Government considers competitiveness challenges
- Published on: 12 September 2024
- Last updated on: 12 April 2025
Taoiseach Simon Harris, along with Minster for Enterprise, Trade and Employment Peter Burke and Minister for Finance Jack Chambers, earlier this week briefed the Cabinet on the Competitiveness Summit hosted by the Taoiseach on September 2nd.
The Summit focused on the challenges facing Ireland in maintaining its competitiveness in a changing international and European context, the importance of managing the factors under our domestic control, along with the need to address infrastructural deficits, cost pressures and ensure a pro-enterprise economic environment.
The Taoiseach said:
“Ahead of Budget 2025, and given developments at the EU and international level, the Competitiveness Summit I chaired last week was a timely opportunity to discuss the major competitiveness challenges being faced by Ireland and our enterprise community and what can be done to address these.
“Ireland has enjoyed exceptionally strong economic performance in recent years. Employment is at record levels. However the international context is rapidly changing, and we recognise that many businesses, whether indigenous or FDI, are facing increased challenges, including on the cost of doing business.
“The Government has now made a number of initial decisions to ensure that Ireland retains its competitiveness and reputation as a country in which business can prosper, ensuring continued strong job creation, growth and prosperity.”
The Minister for Enterprise, Trade and Employment Peter Burke added:
“As an open economy we must be aware of global economic developments, while also ensuring that we continue to pursue policies domestically which enhance our competitiveness performance.
“With the publication of the Draghi report, European competitiveness is now top of the EU agenda. We are ready to respond with these domestic policy developments today to maintain Ireland’s competitiveness.”
The Minister for Finance Jack Chambers also added:
“I welcome the outcome of last week’s Competitiveness Summit. The actions agreed are the first steps in addressing serious issues which are key to our future economic performance. The global economy is changing; powerful forces are creating continued challenges for small open economies. Protectionism has returned in trade and investment policies globally, which will make competing for market share and investment increasingly difficult in the years ahead.
“This means we must take action now, to control the ‘controllables’. It is vital that we address domestic impediments to trade and investment by making swift, strategic interventions which will boost both our competitiveness and productivity.
“To achieve this, we must ensure that multiple labour policy changes are implemented without undermining our SME sector. We must also support all sectors to be more productive by implementing policies including the National Broadband Plan, the Digital Strategy and the White Paper on Enterprise.
“We must pivot from focusing on the quantity of public spending, to quality of public spending. In particular, our competitiveness can be enhanced by shifting the composition of public spending; by restraining current expenditure while increasing capital investment to address infrastructure deficits in energy, water, and waste treatment.
“Finally, we must address the unintended consequences of policies which have damaged our ability to remain competitive. This is particularly relevant for the planning system, which is one of the most significant blockages to investment in critical infrastructure.”
Responding to the Summit, and the challenges facing Ireland’s competitiveness, the Government has made a number of decisions including;
i. That the competitiveness challenges facing Ireland, as considered at the Competitiveness Summit, would be prioritised by Government as part of the preparation of Budget 2025;
ii. The Government would continue to progress important reforms to address competitiveness challenges including on the delivery of infrastructure, on costs and delays in the legal system, on financing the scale-up of Irish enterprise, and on maintaining our attractiveness as a location for investment and regulation of the digital sector;
iii. The Government will increase its involvement in, and funding for, Important Projects of Common European Interest (IPCEIs) where these present strategic opportunities for Ireland;
iv. The Government will introduce an initiative to minimise the regulatory burden on SMEs including by rigorously applying the new SME Test across Government Departments, and by consulting with business to identify additional areas where the regulatory burden could be reduced;
v. The Minister for Enterprise, Trade and Employment, would develop proposals to enable and attract strategic future investment of scale across key sectors, especially manufacturing;
vi. Work will be undertaken by Government on considering options for expediting delivery and the optimum funding model for strategic national infrastructure, in particular investment in energy grid, water infrastructure and public transport, while also ensuring Ireland’s cost-competitiveness as an investment location;
vii. Additional resources will be provided to the Competition and Consumer Protection Commission (CCPC) to focus on identifying and removing barriers to competition in domestic markets;
viii. The Government will continue to keep under review the timing and phasing of labour market reforms, taking account of up-to-date impact analysis, to ensure that cost burden on SMEs in most-affected sectors is sustainable;
ix. Budget 2025 will set out a pathway for a sustainable utilisation of the National Training Fund to, amongst other things, increase investment in employment focused skills and training assisting and enhancing competitiveness and productivity of business;
x. Options to further incentivise business investment in R&D and innovation, including enhancements to the R&D Tax, to further support innovative investment by smaller firms will be considered as part of Budget 2025;
xi. A Working Group will be established, with industry representatives, to accelerate the delivery of a FLOW (floating offshore wind) demonstrator site; and,
xii. The Government will hold an annual Summit with the National Competitiveness and Productivity Council in advance of the Budget each year.