National Economic Strategies Must Address Employment Challenges of Areas Beyond Large Cities – WDC

Concerted action will be required if the Western Region, particularly the more rural northern part, is to participate in the move towards a ‘smart economy’. If this does not happen, the regional development gains of the past decade could be lost and the gap between the east and west of the country could widen even further with the Western Region less able to contribute to national growth.

That’s according to a new report from the Western Development Commission (WDC). The report Work in the West: The Western Region’s Employment & Unemployment Challenge examines the current employment and unemployment situation in the Western Region, analyses the resulting key challenges and makes recommendations on what needs to be done to position the region for future growth.

Lisa McAllister, Chief Executive of the WDC said: “Current economic and regional policy is tending to increasingly focus on the role and potential of the larger cities and this focus stems from the perception that balanced regional development is a redistribution of national resources, rather than regional development itself being recognised as an integral element of national growth.”

The report found that between 2000 and 2009, the strongest employment growth in the region was experienced in the construction, retail and wholesale, and public services sectors. The unemployment rate has more than doubled in the Western Region from 5.0% (Q1 2008) to 10.8% (Q1 2009) in the course of a year. The structure of employment in the region has also changed over the past ten years with employment in urban areas performing more strongly than in rural areas.

During the boom years, in addition to expanding employment, there were considerable improvements in the education level of the region’s workforce with the share of the population with a third level qualification rising from 18.9% to 28.2% (2002-2008). The report states that the region now has a stronger human resource base to drive economic growth.

Ms McAllister added that the report found that in general, the region (in particular north of Galway city) is not as well placed in the move towards an increasingly knowledge-based or ‘smart economy’ as it has a higher share of its employment in sectors which tend to be lower skilled, lower value-added and more vulnerable to the recession and lower shares working in the higher skilled and high value-added sectors (e.g. financial services, information and communications services) than the rest of the state.

She said that the Western Region’s future growth is not only critical for the region itself but for the country as a whole. “The risk of not developing the Western Region’s economy could mean that the region would depend on transfers from the rest of the country for its economic and social sustainability. However, a vibrant and thriving regional economy will contribute to national recovery.”

Ms McAllister added: “National growth and regional development are not an either/or choice. If regions are not facilitated to grow they may suffer higher and longer term unemployment and create very significant difficulties for the people and communities directly affected.”

The report recommends building on the region’s strengths and assets and identifies eight sectors which have future growth potential in the Western Region. They are: Medical devices; Software, financial and international services; Creative sector; Green economy; Caring sector; Food; Tourism and the Marine sector. The WDC says that the eight sectors represent a mix of knowledge sectors, sectors which are a direct response to changing needs and priorities within the region, and sectors based on natural resources.

Author of the report Pauline White of the WDC said that policies and actions aimed at growing these sectors should be developed. “Actions including enterprise support and access to finance, for both exporting and locally-trading businesses, strengthening the region’s research and innovation capacity, focusing particularly on innovation by micro-enterprises and small and medium-sized enterprises (SMEs), and investing in further infrastructure improvements are needed to underpin business growth in the region,” she added.

The report identifies three key employment challenges currently facing the Western Region: adjusting to the decline in construction employment; the possible return of the brain drain; and the delivery of education and training in the region.

It says that at the peak of the building boom in 2007, 1 in 4 men in the Western Region worked in construction, a higher share than in the rest of the state. Since then a third of the region’s construction workforce (16,400 people) have lost their jobs. This has led to very substantial increases in unemployment among men in the region, especially in more rural counties. A particular issue for the region is the number of young men with relatively low education levels who are becoming unemployed, mainly from construction. She said that this presents an immediate challenge for the region both economically and socially and a coherent strategy for the retraining of construction workers is urgently required.

Ms White said that the Western Region has a long legacy of out-migration with movements to the east of the country and overseas. “The challenge facing the region now is preventing the human resource gains of the past decade from being lost during the recession. Anecdotal evidence indicates that the level of emigration is rising and this seems to be particularly the case for new graduates, recent immigrants and construction workers, including professionals. A particular concern is that as the recession continues, more highly skilled and experienced employees, as well as new graduates, may choose to emigrate as they will be unwilling to remain in the region in unemployment,” she said.

The report recommends that the current education and training system be revised in order to meet the needs of both job seekers and those currently employed. It also recommends that training and education need to be flexible to recognise and respond to differing regional and local circumstances.

Ms McAllister said: “We believe that it is critical that strategies to position Ireland’s regions for the future recognise the importance of widespread economic growth, including in the rural economy. Otherwise we will experience a situation where a high proportion of people live and work in smaller towns and rural areas, but where job creation strategies concentrate on gateways and hubs. This could lead to a situation of unsustainable and undesirable commuting patterns or even a return to rural depopulation and a shrinking of the region’s labour force. Enterprise support strategies for locally-trading micro-enterprises in rural areas must be considered given their role in job creation,” she said.

Ms McAllister concluded; “The Western Region has the potential to contribute to national economic recovery and we call on policy makers to ensure that national economic strategies address the needs of the region and capitalise on its strengths to deliver balanced economic recovery for all regions.”

The Executive  Summary and Recommendations of Work in the West can be downloaded here.

Ends

For further information please contact:
Lisa McAllister, Western Development Commission, 086 771 9969
or Pauline White, Western Development Commission, 086 832 8055

Media contact:
Bernadette Mullarkey, Bane Mullarkey, 086 806 2540