More than 6,300 jobs have been announced by IDA Ireland since last September, but the agency warned yesterday it was finding it increasingly difficult to attract investment to the regions.
Just seven of the 20 IDA projects announced this year are based outside Dublin or Cork, suggesting the Government will fail to meet its target of locating half of all new investments in areas with EU objective one status.
Objective one status is supposed to help the EU's poorer regions catch up with wealthier regions.
For the period between 2000-2006, the Border, Midland and Western (BMW) region qualified outright for objective one funding worth €1.3 billion.
But the IDA's annual report for 2002 shows that the West and Mid-West regions, despite their objective one status, were the worst-performing regions in terms of IDA jobs lost in 2002.
Total employment at IDA-supported firms in the West fell 9.6 per cent to 11,638 last year, while employment in the Mid-West region fell 13.6 per cent to 11,874.
In contrast, the East region, which includes Dublin, benefited from a 0.4 per cent rise in IDA-supported jobs during 2002.
A spokesman for the Tánaiste said yesterday the Government remained committed to its target and would work with other agencies to ensure it was delivered.
But IDA chief executive, Mr Sean Dorgan, said that infrastructure deficits and a relative easing of the pressure on the Dublin area were causing more firms to invest in the capital rather than consider relocating to regions.
In an interview with The Irish Times, Mr Dorgan said this was particularly worrying because at the end of 2006 the IDA may not be in a position to offer grant aid to encourage investment in regional locations.
"We don't know how Ireland will be reclassified under EU state aid rules after 2006," said Mr Dorgan. "But we can be reasonably sure that due to our success the scope for granting aid will be severely restricted."
Without the scope to offer firms aid to invest in certain locations, regional areas would have to compete on merit, he said.
Mr Dorgan said it was essential that progress was achieved in developing infrastructure and services in regional locations over the next three years to help bridge the gap with Dublin.
He said the increasing IDA focus on bringing higher-value jobs to the Republic was also increasing the tendency of companies to choose urban locations.
"Companies creating higher-value jobs tend to be attracted to universities, leisure facilities and areas with a depth of business activity," said Mr Dorgan.
But despite this warning by the IDA about the need to improve the competitiveness of regional areas, the agency said it was cautiously optimistic about 2003.
A stream of 36 IDA-supported projects, amounting to a total of 6,300 jobs, have been announced since last September.
These include high-profile investments by the technology firms Google and Overture, and Pfizer and Gerard Laboratories in the pharmaceutical sectors, said the IDA.
More than two-thirds of all jobs created by the IDA supported projects will be for graduates of third-level institutions. Four out of every 10 jobs will be in salary scales above the IDA's own high skills guidelines which are for €37,000 per year.
Some 11,740 jobs were created by the IDA during 2002, a slight fall on the 13,282 created in 2001.
On the job-loss front, 14,900 IDA-supported jobs were lost in 2002, compared to 17,800 in the previous year. Total employment at IDA-supported firms is 133,246.
Almost half of IDA client companies, or some 507 firms, are US corporations. The vast majority of other investors are European.
