Indigenous Irish businesses supported by Enterprise Ireland achieved more than £18 billion in sales in 1998, a 10 per cent increase on the previous year, according to the new State agency's end-of-year statement. The agency, which had a £120 million annual budget, was formed last July in a merger of Forbairt, An Bord Trachtala and the industrial training section of FAS. It has about 1,000 employees.

Reflecting the input of An Bord Trachtala, export sales for companies are estimated to be worth £8.1 billion, or 43 per cent of total sales.

"The majority of new start-up companies pursue export strategies from their establishment. This is particularly evident in the high technology sectors and is due to the increasing globalisation of business," Enterprise Ireland stated in its report. The number of new jobs created in companies backed by Enterprise Ireland, at 12,500, is less than the record 14,000 created in 1997. The net increase in employment - when job losses are taken into account - was 4,200, less than 1997's total of 5,336.

But the Enterprise Ireland chief executive, Mr Dan Flinter, said the figure would have been about the same as 1997's but for the impact of the merger of Avonmore Foods and Waterford Foods and other rationalisation in the dairy sector. Total jobs in client companies rose to 133,515. He pointed to "very serious growth" taking place in the export of Irish software products to the US. Information technology projects are expected to grow from £210 million in 1998 to more than £1 billion in 2001. He said indigenous Irish companies in general had to achieve greater economies of scale. "There is a vital requirement for Ireland to see the emergence over the next five years of a large number of medium-sized firms and also large-scale companies," he said.

He added that a new problem facing development agencies was that of assisting companies in sourcing skilled personnel from abroad, particularly in the information technology sector. The challenge for companies facing a more restricted labour supply, he said, was to increase sales through improved efficiencies.

He also pointed to the high multiplier effect of revenues generated by Irish companies, saying that 80 per cent of total sales returned to the economy in direct expenditure on wages and purchases of raw material and services, "probably twice what it is for the overseas sector".

Client companies made investment commitments worth more than £450 million in 1998, similar to 1997. Enterprise Ireland contributed a further £97 million in supporting technology programmes, buying equity and providing loans and grants to 190 investment projects, including 95 start-ups.

The emergence of the euro, Mr Flinter added, would be of "huge strategic value" to client companies "particularly if Britain were to join the euro zone". "If that were to happen, what it would mean is that, for Irish companies, the markets into which they would sell in excess of 80 per cent of their sales would be in a situation of no currency risk and no currency fluctuation."