Castlerea in Co Roscommon was the location chosen by New York-based Harmac Medical Products when it decided to make its first move out of the US last summer. Some 60 people are now employed, recruitment is ongoing for 10 more positions and staff numbers are expected to rise to more than 100.

General manager, Mr Mick McEnroe, says the west of Ireland location has proven more of an advantage than a disadvantage. A contract manufacturer, Harmac is now within easy reach of major customers such as Abbott and Baxter Ireland, other foreignowned companies with bases in Sligo and Castlebar. It also supplies European customers from the Castlerea plant.

The availability of an IDA advance factory with a clean-room facility was a major factor in Harmac's decision. Mr McEnroe, who returned to the Republic after five years working in Canada, says the US executives were impressed with the fast set-up time. A suitable workforce was also an important factor. Between 20 and 30 per cent of employees are graduates, and many including Mr McEnroe, are former students of plastics at Athlone Institute of Technology.

"In our business generally, it is not really important to be located in a major urban centre. In fact it is proving to be an advantage to be in the west because we have an abundance of employees to choose from," he says.

When the Castlerea project was first announced, more than 500 job applications were received in the first two weeks. A recent advertisement for a quality engineer attracted 15 responses from people who had both the necessary qualifications and relevant experience.

In the company's experience there is no shortage of people who want to come back to the area to work, many from cities like Dublin and Galway. Among the semi-skilled employees are former textile workers, and most people travel from within a 20-minute radius. "People are also very appreciative of the work, and they work very hard," says Mr McEnroe.

Prospective investors visiting the west are often brought to Harmac by the IDA. The experience of the company to date proves the point made by western lobby groups that towns like Castlerea can accommodate medium-size foreign investment projects. Some 100 new jobs in a town with a population of about 1,800 can make the difference between vibrancy or decline.

In its assessment of potential growth centres in the seven western counties, the State agency the Western Development Commission (WDC) identified Castlerea among a list of secondary investment locations.

Others in the north-west include Donegal town, Ballyshannon, Manorhamilton, Ballymote and Tobercurry. The "first tier centres" were Sligo, Letterkenny, Buncrana, Carrickon-Shannon and Roscommon and five more in counties Mayo, Galway and Clare.

A WDC report calling for more foreign direct investment in the west highlighted what these towns had to offer to investors. In the north-west, Sligo came out best having practically all of the criteria sought by investors including a third-level college, national road, rail access, an airport, ISDN and broadband telecommunications, an advance building development site and a good sized workforce.

Adequate sewerage was a problem in both Sligo and Letterkenny, which also lacks rail access, but had all the other criteria. As smaller-sized towns, Roscommon and Carrick-on-Shannon had most of the criteria, while Buncrana had the advantage of its proximity to Derry airport, an advance building and development site, and an available workforce.

As towns in the Objective 1 or Border, Midland and Western Region, the level of state aid allowed under EU rules can be as high as 40 per cent, plus up to 15 per cent for SMEs. This is double that permitted for companies locating in the east, south and south-west while in Dublin and its environs, state aid permitted is lower again.

Extra incentives are also available to investors in Leitrim, Longford, and parts of Roscommon and Sligo under the rural renewal tax scheme.

Mr Frank Conlon, the IDA's area director for the Border region, says it is "satisfied with progress to date" on the agency's new strategy of attracting foreign investment to the regions. There has been a "strong flow of potential clients" to centres such as Letterkenny and Sligo and a number of return visits.

Both Letterkenny and Sligo have an advance office building and factory either under construction or near completion, and planning permission has been lodged for an advance factory in Carrick-on-Shannon.

The development of the Institutes of Technology in Sligo and Letterkenny is crucial, Mr Conlon, says in attracting industry. The recent arrival of Pacificare in Letterkenny was influenced by the proximity of the college.

Pacificare has also had no problem recruiting staff, receiving 336 applications in just five days for 50 claims-processing jobs. There were 186 applicants for six senior/middle management posts.

Mr Brendan McGinty of IBEC in the north-west says the development of Letterkenny and Sligo as growth centres under the planned National Spatial Strategy is now practically assured. Access to the port of Larne and Belfast airport, he says, are important factors in Letterkenny's favour. Scheduled flights from Derry to London have also helped, as have cultural developments in the town such as the opening of the impressive new An Grianan theatre.

However, there are a number of outstanding issues in the north-west acting as a deterrent to investors. In electricity supply, the northern-most point of a 220kv line is in Flagford, Co Roscommon, although the ESB hopes to have a 220kv station in Sligo by 2003.

In Sligo town, the failure to resolve the inner-relief road/bypass debate as traffic problems increase, is a problem. The lack of priority given to the Letterkenny/Dublin road link is also regretted by Mr McGinty.

He says that to ensure the delivery of growth centres in the long term, it is important to earmark adequate land banks for industrial use. The report of the Donegal Task Force identified the need for at least 100 acres on the Letterkenny/Derry corridor, for example.

Having an available, educated workforce will be a key factor in attracting investors and in the future development of towns. Bringing in investors is crucial in rectifying a situation where there is a very low productive base, but bringing back graduates who could start their own businesses is also important.

The chief executive of the Western Development Commission, Mr Liam Scollan, says one problem up until now has been the "mismatch" between human resources policy and economic and business development policies.

The expansion of towns, he says, depends not just on educating workers but also on attracting back potential employees who have been leaving the region, many as third-level graduates, in their thousands since the 1970s.

"Of the 6,600 third-level graduates this year in the seven western counties, less than one third are likely to find employment in the region," Mr Scollan says. Families in the west who have invested in their children's education over recent decades should be able to reap the rewards by seeing them get jobs and contribute to the economy locally, he adds.

The WDC is working with the third-level colleges with the aim of forging closer links with business and the local community. An analysis of human resources availability is to be carried out in the new year by examining lists of graduates from the colleges.

Mr Scollan says the third-level institutions need to adapt to better suit the needs of industry by providing short courses. He says that when considering human resources in the seven western counties, it should be borne in mind that there are still 40,000 people on the live registrar and 10,000 more in employment schemes, in addition to many women who may want to rejoin the workforce.

Next week: Ballina, Castlebar/ Westport, Tuam, Ballinasloe and Ennis/Shannon - what they offer investors.