BaileNuachtCartlann Aitheasc agus Preaseisiúintí

Opening address by Mr Brian Cowen, T.D., Taoiseach, at the IBEC HR Leadership Summit 2010 - Recovery through Talent - on Thursday, 30th September 2010 in the Aviva Stadium


"Meeting the Challenge of Economic Recovery"

I am pleased to be here with you this morning to open the IBEC HR leadership Summit 2010 and to be asked to address you on the theme of "Meeting the Challenge of Economic Recovery."

The period ahead between now and the end of the year is crucial for Ireland. How we respond to the challenges of framing the upcoming budget, restoring confidence in our banking system and getting people back to work will shape Ireland's future in the period ahead. Our duty in government is to discharge these responsibilities with determination and commitment.

Everyone here knows for the past two years we have been battling a recession that has crippled the western world and seriously threatened our country.

For many, the battle is very personal as it affects themselves, their families or their communities, as jobs and businesses have been lost.

For others, it is worries about their future that affect them, and the future of their children.

The Government is pursuing a clear strategy to secure economic recovery and to protect and grow jobs right across the economy.

This has been based on:

  • stabilising the public finances;
  • fixing our broken banking system and improving access to credit;
  • driving the competitiveness of the economy in terms of reducing costs, productivity growth and innovation across all sectors, along with a large infrastructural investment programme;
  • supporting businesses to retain jobs, grow employment as well as supporting those who lose their jobs; and
  • transforming the public service to deliver more effectively and on a basis the country can afford.

Implementing that strategy with determination and pace is crucial to retaining the confidence of those who lend to this economy, those who invest in projects here and consumers whose spending underpins so many jobs across the economy.

Stabilising the public finances
In order to provide the public services our people deserve we have to be able to pay for them.

As many of you know, for every €50 we spend on services, we must borrow approximately €20. Everybody knows that we can't continue to do this.

We have agreed, as part of our obligations as a Eurozone member, to reduce the amount we are borrowing by 2014 to a more sustainable level. It is in the context of the Eurozone that the ECB has been supporting the liquidity of our banks. We are on track to reach that 2014 target. In the forthcoming Budget in December, we will take another step towards that goal.

The past weeks show us that money markets remain difficult and we must be constantly vigilant in this regard. This recession has changed the financial world. The lesson we need to take from it is that we are in a competitive global market-place and soft option solutions are not going to provide the basis for sustainable growth and the improvement of living standards.

Stable public finances are a prerequisite for Ireland's speedy return to prosperity. That is why we must keep on course to reduce the deficit progressively to three per cent by 2014.

Fixing the banks and improving access to credit
This morning's statements by the Minister for Finance and the Central Bank deal with the urgent and immediate priority to underpin international and domestic confidence in our ability and commitment to restore our banking system and secure the long-term sustainability of our public finances.

The Minister's statement outlines the level of support that is required to deal with the Anglo Irish Bank situation and also outlines the position in relation to the other financial institutions. The numbers are stark but they are manageable in the context of correcting our fiscal problem over the next few years.

It is important to note that while the banking difficulties are a major complication, even in their absence, we would have a lot of work to do to address our budgetary deficit.

However, the good news is that already the banks are beginning to lend more allowing viable businesses to get the funds they need to maintain and create jobs. The most recent survey shows that 58% of companies accessed credit for their businesses and that is likely to increase over the coming months. John Trethowan is ensuring that the banks are living up to their part of the bargain and lending money when it is viable to do so.

The banking crisis has been a very expensive lesson, and one which our reformed banking regulations will never allow happen again. It is vital for our sense of confidence that the various Banking Inquiries produce results quickly and that anyone found guilty of criminal activity be punished in accordance with the law.

Driving competitiveness and innovation
The Government is working hard to drive competitiveness, productivity and innovation across all sectors of our economy.
Ireland is still a successful country with huge potential for the future.
As a nation, we have to believe in ourselves if we want other people to believe in us, to invest with us and to trade with us.
We still retain the major strengths and talents that allowed us to expand our economy and living standards to such a great degree in recent years:

  • there have been dramatic improvements in infrastructure, making Ireland a better place to do business;
  • we still have more people at work than we did ten years ago;
  • we still have many of the most successful international companies in the world operating here. In fact it is not an exaggeration to say that our success in FDI is the envy of our international competitors; and
  • we have a highly skilled, well educated, young workforce.

The challenge today is to build on those strengths and maximise the benefits to Ireland of the global economic recovery.

As the global economy lifts, we face renewed competition from east and west. To compete in international trade, in addition to being cost-competitive, Ireland must be more productive. That is what our Framework for Economic Renewal - 'Building Ireland's Smart Economy' - is all about. Productivity growth is the only sustainable basis for improving living standards. Our future economic and social development depends on our success in forging a new, competitive, entrepreneurial and export-oriented economy.

Innovation, therefore, is a key pillar of the Smart Economy. Innovation is about finding new and cost-effective ways of doing business. It is about producing goods and services, old and new, in new ways, to address new needs, at a competitive price, selling into new markets and creating and sustaining jobs.

When we think of innovation we tend to think of high-tech multinationals, universities, scientists and engineers creating the products and services of tomorrow. This is a crucial part of the Smart Economy and Ireland is well placed to become a Global Hub for Innovation and Entrepreneurship - a European Silicon Valley. The Government is implementing a range of policies to help this happen.

However, some have suggested that our economic strategy is only about white coats and university labs. We have never said that. Innovation is not just about the high-tech sector. Innovation is everybody's business.

Innovation is as important for sustaining the job of the supermarket worker as it is for sustaining the job of a computer technician.

Another key driver of productivity growth, prosperity and sustainable wages is investment in the productive capacity of our economy. To this end we have committed to investing just under €40 billion between now and 2016 - in our roads, communications, public transport, water services, education and business supports.

This includes the largest ever investment in the research capacity of our third level institutions, while building close links between the education system and industry.

We are training and educating more people than ever in the State. This investment will widen the circle of opportunity for people to make a full contribution to our smart economy and our communities.

In a significant recent development, the Government has launched a major new strategy aimed at increasing international student numbers in higher education by 50% and in English language schools by 25% by 2015.

On the full implementation of the five year blueprint - Investing in Global Relationships - the international education sector will be worth €1.2 billion per year to the Irish economy by 2015.

Our aim is for Ireland to be regarded as a world-leading provider of international education. We can become a global leader in the provision of high-quality education to the next generation of leaders, entrepreneurs, and decision-makers, who will make a difference in their own countries and who will form vital networks of influence for Ireland.

Protecting those who have been hit by unemployment and getting them back to work is the most pressing priority of this Government.

I want to assure you, that all Government departments, all state agencies and all involved in the provision of employment in the State are doing all they can to protect and create jobs.

The Government is pursuing opportunities in new markets over a whole range of areas and we are doing our utmost to facilitate Irish companies seeking out new markets and expanding abroad.

Additionally, we are working hard to improve Ireland's attractiveness as a place to invest and to do business and will continue to compete aggressively for Foreign Direct Investment.

In the last three Budgets we introduced a range of taxation and other measures to support enterprise and secure jobs, including

  • the €500 million Innovation Fund Ireland;
  • the Employment Subsidy Scheme which will help keep 80,000 workers in jobs; and,
  • the Enterprise Stabilisation Fund.

The Innovation Fund is about providing greater access to venture capital for enterprises with new business ideas.
The Employment Subsidy Scheme and the Enterprise Stabilisation Fund are maintaining significant levels of employment in viable but vulnerable businesses.

All our efforts, in restructuring the banking system, in stabilising the public finances and in reducing costs, are driven by the absolute priority of getting sustainable growth back into the economy, creating the jobs we badly need.
We have a clear strategy for creating jobs and we are open and ready to take new measures where appropriate and feasible.

We also have ambitious job creation initiatives in six broad areas based on industry wide reviews in key sectors.

  • foreign direct investment;
  • small businesses;
  • the agri-food sector;
  • tourism;
  • green enterprise; and
  • making Ireland a Global Innovation Hub.

This week, Government launched an integrated plan for trade, tourism and investment. This is a comprehensive 5-year strategy to generate 300,000 new jobs and boost exports by one third. As part of this process, we will set up a new Foreign Trade Council comprising all relevant Departments and agencies to implement the plan.

We are up for this challenge and we want all sectors of the economy and society to work with us on a sustained national jobs effort.
The resolute actions that we have taken are now producing positive results. Yesterday's live register figures marked the biggest monthly fall in the numbers signing on ever recorded. Seasonally-adjusted the total declined by 5,400, while the rate of unemployment fell marginally to 13.7%.
The National Accounts published last week showed only a marginal fall in GNP, while CSO data shows that the level of employment actually increased slightly in quarter two.

These figures are evidence that the domestic economy has stabilised.

It is easy to slip into a constant negativity and ignore these positive trends, thereby undermining confidence to spend and invest.

We need to retain a sense of balance, acknowledge where things are improving and focus on re-building confidence in the domestic economy upon which most businesses and jobs depend.

Public Service
The Public Service has a vital role to play in meeting the challenges we currently face. The demand from citizens and business for quality public services is greater than ever and we have to ensure that our Public Service is affordable and fit-for-purpose so that it can continue its contribution to a return to economic growth and prosperity.

In this regard, the ambitious implementation of the Public Service Transformation Programme, and in particular the Croke Park Agreement, is a top Government priority, facilitated by the work of the Implementation Body set up under the Agreement.

It is also worth emphasising that, in line with our commitment in the Renewed Programme for Government, the Government has decided to reform the way that the most senior positions in the Civil Service are filled by reconstituting the Top Level Appointments Committee (TLAC). Half of the members of TLAC will be appointed from outside the civil service. One of these members from outside the Civil Service will act as Chair.

In the case of specialist technical or professional posts, special arrangements may be made to delegate the final interview to a separate board or to appoint specialist expertise to the interview board. We have also asked that TLAC examine new approaches to attract stronger external fields, including appropriate cases of "head-hunting", while maintaining a competitive process in all cases. These revisions to how senior appointments in the Civil Service are made will assist in ensuring the Government has the best possible advice at its disposal.

The time has now come for the Public Service as a whole to deliver the required level of transformation with a strong emphasis on improved performance and delivery to the citizen.
Every public servant has his or her own role to play in this transformation, and I believe that, together, management and staff have the capacity to make this happen for the benefit of all concerned.

Much of the last two years has been spent debating about what caused the recession. As people realised the extent of it, it was natural to seek to apportion blame. Many factors were involved such as irresponsible banking practices, unsustainable borrowing and weak regulation.
I have always said that I accept my share of responsibility in the context of the advice and information available to me. But, I also know that it is my duty, as Taoiseach, to lead the way back to recovery.
The Government which I am privileged to lead is determined to ensure that Ireland's economic recovery is built on the type of innovative export-led growth that drove our earlier economic expansion.
We must persist with our approach because it is the only credible one to get more people back to work as quickly as possible. That means working together with government colleagues until 2012 and building on the solid foundations we now have in place to restore recovery.
I want to assure you of my own personal commitment and that of the Government to restoring our economy and securing our future prosperity through a sustained national jobs effort.

These are difficult times - and some hard decisions still lie ahead of us. But we can and will get through this if we pull together in a collective national effort, focusing on positive things we can achieve.

The efforts of business leaders like yourselves will be crucial in supporting us in meeting this challenge.