Your Excellencies, Ladies and Gentlemen, Good Morning.
Thank you, Stuart, for your kind introduction. And thank you for inviting me.
This is, I believe, the third occasion that I have had the pleasure of speaking at the US Embassy’s Annual Economic Conference.
I’ve just returned from the United States where I had the opportunity to discuss many of today’s themes with President Obama and Vice President Biden.
The hospitality of the White House for St. Patrick’s Day reflects the close connection between Ireland and United States.
A future trip by Vice President Biden to our shores will again demonstrate the close cultural and political links between our nations.
While I was in the States I had the opportunity to update the President on our economic progress.
That Ireland has taken major steps forward in the last year. After three years of sacrifice, hard work, and rebuilding, we successfully exited the EU/IMF bailout last December.
We have successfully re-entered the bond markets at historically low levels.
That our private sector is creating over 1,000 jobs a week and our unemployment rate has dropped below the Eurozone average.
I welcome the latest figures published yesterday which show Irish unemployment dropping again to 11.8%, representing 21 consecutive months that our Live Register has fallen.
US-Ireland bilateral relations
But we still have a long way to travel before we get back to full employment.
Maintaining and building trade with our friends will remain as important as ever.
The US is Ireland’s largest export market for goods, while Ireland is now the 13th largest supplier to the US. The US is also Ireland’s largest trading partner in services.
And of course, the US is Ireland’s largest source of inward investment, with 585 US corporations directly employing upwards of 118,000 people.
One striking statistic illustrates the scale of this investment - US firms have invested more capital in Ireland since 1990, some $189bn, than they have in the four BRIC nations combined. That makes for a deep and enduring economic relationship.
Trade connections are not just limited to goods and services. Consider the fact that last year, Ireland welcomed a record number of more than 1 million visitors from North America.
And our economic relationship is very much two-way.
There are currently over 750 Irish-owned companies exporting into the US, and an estimated 220 Irish companies with operations in the States, employing almost 82,000 people.
Government’s Economic Plan
We still have a long way to travel at home before recovery is felt in all parts of the country.
Just as we had a plan to exit the bail-out, we now have a clear plan to guide the economy to better times.
A plan based on enterprise, not speculation.
After we exited the bail-out, we published our medium term economic plan. It has two connected central targets:
First, to reduce the Government deficit to under 3% of GDP by 2015 and plans to eliminate it altogether by 2018.
Second, to replace all 330,000 jobs lost during the recession with new jobs by 2020.
These aims are based on three pillars:
1. Responsible management of public finances. This is essential for continued investment and economic stability. With 90% of budgetary correction already done we will eliminate the deficit by 2018.
2. Banking Reform. While the sector has been stabilised, much more needs to be done. Banks must support economic recovery.
3. Creating Jobs. We have to get Ireland working again and to ensure that economic recovery reaches every part of the country.
Government has and will continue to set out our detailed jobs plans through our Action Plan for Jobs process.
While Forbes Magazine named Ireland as the best country in the world for business with competitiveness improving dramatically since 2011, we have to remain vigilant.
During the week our National Competitiveness Council published a report that highlighted a number of growing risks to our cost competitiveness that if left unchecked will hinder our recovery.
I want to assure investors in Ireland that this Government takes such advice very seriously. Indeed, I have publicly recognised the damage done to Ireland’s competitiveness from the increases in income tax rates imposed by the last Government, and have signalled that raising the point at which middle income earners enter the top tax band will be a priority for this Government when resources allow.
Another area of concern highlighted by the National Competitiveness Council was the high cost of credit for businesses relative to the eurozone average. The Programme for Government commits to the establishment of a Strategic Investment Bank to support credit availability for business investment, infrastructure and employment.
I am pleased to report that in the coming weeks the Minister for Finance will bring draft legislation to the Government to establish a new state vehicle to provide low-cost funding, including from the German State bank KfW, to Irish banks that lend on to Irish SMEs. I expect that this will result in a significant reduction in interest rates on new bank loans totalling hundreds of millions to thousands of Irish businesses.
Ireland’s High-Skill Economy
The availability of skills is another area that needs careful attention and can have an impact on economic recovery.
As a key part of our economic plan, Ireland is focusing on developing the high tech, high skill sectors of our economy, where we see strong potential for high-value job creation.
We also see the value of these sectors in generating innovative solutions to many of the social, economic and environmental challenges that we face.
Today, Ireland has strategic clusters in Life Sciences, ICT, Engineering, Services, Digital Media, and Consumer Brands. These clusters include a strong mix of leading global companies, international start-ups, and Irish SMES and home-grown innovative start-up companies.
A key Government priority is to ensure that we have the right people with the right skills to attract, retain and grow job opportunities and investment in these sectors.
It is estimated, for example, that the Irish economy can potentially add 44,000 high-level ICT job opportunities over the period from 2012 – 2018. This growth will contribute directly to Ireland’s economic recovery.
But to achieve this level of growth, Ireland’s labour force needs a solid base of ICT Skills.
While Ireland is renowned as having one of the most adaptable and flexible workforces in the world, we need to ensure we maintain this dynamic capability.
We need workers to adapt to changing demands, such as data analytics, cloud computing, mobile devices, social media technologies, IT Security.
And to build this adaptive capacity, we need an education and training system that can support skills formation, and skills conversion.
The education and training system is undergoing an unprecedented level of structural reform at all levels.
At primary level, curricula are being re-shaped to reflect the priorities of the literacy and numeracy strategy.
At second level, the Framework for the Junior Cycle provides for a root and branch reform, with a focus on innovative and entrepreneurial skills.
In addition, super fast broadband will be rolled out to all second level schools by the end of the year.
We are undertaking a major reorganisation of the higher education system, and putting in place a new framework for system governance.
In further education, our new agency SOLAS is working with the Education and Training Boards and with employers to ensure that further education and training programmes are more flexible and responsive to meet the needs of jobseekers and industry. This has not been the case in the past.
We are also working to modernise the traineeship system to bring about a greater focus on work-based learning and engagement with employers.
ICT Action Plan (2012)
Specifically in relation to ICT Skills, we launched our first ICT Action Plan in 2012, in partnership with industry.
The objective was to double the annual output from honours degree graduates by 2018. Level 8 ICT conversion programmes were a major feature of the 2012 Action Plan.
I’m pleased to say that the target of doubling NFQ Level 8 ICT graduates will now be met three years ahead of schedule, in 2015.
ICT Skills Action Plan (2014)
Following the success of this first plan, Ministers Quinn and Bruton jointly launched a new ICT
Skills Action Plan last month. This plan has one over-riding ambition - to make Ireland a global leader in ICT Skills availability.
The target is for Ireland to meet three quarters of the demand for high-level ICT skills from the Irish education system, with the remainder coming from skilled inward migration.
In 2012, less than 50% of demand for ICT skills was being met through the education system. That figure now stands at over 60%, and we aim to get to 74% by 2018.
The new plan was developed in close collaboration with industry, which is also central to its implementation. We are very pleased to have key industry representatives both on the Steering Group and on the delivery teams.
Companies obviously have a responsibility to upskill their own employees. This plan also provides opportunities for companies to become increasingly involved in collaborative initiatives.
STEM Education and Progress, Review Group
I want to comment briefly on another area where we are seeing increasing success.
Over the last number of years, a strong emphasis has been placed on improving the teaching of science, technology, engineering and maths – the so-called STEM subjects.
And we are now beginning to see some very positive results.
There has been a noticeable upward trend in students taking STEM subjects in the Leaving Certificate.
For example, last year we saw a record number of students taking Higher Level Maths. Now that bonus points are available for Higher Level Maths, our young people are voting with their heads.
And this year, early indications from the State Examinations Commission are that 31% of Leaving Cert students, or more than 17,000, have indicated that they will sit the higher paper.
We are also seeing increased take-up of STEM subjects at third level, where applications for Engineering, Computing and Science courses have increased for five consecutive years.
These increases are encouraging and reflect the Government’s targeted approach to ensuring that we have the right skills and the right people to enter employment in growth areas of the economy.
But there is more to be done – in areas like Biology, Physics and Chemistry.
In November, the Minister for Research and Innovation launched the STEM Education Review Group. I anticipate that their report – due later this year - will give important new insights into how the Irish education system can measure up to international best practice in STEM education.
I know that today we have an audience of entrepreneurs, academics, educators, innovators.
Some of you are concerned primarily with educational challenges, others with digital strategies, others with up-skilling the workforce, others with ensuring that your companies find and retain the right workers with the right skills sets.
I can say with confidence that the best solutions I see emerging from this country are ones based on collaboration - where industry, educators, researchers, and government work creatively and collectively to identify new solutions.
On that note, I want to wish you well for today’s conference. I expect that your conversations here will add further momentum to developing the businesses and the educational institutions that will underpin Ireland’s future success.