IDA Ireland finds it difficult to attract industry to Co Donegal because of access, the Northern troubles, sub-supplier capacity and low density of population, according to the agency.
In a document prepared in relation to the county's largest employer, Fruit of the Loom, for the Tanaiste, Ms Harney, and released following a Freedom of Information request, the IDA states that Co Donegal is a "priority location for new inward investment".
However, "despite our efforts, few companies have chosen to locate in the North West region. It is the investor who decides the location, not IDA Ireland."
"Our experience of dealing with clients who have located elsewhere has shown us that poor access by air and road, Northern troubles, limited sub supplier capacity and small urban structure have made the region unattractive in comparison with other locations.
"We have been endeavouring over the years to deal with these issues. Improvements have been made in infrastructures such as the road network, but much still has to be done. We will be continuing our efforts in working with the private sector, Donegal Co Council, Letterkenny Institute of Technology, and others in improving the attractiveness of the county".
The comments are contained in a briefing note prepared earlier this year when it was thought a number of redundancies might be announced by Fruit of the Loom which employs 2,500 people in Donegal. The company is now committed to maintaining the jobs to the end of the year at least.
IDA Ireland believes that any replacement industry which might be found to replace Fruit of the Loom jobs on the Inishowen peninsula, is likely to be situated in the major Donegal towns, such as Letterkenny.
In promoting Co Donegal, IDA Ireland takes a cross-Border view, pointing out that the port at Larne, Co Antrim, can be used for imports/exports, and that links can be formed with universities in Northern Ireland.
According to the briefing note, measures which have been introduced for marketing regional locations such as Donegal include higher grant levels, improved marketing material and the targeting of companies suitable to regional locations, "i.e. small German-owned companies".
Job losses in the clothing and textile sectors are increasing in Ireland and throughout Western Europe as companies move to lower cost locations in order to remain competitive. Fruit of the Loom has a major t-shirt operation in Morocco servicing the European market.
