More than a quarter of the £40.5 billion to be invested under the National Development Plan will go towards developing the economic potential of the labour force.
The Minister for Finance, Mr McCreevy, said at the launch of the plan yesterday that the aim of the £11 billion investment programme was to make people "more employable" and "address emerging skill shortages in the economy".
This means that for the first time in the history of the State more will be spent on training and personal development than on job creation grants to industry, agriculture, tourism, forestry and fisheries combined. The report predicts that Foreign Direct Investment (FDI) for job creation, particularly from the US, will fall. "As a result of the reduction in the pool of available labour and an increase in Irish wage rates, maintaining this level of FDI will present a challenge. In overall terms, some slowdown in private investment from the very rapid levels of recent years can be expected," the report states.
The same section of the report on "labour market developments" says the labour force will grow by an average of 2 per cent per year over the life of the new national plan, compared with 3 per cent a year during the life of the current plan.
For these reasons, the emphasis in national planning has switched from job creation to enhancing the productivity of those already at work, to sustain strong economic growth.
Productivity grew by 3 per cent per annum during the 1990s and the plan predicts this rate of growth can be sustained through the new investment programme.
A combination of 2 per cent growth in employment and 3 per cent in productivity will see GNP rise by 5 per cent a year up to 2006, or more than double that projected for the EU as a whole.
Over the same period, unemployment should fall below 5 per cent and one of the priorities of the new plan is to target the long-term unemployed. Over £1.7 billion will be spent on measures to help them, of which £1.2 billion will be spent in the southern and eastern region, reflecting its larger urban unemployment blackspots, and £515 million in the border, midland and west region.
There will be £250 million available for childcare in the plan. This is to promote "gender mainstreaming in pursuit of the objective of reconciling family and working life and facilitating access for women to education, training and employment".
Some £5.9 billion will be spent on enhancing the "employability" of workers and another £6 billion on promoting "adaptability". A further £500 million will be spent on promoting entrepreneurship.
Defending the relatively small allocation for childcare facilities, the Taoiseach, Mr Ahern, at the launch of the plan yesterday, accepted the Government had had "a long learning curve" in this area.
He said the problem would have to be met through a multifaceted approach that would also include significant tax reforms. However, he said £250 million represented a "substantial chunk of money".
Mr Ahern expressed confidence that the overall package in the national plan "provides a platform for the continuation of social partnership".
He said the record of the 1989 plan in establishing financial stability, and that of the 1993 plan in tackling unemployment, showed the Government and the other social partners could deliver when they acted together.