THE Government is to review ways of encouraging multinationals to add further activities to their existing operations.

The aim is to try to ensure that the companies become further rooted in Ireland, through carrying out a more diverse range of activities. It, is planned to coax them into drawing more on domestic sources of technology support.

Announcing the review, the Minister of State for Commerce, Science and Technology, Mr Rabbitte, said it was a "regrettable fact of life" that effective management of existing production operations is no longer enough to secure the future of any overseas company in Ireland.

"The challenge for managers is to be successful at convincing their parent companies to add more responsibilities, so as to make the Irish operation a more indispensable part of the entire corporation," he said.

Mr Rabbitte said such additional responsibilities include software development customer support; marketing and distribution; and research and development.

He was addressing the American Chamber of Commerce Ireland business lunch yesterday. He said the recently published White Paper on Science, Technology and Innovation was aimed at helping to further "embed" multinationals in Ireland.

"In broad terms it is undeniable"that Ireland is currently one of the most competitive locations for inward investment in Europe.

Since 1980, 40 per cent of all US, new inward investment in European electronics has come to Ireland four of the top six US PC manufactures, Apple, Dell, Gateway, 2000 and AST have all invested in Ireland," he said.

He added that 60 per cent of ally PC package software sold in Europe is manufactured in Ireland.