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News : Irish Economy Last Updated: Feb 25, 2013 - 7:21 AM


Irish Economy: 333 jobs Action Plan laundry list set for 2013 but no credible strategy
By Finfacts Team
Feb 22, 2013 - 3:44 PM

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Taoiseach Enda Kenny (c), Tánaiste Eamon Gilmore (r) and Minister Richard Bruton at the launch today of Action Plan for Jobs 2013.

Irish Economy: The Government today announced a new Action Plan laundry list of 333 initiatives and it has all the hallmarks of those national ideas competitions that were popular a few years ago -- they ostensibly may seem to have some worth but eventually do not survive a reality check.

The Action Plan for Jobs 2013 [pdf] with 333 targets to be ticked off reflects a round-robin endeavour to give the impression of momentum but it's interesting that there is no evaluation of the impact of the previous laundry list.

Today's report notes that "The first year of the Action Plan for Jobs approach saw more than 90% of the actions  committed to by Government delivered in the timeline set down."

It says: "We are climbing back up the international competitiveness tables again; our exports are at record high levels, not even seen at the peak of the boom."

In the World Economic Forum 2012/2013 global competitiveness index [pdf], Finland had a 3rd ranking. Ireland was at 27th compared with 11th in 2001 and 29th in 2011/2012.

IMD's annual World Competitiveness Yearbook 2012 says its criteria can be hard data, which analyse competitiveness as it can be measured (e.g. GDP) or soft data, which analyse competitiveness as it can be perceived (e.g. availability of competent managers). Hard criteria represent a weight of 2/3 in the overall ranking whereas the survey data represent a weight of 1/3.

Ireland has a 20th ranking up from 24 in 2011. It had a ranking of 7 in 2001.

There isn't much to write home about here but the main problem in terms of spin but more directly what are in effect lies, are the claims on exports.

On Thursday, Michael Noonan, finance minister, said at a Bloomberg conference in London:

"Exports are leading the recovery and in recent years our exporting sector has remained vibrant, competitive and robust. The level of exports is now well above that of the pre-crisis period, having increased by 3.2% over the first three quarters of 2012 to stand at 106% of GDP. The services sector is playing an increasingly significant role in export growth, having grown by 9.4% over the first three quarters in 2012, and now exceed the level of goods exports by just over a billion euro. This owes much to the significant price and cost adjustments that have taken place in recent years. That strong export performance means that Ireland’s balance of payments with the rest of the world is set to record a surplus for the third year in a row in 2012. The current account of the balance of payments recorded a surplus of €3,049m in the third quarter of 2012. This continued the positive trend of Q2 when a record surplus of €3,235m was recorded."

The claim in respect of services exports is absolutely false and it reflects the tax strategies of companies such as Apple, Google, Microsoft and Facebook.

Today's report says in use of the consultancy jargon term 'disruptive":  'In a major departure from the 2012 plan, Action Plan 2013 contains seven headline “Disruptive Reform”  measures – high-impact measures with highly ambitious deadlines, implemented in partnership with senior industry figures and selected because of their potential to have a significant effect on job-creation:

1. JobsPlus – over two years the State will pay €1 of every €4 it costs an employer to recruit a long-term unemployed person off the Live Register

2. ICT Skills – provide an additional 2,000 ICT graduate level professionals in 2013, and by 2018 lead Europe in terms of ICT graduates as a percentage of all third level graduates

3. Energy Efficiency – the Government will create a €70million Energy Efficiency Fund  to support 20 major projects in 2013 and ultimately create 5,000 jobs

4. Trading Online – get 2,000 more small businesses trading online in 2013 and 2014, with the creation of 3,200 jobs

5. Business Licences – create a single licensing application system for up to 25 licences in the retail sector, saving retailers over €20million per annum

6. Big Data – make Ireland one of the leading countries in Europe for Big Data, a sector growing by up to 40% per annum

7. Health Innovation Hub – Government will establish a world-renowned centre to establish Ireland as a leading location for start-up and growing medtech and healthcare companies

"As part of the new approach to these major projects, six senior industry figures with track records of developing businesses and creating jobs will be appointed to bring their experience and skills to bear on implementing the Disruptive Reforms and on Government jobs and enterprise policy more generally. These leading figures from a mix of multinational and indigenous industry are being asked to help to drive implementation and efficiencies and identify new opportunities for cooperation with the private sector. These individuals will also join a newly reconfigured National Competitiveness Council."

The missing issue from today's report is the failure to meet the 2006 target to be a world class knowledge economy by 2013.

Irish Economy: Innovation, a failed enterprise policy and inconvenient facts for 2013

The real value of goods exports has been almost static in the period 2000-2011, but the real value of services exports increased by 322% and in 2011 accounted for 48% of the value of total exports. However, there was no increase in total full-time employment in the internationally tradeable sectors (indigenous and foreign-owned) between 2000 and 2012.

Official unemployment was 75,000 in 2000 and 325,000 at the end of 2012.

SEE: Irish Economy: Economic fairytales of Ireland, exports, FDI and the IMF

ICT Ireland and the ISA (Irish Software Association), the IBEC groups that represent the technology sector, today strongly welcomed the announcement by Government to introduce major visa reforms to support growth "in the flourishing Irish tech sector." Coupled with the additional and very welcome 'high impact' reforms focusing on Big Data, ICT skills availability and online trading, today's Action Plan for Jobs sends a powerful signal to the international business and investment community that Ireland is serious about growth and success. Rapid implementation is now needed.

ICT Ireland and ISA Director Paul Sweetman said: “Visa reform is vital for the growth of the technology sector. The technology community, through IBEC, Open Ireland and other groups, has been leading the call for reform. Today’s announcement will allow technology companies to respond quickly to their markets, from their Irish base. The technology sector globally will continue to grow and create new jobs. The reforms of the 2013 Jobs Action Plan will ensure that Ireland is well-placed to make the most of future growth in the sector."

Property Industry Ireland (PII), the IBEC affiliate representing all sectors of the property industry, has welcomed the Government's launch of the 2013 element of the Jobs Action Plan. However, it warned that if the property needs of the IDA, Enterprise Ireland and other job-creating bodies are not met, the new investment being targeted will not be delivered.

PII director Finola McDonnell said: "PII has completed an exercise that clearly shows the emerging shortage of prime office space in metropolitan areas. With little new development or refurbishment of existing stock underway, we must urgently find ways to fund non-speculative development to allow the IDA continue its successful work in attracting foreign investment into Ireland. Only a handful of FDI appropriate buildings remain vacant in the Irish cities and foreign investors are quickly snapping these up."

"Yesterday, NAMA announced that it will focus its efforts on delivering office space in the Dublin Docklands, which is very welcome. However, prime office space is required in other areas, such as Cork and Galway, and without an appropriate level of lending into the sector, this will be difficult to fund."

PII is in continuing talks with the IDA, relevant Government Departments, the banks and NAMA to ensure that funding to deliver needed office space is provided. The Government's Construction Sector Strategy, due for publication in spring, may go some way to resolving this problem. Government action on property requires coordination and leadership.

"We don’t want to see a return to the development frenzy of six years ago," said McDonnell, "but we must ensure that where new build is required to support employment, it can happen in a timely and cost-effective way."

Statement from Technology Entrepreneur and founder of Open Ireland Sean O’Sullivan re Action Plan for Jobs

 "For every 5,000 jobs we fill in the Irish tech sector, we can create 20,000 jobs in the general economy (?).  Breaking open the logjam of hiring this tech talent is a key step to re-invigorating the overall economy, and we welcome the steps announced in the Action Plan for Jobs, of planned reform of the Employment Permits system. All of us in the Technology sector look forward to the details of these proposals being made known in an announcement from Minister Richard Bruton TD. in the coming weeks. The scheme has been dubbed a 'Technology Visa' for Ireland, and it could put Ireland first in the world in talent availability and competitiveness when it goes forward." 

Open Ireland has proposed the introduction of a specific technology visa for Ireland. According to Sean O’Sullivan “The first country in Europe to do this will benefit from incredible growth and employment potential."

Finfacts demurs: Entrepreneurs and startups have the best chance of success in familiar locations.

3 out of 333 new actions aimed specifically at construction sector which accounts for 25% of Live Register

The Construction Industry Federation (CIF) has said the publication of the Government’s Action Plan for Jobs 2013 underlines the need to have a representative for the construction sector in the Government.  The CIF believes that the sector needs a voice in Government fighting for the industry if the large numbers of unemployed former construction workers is to be addressed. 

From the 333 points put forward by the Government in the updated Action Plan a total of 5 actions points relating specifically to the construction sector and only 3 of these were new points.  This is despite 109,000 former construction workers being currently on the Live Register, representing one quarter of total unemployment. 

Speaking in reaction to the plan, CIF director general Tom Parlon said, “Any actions to reduce the number of unemployed construction workers must be welcomed.  In that sense the CIF looks forward to seeing the Government bringing forward the measures they have outlined in the latest Action Plan relating to the construction sector. 

“The ongoing review of the development management guidelines will help our industry and the CIF also eagerly awaits the publication of the Forfas strategy for the construction sector.  There were also some measures relating to the green economy and foreign direct investment which will in time create construction work.

“However we are disappointed that only 5 of the 333 action points brought forward specifically deal with the construction sector and of those 2 points have been recycled from the 2012 plan.  Surely the Government should be bringing forward more measures to create employment opportunities for the sector that is responsible for one in four of the people on the dole queues? 

“It is another example of how the construction sector is not receiving sufficient representation in Government.  We’ve seen this with the ongoing delay in enacting the Construction Contracts Bill, the lack of action to help the sector in Budget 2013 and on numerous other occasions. 

“The industry needs a voice in Government representing our industry and helping to promote construction related issues.  As it stands we are falling between the various Departments and none are taking responsibility for promoting construction issues. 

“If the Government wants to show the action they are taking to help employment in our sector this is one step which would cost little to the Exchequer but could pay huge social dividends to our industry and to the number of construction workers on the Live Register,” Parlon concluded.

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