The National Competitiveness Council (NCC), today (Wednesday) has outlined its priorities for Ireland’s competitiveness in its annual policy report, Ireland’s Competitiveness Challenge 2014.
This report, which is produced under the Action Plan for Jobs 2014, outlines the Council’s view of the main competitiveness issues confronting the business sector in Ireland over the medium term, and sets out a series of policy responses required to address these challenges.
Building on their earlier benchmarking of Irish competitiveness, the Council focus on six major themes in the 2014 report:
§ Addressing cost competitiveness;
§ Broadening the tax base and investing in economic infrastructure;
§ Enhancing our skills base;
§ Developing our enterprise base;
§ Improving access to finance; and
§ Rebuilding the trust of citizens in the ability and willingness of public and private bodies in Ireland to adhere to the highest international standards.
The report finds that while recent competitiveness improvements leave Ireland well placed to take advantage of any upturn in global markets, we remain vulnerable on a number of fronts. Firstly, the report highlights the risk that recent gains will be eroded unless action is urgently progressed to tackle structural impediments to competitiveness. Much of the recent improvement in Ireland’s competitiveness can be attributed to the cyclical effects of the recession; only structural reform can embed these improvements on a more permanent and sustainable basis. In this regard, reforms to social welfare continue to be important to encourage the take-up of employment, and the Council continues to stress the importance of promoting competition in sheltered sectors of the economy.
Secondly, the report notes that as an export driven economy, Ireland’s prosperity is largely dependent on the health and strength of foreign markets. To spread the risk (e.g. of weak European growth) and minimise the impact of external shocks there is a need, therefore, to diversify markets into which we sell and broaden the sectors in which we operate.
Launching the report, Dr Don Thornhill, Chairman of the NCC welcomed the upswing in Ireland’s economic performance, noting, “Ireland’s economy maintained its momentum through 2013 and into 2014. Improvements in our labour market, continued stability in the public finances, and a generally positive macroeconomic outlook reinforce the view that we can look to the future with a greater sense of optimism”.
Dr Thornhill continued, “However, we must also protect what we have – we must be quite clear that the hard won competitiveness gains that we have made since 2008 are in danger of being eroded as the economy returns to growth. These gains cannot be allowed to dissipate through either overconfidence or inertia. To protect and enhance Ireland’s international competitiveness, we must maintain the momentum generated through the hard work and sacrifices of the past five years, and continue with a programme of structural reform. Only a concerted programme of action will deliver the conditions necessary to support continued economic and employment growth into the medium term”.
The Chairman also noted, “A timely message in this year’s Challenge – particularly given recent discussions about Ireland’s international reputation and announcements in relation to tax changes for multinationals – is the issue of trust: trust in policymakers, trust in institutions, trust in companies. While trust is intangible, it is an important international currency. A reputation as a secure and responsible location in which to do business is central to competitiveness”.
See link to report below:
Ireland’s Competitiveness Challenge 2014 <http://www.competitiveness.ie/publication/nccSearch.jsp?ft=/publications/2014/title,12793,en.php>