Advocates of the proposed £2 million sterling (€2.99 million) international business centre at the University of Ulster's Magee College believe it will help to promote Derry as a gateway to Europe for US firms.

The centre will be at the University's Aberfoyle site, forming part of Magee College Research Village. It will house the university's pioneering M.Sc in international business and will offer international development programmes for small firms in the North and in the Republic looking to raise their international profile.

It will also target inward investment for the north-west by offering rental space, or "incubator units", and services to businesses in North America, Australia - and Europe.

Training and education are seen as the key to the economic regeneration of Derry, a city where long-term unemployment in some areas is higher than 40 per cent. But many community workers believe the true figures are even higher.

Prof Fabian Monds, the provost of Magee College, and Dr Dolores O'Reilly believe the centre, due to open in February/March, will help to address this. It will be the focal point for international business teaching, research and partnership at Magee College, and several hundred jobs could be created as a result. "Derry - and Northern Ireland - is a soft entry to Europe for companies in America and we see reciprocation from young Northern Ireland companies which can get access links with the University of Massachusetts," said Dr O'Reilly.

The centre, to which the International Fund for Ireland will give £300,000 sterling, is important in several ways, said Prof Monds.

"The whole concept of the centre is a development for international business within the city of Derry and within the university. In that context of Derry and the university as a conduit, or a gateway, to Europe, we in the university decided to set up a school of international business centre which will house the school of international commerce currently operating from two sites at Coleraine and Magee," he added.

Links between Magee College and the US University of Massachusetts are well established, and Prof Monds is optimistic that future co-operation on training and investment with America, through the likes of the Derry Investment Initiative and other agencies, would greatly benefit the North and the South. More than 200 jobs have been promised for Derry after representations made in the US by the Derry Investment Initiative. The group lobbies for inward investment, promoting Derry as a gateway to Europe, to North America and other non-European firms.

Having "incubator units" for small and medium-sized companies from North America, Australia and New Zealand, as envisaged by the university, will obviously maximise opportunities for companies in both parts of the island and for graduates.

Dr O'Reilly said: "If you combine the education strengths of graduates at the university with services on offer at the centre to overseas and local businesses, these entities combined will have more impact in terms of attracting inward investment than companies coming over on a two-day trade mission."

Companies could "dip their toe in the water of the north-west" and get the support and services needed to identify what the area had to offer, she said. This would appear to be attractive, with Massport, the port authority for airports and ships in Massachusetts, and the Derry Investment Initiative expressing interest.

But Mr Conal McNeely, of the Northern Ireland Co-operative Development Agency, which supports community-led initiatives, is concerned that only a few will feel the benefits. "It is great that the university is creating this incubator project to attract inward investment from small to medium-sized overseas companies, which will create employment opportunities for graduates at the high-tech centre, but it will not address the issue of long-term unemployment," he said.

The Waterside, the Creggan and other areas of Derry were experiencing long-term unemployment of 50 to 60 per cent, he said. "help other sectors. Mr O'Doherty said the centre had created a new dynamism and contrary to popular perception, signalled the start of the city's regeneration.

But businessman Mr Garvan O'Doherty said that while the centre would not address the problem of long-term unemployment, it would help other sectors. Mr O'Doherty said the centre had created a new dynamism and contrary to popular perception, signalled the start of the city's regeneration.