On the 13th February 2012, the Government launched the much anticipated Action Plan for jobs. This is part of an overall plan to “rebuild the economy and build more jobs” and contains 270 actions which will be implemented by Government departments and State Agencies all working together to support, and remove any existing barriers to, job creation across the economy. This is the first instalment of a multi-year process to make “Ireland the best small country in the world to do business” which aims to increase the number of people working in Ireland by 100,000 by 2016. Firstly, we will briefly consider the details of the action plan and secondly we will consider the fallout from this and the likelihood of success.
Action Plan: Seven Key Goals
In order to ensure that targets are met a Monitoring Committee has been established to oversee the plan and they will assist in the monitoring of action plan’s seven key goals:
1. Building Ireland’s competitive advantage
2. Supporting indigenous start-ups
3. Developing and deeming the impact of Foreign Direct Investment
4. Developing employment initiatives within the community
5. Assisting indigenous firms to grow
6. Attracting inward entrepreneurial initiatives within the community
7. Exploiting sectoral opportunities
Action Plan: Competitive Advantage
In order to build Ireland’s competitive advantage, in line with the EU’s 2020 strategy the Government will look at skills, infrastructure, innovation and costs involved with an emphasis placed on the need for growth and a sustainable economy. The government is seeking to increased competitiveness through reducing cost of doing business, selling more goods and services and, as a consequence, employing more people. This will help Ireland become more attractive for foreign firms to locate here. In order to kick-start the process, the government have taken and will take steps to ensure our competitive advantage is sustained, such as:
- The government have introduced new legislation to remove barriers to competition which will improve costs greatly and support those who are not working.
- They are amending the Universal Social Charge which will help low paid employees, seasonal staff and part time staff.
- The banking system will be restructured to target market failures in accessing credit.
Ireland is very marketable in terms of our Research and development capabilities and through innovation and R&D, it is envisaged that Ireland’s products will be differentiated and will help goods and services sell. The plan hopes to attain this through prioritising funding across credible employment, commercialisation of research into certain goods and services, using effective collaboration and through placing research personnel in Irish firms.
Action Plan: Supporting Indigenous Business & Developing Community Initiatives
A welcome aspect of the action plan is the recognition from the Government that supporting and creating indigenous firms is extremely important for the Irish economy. Indigenous companies are extremely important to local communities and they make a huge contribution to regional development. As such the Government is targeting the introduction of new target funding schemes and while concurrently reducing associated costs as much as possible.
In addition to facilitating new indigenous start-ups a key aspect of the action plan is to create jobs and opportunities through assisting existing indigenous firms. This will not be without its difficulties however given that on a daily basis indigenous firms face a steep demand in the domestic market and face an uncertain international environment. Thus, the action plan will seek to aid as much as possible through bilateral free trade agreements with other countries as negotiated by the EU in an effort to diversify trade patterns and strengthen exports.
Action Plan: Attracting inward entrepreneurial initiatives
The action plan will aim to increase Ireland’s ability to communicate with the global community, increase innovation and attract entrepreneurs to set up and maintain their businesses in Ireland. The aim is for Ireland to be the “go to” place to start up a business. Ireland has a good record in supporting start-up companies locating in Ireland and the continuation of this is vitally important because it will add to the diversity and the Irish skill base
Action Plan: Foreign Direct Investment
Another aspect of the plan is to develop and deepen the impact of Foreign Direct Investment (FDI). Foreign firms contribute greatly to Ireland’s exports, jobs and exchequer funds and they present major opportunities for Irish individuals to build international experience that contribute to Ireland’s own market as well as creating strong global networks.
Action Plan: Exploiting Sectoral Opportunities
Finally, the last step in this action plan is exploiting sectoral opportunities. All sectors will benefit greatly from this. It is envisaged that there are many sectors where Ireland can create and maintain a competitive edge, such as manufacturing, health and life sciences and the green economy.
Analysis
It is interesting to note that the action plan above seems very much focused on supporting and developing the SME sector in Ireland. It would seem that the Government are taking the stance that Ireland’s low corporation tax and highly skilled work-force will continue to attract the larger corporations. Indeed this can be evidenced by the recent announcement by PayPal that they will create a further 1,000 jobs in Louth over the next few years which amounts to 1% of the government’s overall 100,000 target alone. As such the focus must now be on developing indigenous and local businesses in order to support local economies. What is very much interesting about the Action Plan is that it has set itself targets to be achieved. While this may not seem too ground-breaking I would ask any reader to recollect any Government plan in the history of the State that has tied itself down to specific targets. In this respect the Action Plan has set a goal and a deadline for delivering that goal. The success or failure in respect of achieving this goal will no doubt now represent the legacy of this Government as it has really put its neck on the line.
Criticisms of the Plan
As will no doubt occur with any plan from any Government, opposition parties will criticise the content and validity of that plan. In this respect, the Action Plan for Jobs has received widespread condemnation from opposition parties to the effect that it is vague, lacking in detail and is effectively just a PR stunt. However, it is suggested that the Action Plan is quite detailed in its aims and objectives and the seven key areas outlined above are most certainly well-received. One criticism on the plan may be that it is a bit light on actual strategies to be adopted to implement these goals but it would be no doubt difficult to list an exhaustive implementation strategy for a plan that aims to create 100,000 jobs. It is also worth noting that the Government has targeted 20,000 of the 100,000 jobs target to be created in the manufacturing sector alone. This in itself has been widely criticised as overly ambitious.
Conclusion
To conclude, the scale of this action plan is enormous and it will not be easy to fix the problems that currently exist. However, the determination of the Irish Government has to be credited and it is certainly pleasing to see that “jobs” are at the forefront of Government thinking and strategy. It remains to be seen if Ireland will be the “best small country in the world in which to do business” and no doubt this Government will live or die by the success of that mantra. What must be worrying for the coalition is that their success may be out of their own hands anyway as all of our destinies are being indirectly manipulated by the Eurozone crisis.
