The announcement by US pharmaceutical company Hospira that it is to close its Donegal plant with the loss of 560 jobs demonstrates in microcosm the challenges facing the wider Irish economy in competing in a turbulent global marketplace.
In the first instance, the brunt of Hospira's decision will be borne by its employees who will be reassessing their future prospects and those of their families in an area where unemployment is already vastly above the national average.
Their shock at yesterday's developments was almost palpable and the impact will be evident in social as well as financial terms.
Donegal's reliance on manufacturing industry, much of it low-skilled, labour-intensive and traditional, has seen it lose thousands of jobs in recent years as industries closed or transferred to lower-cost locations. Hospira said it was moving the medical product manufacturing function carried out in Donegal to Costa Rica and the Dominican Republic in order to secure improved profitability through cost savings and operational efficiency. The decision will take effect in about 18 months and was attributed in part by the company to the high cost of manufacturing in Ireland.
Against the background of this sustained leakage of jobs, the political response to Hospira's announcement bore a certain familiarity. Employment Minister Micheál Martin said the full resources of the State's development agencies including the IDA, Enterprise Ireland and Fás were being mobilised to find alternative employment.
There is an inevitable ebb and flow of jobs within all economies and Ireland has seen a remarkable transformation in its employment base over the past two decades. There has been much positive change as the economy developed an employment profile characterised by higher skills and productivity, advanced technology and high end research and innovation. This was underpinned, in turn, by a young educated workforce and low taxation.
The challenge now is to sustain this success. Our's is no longer a low wage economy and, as the social partners prepare for negotiations on a new national wage agreement, it is evident that our future competitiveness will be dependent on a combination of factors. These include greater productivity, ever enhancing skills and excellence in research and development. In this light, it is crucial that we provide sufficient numbers of our young people with the capacity to prosper in a knowledge-based environment. The high failure rate in mathematics and science in last week's Leaving Certificate results delivers just as salient a message in this context as yesterday's bad news in Donegal.