The Minister for Enterprise, Trade and Employment has said increasing competition in the economy was a Government priority.
Micheál Martin was responding to a report that warned that strong consumer spending and increased construction work are masking the level of competitiveness of the economy.
Mr Martin also said a priority in third level education would be building on what he said was the significant progress made on investment in research and development.
The National Competitiveness Council, which seeks to strengthen the economy's performance, said that both spending and building activity are being fuelled by increasing levels of personal borrowings.
It argues that, in the long term, prosperity in Ireland will be dependent on export levels which have been slipping recently. The council also noted that price levels in Ireland are the second highest in Europe.
The report examines 170 indicators of economic performance and competitiveness and highlights many things which are good about the economy.
The Irish economy has grown more than twice as fast as the economy of the United States over the past ten years, and three times faster than the average for the Euro zone.
Enterprise
Ireland has the lowest corporate and personal taxes of 15 countries surveyed. It comes second in the European Union for entrepreneurial activity, with 193,000 adults in Ireland actively planning or in the process of establishing an enterprise.
Ireland also has the highest stock of foreign direct investment per capita among all the industrialised countries surveyed.
However, the report says there are still many issues that need to be addressed if current levels of prosperity are to be maintained.
Consumer prices in Ireland are among the highest in Europe, and pay costs are the fourth highest out of 14 countries surveyed.
The report also notes concern about the high level of borrowing in the Irish economy. Consumer borrowing was the equivalent of 78% of GNP in 1995; by 2004 it had risen to 163% and has risen sharply again over the past year.
While this is helping to drive economic growth through consumer spending and house building, the National Competitiveness Council warns that prosperity will ultimately be undermined if the competitiveness of Ireland’s export sector is not maintained.
