John Deasy

I RAISED the increasing concentration of IDA-supported jobs in Dublin, Cork and Galway on the floor of the Dáil last Thursday afternoon.

I tabled the topic on foot of last week’s comments by IDA Ireland chief executive Barry O’Leary who maintained that, even with EU Regional Aid incentives, it’s becoming increasingly difficult to convince companies to invest outside of these three cities (see separate post).

I described the annual announcement as to where IDA-backed foreign direct investment went the previous year as entirely predictable; noting NUI Maynooth research that shows as many as 82% of overseas jobs created in the past six years have gone to the aforementioned urban centres.

Minister of State for Small Business, John Perry — standing in for Enterprise minister Richard Bruton, who was attending a special Cabinet meeting on jobs — said he appreciated my concerns.

However, his response largely focused on defending Ireland’s need for regional aid, rather than correcting what’s wrong with the skewed policies currently in place.

I stressed that the existing EU regional aid guidelines clearly aren’t working, and haven’t been for some time — wondering why the Government hadn’t sought to have them amended already.

The Department of Enterprise is preparing a submission to the European Commission on drawing up new aid guidelines for the post-2013 period. I said the obvious question for Minister Bruton is how is he going to incentivise companies to locate in the regions that need investment most?

Having come to the conclusion that very little thought is being given to the issue, I feel the IDA is quite content to announce yearly job creation totals for Ireland Incorporated and leave it at that — without tackling the massive disparity in where these jobs are based.

As an example of how lopsided this regional imbalance has become, I pointed out that the southeast — unlike the Border/Midlands/West (BMW) region — doesn’t qualify for the highest levels of investment aid. This is despite having almost 19% unemployment, according to the latest CSO figures.

I said to John Perry that the Minister and the Taoiseach need to start thinking about where IDA-sponsored jobs are being created and where they’re not being created — and called on them to redraw the regional aid map to target unemployment blackspots like Waterford.

*READ WHAT JOHN HAD TO SAY IN FULL, AND THE MINISTER'S REPLY, HERE

Regional Aid map 
must be redrawn

John Deasy

The regional aid or investment aid guidelines for foreign companies investing in areas of high unemployment need to amended immediately by the Department of Enterprise, Trade and Innovation.

The amounts involved should be increased and weighted more towards areas suffering the highest levels of unemployment in order to incentivise foreign investment in regions outside of Dublin, Cork and Galway.

IDA chief executive Barry O’Leary said this week that even with regional incentives, it was proving increasingly difficult to convince companies to invest outside Dublin and Cork.

Ever since Mr. O’Leary took over the IDA in 2008 there has been an increased concentration of jobs created by foreign firms in Dublin, Cork and Galway. I do not believe the IDA has any serious policy for attracting investment in the regions outside of these urban areas and the problem is getting worse not better.

Research carried out this year by professors at NUI Maynooth found that as much as 82% of jobs created here by overseas firms in the past six years have been centred around Dublin, Cork and Galway. They found that almost 80% of jobs created by new foreign firms in the last decade were located in Dublin, Cork and Galway.

These three cities also accounted for 62% of job gains in existing foreign firms and less than half of the job losses in that period. The process of concentration in these three cities has accelerated since the onset of the economic crisis in 2007.