Better value for the money being spent on public services and a new approach to managing major investments are a crucial part of building competitiveness in the economy, according to IBEC, the business lobby group.

In a new strategy document, it calls for borrowing of 6 per cent of Gross National Product to fund investment, but says it is essential that this money is used to deliver projects in a timely and cost-effective way.

IBEC's new document - A Business Vision for Ireland - is its blueprint for "Ireland to be one of the most competitive economies in the world by 2012".

Launching the document, IBEC's director general, Mr Turlough O'Sullivan, warns that unless corrective action is taken a reversal of much of the progress made over the past 10 years "could not be ruled out."

Business was "very worried about what has happened in this country over the past couple of years," according to Mr Michael Buckley, AIB chief executive and one of the senior business figures who worked on the document. The overall competitiveness goal "bundles together all the things that matter", he said at yesterday's launch.

A key issue was value for money, according to Mr Buckley, himself a former senior public servant.

The Government needed to stop taking the approach of "throwing money" at certain areas as a way of solving problems and must instead face the key management issues necessary to ensure better value for money.

The document sets four "operating conditions" for a competitive economy. These include:

A continued low tax regime and much greater emphasis on the outcomes and value for money from spending;

Environmental policy which involves a proper infrastructure, including incinerators and tackling planning delays;

A regulatory environment which needs to focus on creating competition and the removal of restrictive practices in sheltered sectors;

A corporate responsibility policy which means any European approach in this area should be voluntary and the adoption by business of comprehensive guidelines drawn up by IBEC.

The document also identifies six "drivers" of competitiveness. These are increased investment in research and development,appropriate investment in knowledge through education policies, encouraging entrepreneurship, developing the appropriate infrastructure, putting in place the necessary information and communications infrastructure and dealing with quality of life issues.

In terms of infrastructure, IBEC has come out in favour of borrowing to fund projects, providing, according to Mr Buckley, that "project management gets a hell of a lot better".

IBEC believes there is a need to increase the size of infrastructure projects put out for tender, to encourage more interest from international contractors and is calling for a mechanism to fast-track major projects