THE STATE should not turn away from efforts to attract medium- to high-grade manufacturing businesses, the chief executive of Shannon Development said yesterday.

Dr Vincent Cunnane said manufacturing operations continued to serve the State well.

While the most desired jobs would in future be in the “knowledge economy”, it would be a mistake to assume all manufacturing would inevitably move to cheaper labour markets, he said.

There was also a likelihood that “full cost factors” in low-wage economies such as China may come into play in the future, forcing global manufacturers to consider issues such as carbon costs of long-distance air-freight, sustainability of manufacturing processes, working conditions, as well as environmental impact.

Ireland had developed a good reputation as a reliable place for manufacturing, said Dr Cunnane, and would continue to attract high quality work such as medical device manufacturing and aircraft maintenance. This would be helped, he said, by having security of energy supplies – such as the liquid natural gas project in the Shannon Estuary – and “ticking all the boxes” in terms of environmental sustainability, quality product, sustainable employment and “next generation” communications.

Dr Cunnane said a new master plan for the Shannon Free Zone, which would see some of the older warehousing units being replaced by office accommodation for internationally traded services, was being implemented.

There was every reason to hope that it would be Irish-based businesses outsourcing the less skilled elements in future, while higher grade manufacturing or research and development remained in Ireland, said Dr Cunnane. He pointed out that Dell was retaining much of the knowledge end of its business in Limerick.