhaps, the most obvious example of this. But there are other countries, such as Brazil and India, whose economies are projected to grow rapidly in the years ahead. We must be active in seeking out opportunities and consistently strive to diversify our export markets. We must avoid over-dependence on any specific country or region. This involves breaking free of traditional patterns and comfort zones.

Such an approach has already been shown to pay dividends as is exemplified by the Government's Asia Strategy, which, in 2005, set key targets to be achieved through concerted effort by the relevant Departments and Agencies, to develop links with eight key economies in the region. As the present Strategy reaches the end of its life later this year, we have already surpassed all the key aims. Our exports have more than doubled and now stand at well over €10bn annually. We now have 233 Irish companies with a presence in those countries. Food and drink exports are significantly ahead of target and a whole range of other initiatives have achieved significant results in terms of tourism, education, academic links, diplomatic initiatives and other key measures.

As we look to the future, I want to make clear today that despite the challenging economic climate, this Government will continue to intensify marketing and promotion efforts and we will make every effort, in partnership with other key players, to secure business development opportunities for Irish companies. A number of very successful Ministerial-led trade missions have taken place so far this year to countries including France, Canada, South Africa and to emerging markets such as China and the Gulf States. Opportunities for exporting Irish companies were identified in sectors from financial services, telecoms and software, to education and construction.

We have to build on that work and to do this we must make certain that we fully utilise the innate talent of our people. It is our people that will always be the most critical ingredient in our national performance. We have one of the youngest and best educated workforces in Europe. It is their ingenuity and creativity which will drive the next phase of Ireland's economic development. That is the Irish advantage, and I am in no doubt that if we build on the natural advantage of our human capital and adopt new, strategic ways of thinking and doing business, we can expect a major acceleration of trade and investment between us and foreign markets over the coming years.

By facing difficult short-term challenges, we can adjust to the new economic realities and move on. But, if we face them head on, I know that Ireland has a very bright future. Optimism and potential are words we need to hear more of. We should not forget that our Irishness gives us a distinct selling point in the world today. People want to invest here, to visit here, to study and work here. We must value and nurture that cultural advantage as we look ahead and harness it in seeking out new markets and doing business internationally.

With an Irish Diaspora of over 80 million people claiming Irish descent, we have a natural world wide network to tap into. In this regard, arising from the success of the Global Economic Forum at Farmleigh last September, the Government will establish the Global Irish Network consisting of those invited to the Forum and other leading business and cultural figures from the global Irish. This network will be the first step towards refocusing and refining our brand as we seek to further develop Ireland's footprint in the world market.

In the crucial period ahead, the Government over a whole range of areas will being doing our very utmost to facilitate Irish companies in expanding abroad, whether through overseas investment or through exporting; to create the climate and to provide the support in which our exporters can thrive. We see this as a key driver of economic recovery and that means continuing to promote international trade and to create the optimum framework in which our international trade can grow.

I am delighted to see Frank Ryan of Enterprise Ireland on the panel here today. Together with the IDA they are doing a terrific job in promoting Ireland and Irish industry throughout the world and we must continue to provide them and other key state agencies that support our international trade, including the diplomatic service, with the resources to help drive the recovery.

I know that Enterprise Ireland have responded to the crisis facing many companies with new initiatives focused on markets within the eurozone, especially due to stimulus packages in other countries, as well as in new fast-growing markets in Asia and elsewhere.

They have also established a new department to help companies drive down costs, while providing support through the Enterprise Stabilisation Fund to viable but vulnerable exporters.

There are many successful companies who, with Enterprise Ireland support, are growing even in these difficult times.

For example, ATSR - a company in my own constituency providing systems to the emergency vehicle market - is expanding its R&D and manufacturing operations and overseas presence creating 30 new high value jobs.

Another example is EirGen Pharma, a specialist pharmaceuticals company, which is expanding its Waterford plant, creating 20 new high value jobs. EirGen services a growing number of international clients across leading world-wide pharmaceuticals companies.

These are just two examples of a vibrant base of growing Irish companies with big ambitions.

It is also vital that we prepare our exporters, particularly in the Small and Medium Size Enterprise sector, for what they can expect when they go abroad, and that we provide them with support when they are out there doing business for Ireland. It is in these areas that Government, through the State agencies, can best provide support.

Education and business are the basic building blocks of any knowledge based economy. I know that UCD is celebrating one hundred years of teaching business in Ireland this year and I congratulate you on that. I also want to commend UCD and the UCD Michael Smurfit Graduate Business School for organising this conference. It is this type of thought and its positive contribution to policy formation that is needed more than ever at this time of national change.

Education has been at the core of what we have achieved as a nation in the last fifty years. The current recession has been a major set back but I believe we will go forward again and that education and our ability to trade globally will be at the core of that recovery.

We must not only encourage our people to upskill as part of a life long learning process, but we must also challenge our educational establishments, particularly at the third level, to continue to provide the thought leadership and the courses which will provide our leaders of tomorrow, our innovators and our entrepreneurs, with the skills to succeed on the global stage. We need to train, educate and support our people to hit the ground running as they move into the work force and throughout their careers.

The challenges ahead of us are great but by working together in positive spirit I have no doubt we can overcome them. I wish you success in your businesses. Go raibh míle maith agaibh.

ENDS