Agency suffers embarrassment of riches

Falling unemployment saw IDA Ireland cut its job creation goal last year for the first time. Yet in a boom that showed no sign of slowing down, the State development body created almost twice the number of jobs it had expected.

In June, after creating a record 17,800 jobs in 1999, its target was reduced to 12,000 - year-end figures yesterday revealed it created 23,300 positions.

Such are the fruits of success in an economy which, ironically, is now short of labour.

For IDA Ireland, a change of focus to concentrate on regional development and upgrading existing positions did not deter significant job creation. Even so, 8,100 people lost their jobs at firms it supported.

This, said its chief executive, Mr Sean Dorgan, underlined the need for higher education - at post-graduate level particularly - and retraining. High-value industries with above-average productivity create better living standards for workers and are less vulnerable to global economic pressures.

The body recorded some success here. It said 40 per cent of new jobs agreed last year commanded salaries of more than £25,000 (€31,700), a rise from 25 per cent in 1999.

The labour shortage, Mr Dorgan accepted, would lead to "further significant pressure" on wages. On the plus side, IDA Ireland said 50 per cent of jobs agreed last year were secured for Objective One regions, deemed to have missed the rush to prosperity in the boom.

"A great beginning," said Mr Dorgan of the body's regional strategy. Yet, while he pointed to big-league projects such as a £50 million commitment by drug firm Teradyne to build a technology campus in Cavan, serious infrastructure problems lurk down the line.

The most significant is a severe shortage of excess capacity on the national electricity grid. Already under pressure on the east coast, the grid cannot withstand additional heavy demand north-west of a line between Galway, Carrickon-Shannon and Dundalk.

While network improvements can take up to seven years to complete, IDA Ireland would prefer delivery within one or two years.

Such speed is crucial in the fast-moving global business system where investment decisions on IDA-backed projects are taken. Indeed, Mr Dorgan pointed out that many recent gains derived from the Republic's ability to quickly tailor its education system to meet demand from international business.

There are other infrastructure problems.

While welcoming the Government's commitment to increase public service levies on certain regional air routes, Mr Dorgan said significant improvement was needed immediately on the road network. In addition, he said, broadband networks should be expanded outside Dublin.