Net Results: This week the Tánaiste and Minister for Enterprise, Trade and Employment, Mary Harney, announced plans for a new group to study how best to improve, or at least maintain, the State's business competitiveness, writes Karlin Lillington.

Whether another committee is what's needed is a topic that has already been discussed elsewhere. But the questions the committee is supposed to examine come none too soon, and should have been formally pondered - and more crucially, acted upon - long since.

At the top of the list must be the way in which the State itself encourages inward investment, supports indigenous companies, markets the State and structures its inward investment strategy.

The State's near-loss of a significant project from internet auction giant eBay - the phenomenally successful Silicon Valley company whose market capitalisation of $36.5 billion (€32 billion) makes it one of the five largest companies in the Valley - is not just a warning bell of immense proportions. It must be heard as the death knell to outmoded approaches which threaten to sink the Republic's aspirations as a technology industry location of importance.

According to a key source, eBay, which wanted to put a 100-120 person operation into Dublin (and specifically, the Digital Hub development in the Liberties), was driven nearly to distraction - and nearly, elsewhere - by IDA Ireland's, and more significantly, Ms Harney's, insistence that the investment go to the regions.

EBay didn't want to go to the regions. It is understood to have made that abundantly clear. Nonetheless they were packed off to go look at regional sites. They nearly pulled out entirely.

Now, the company is understood to have made a decision to establish the operation in Dublin, whether grants are in the offing or not.

Comments from the IDA, which confirmed last weekend that discussions remained underway and emphasised that accommodation could be made if an investment were especially attractive for "Ireland Inc", seem to indicate reconciliation and the prospects of some grant money after all.

But why is the State risking extremely high-profile investments in this way over a regional investment strategy that, as IDA chief executive Sean Dorgan himself told the Oireachtas early in July, has serious difficulties?

Mr Dorgan testified that small provincial towns will struggle to win investments, and that even the larger "gateway" towns identified as part of regional investment strategy will be unable to compete with Dublin as the location of choice for multinationals, much of the time.

The Republic's ability to move investment into the regions has been fatally undermined by two failures that should have been addressed in the 1990s boom years: lack of an adequate roads infrastructure and lack of broadband internet infrastructure.

These issues could have been nailed in time to counter any economic swing downwards, but of course they weren't, and of course, now we are in the economic doldrums, trying to compete with the countries - many in the already-competitive regions of Asia and Eastern Europe - that invested massively in precisely these areas.

This must be recognised. The State also needs to acknowledge, in the wake of dithering over eBay, that certain types of companies will not want to be based outside a major urban centre. It is utterly pointless to torture them with the insistence that they become part of the Government's solution for its own failure to make the regions more attractive when its coffers were overflowing and it had the strength in the Dáil to reform the agencies and processes that have hobbled the State's development for decades.

The people whose job it is to sell the State abroad work hard to win the interest of multinationals like Google and eBay. But then, all the groundwork to get those companies over here and talking seems to run into the wall of resistance that is the ingrained bureaucracy produced by the policy wonks.

The State's well-established allure to multinationals hardly needs to be sold by the IDA anyway. As a well-informed US-based observer said to me recently, no US technology company will fail to look at the Republic as a serious contender for its investments.

But we need to be a lot more nimble and flexible than we have been. We need to overhaul sclerotic agencies like the IDA and Enterprise Ireland, which have many excellent people but a bureaucracy that is smothering their effectiveness.

And we need investment in infrastructure that we still seem only to put in place in delayed, piecemeal fashion.

klillington@irish-times.ie Karlin's tech weblog: http://weblog.techno-culture.com