Creation of growth centres is vital for the regions

The ESRI's review is upbeat about the prospects for regional development. It has come out firmly in favour of the development of strategic growth centres outside Dublin - but it warns that chosen locations must be made attractive to a potential workforce or the scheme will not work.

Whereas people would once travel anywhere to find available work, the ESRI says industry now travels to find available skilled labour.

It credits much of the recent economic boom with the fact that the State has had a highly skilled labour force in abundance.

The ESRI says that worker expectations for quality of life have risen to exacting standards - standards which are being met elsewhere and which will have to be matched if a workforce is to be lured to a regional centre in Ireland.

"Today they [the workers] are not interested in the type of industrial jobs which were created in the 1970s," comments the ESRI. "They want - and are getting - employment that uses their skills in the high technology manufacturing sector or increasingly in the traded or non-traded services sector."

Today's entrants to the job market are likely to devote a much higher proportion of their incomes to items such as leisure services, holidays and eating out. One of the reasons advanced to explain the economic growth of Galway for example, which reached almost twice the national average in recent years, is the fact that it is perceived as enjoying a good quality of life.

Highly mobile workers will choose to live where there are good services and amenities. The report notes that because many of the workforce have spent time abroad studying, working during student days or gaining experience in the job market, they are well informed about the possibilities open to them.

They want to be able to travel to work easily, to have a range of leisure activities to enjoy in the evenings and to have a safe, clean environment in which to raise children.

In this respect the review concludes that "regional policy will have to concentrate more on making chosen locations attractive to new labour market entrants than was the case in the past". Whereas in the past local authorities zoned land to facilitate industrial development, the ESRI says it is now time that this is widened so that "attention be given to the social, cultural and recreational infrastructure as part of a package of regional policy measures".

Other infrastructural measures such as water and drainage, roads and rail transport should be delivered in the regions to increase the supply and reduce the cost of housing. In luring the labour market this "should form an important instruments of regional policy", notes the review.

This approach - the creation of growth nodes, described as "the nodal approach" - has already been proposed by the regional authorities and recommended by the Fitzpatick Report as the best method of spreading the boom to the regions.

Towns and cities that have been put forward by various bodies include Athlone, which would have the benefit of counter-balancing the commuter drift to Dublin from the midlands; and Sligo, Tralee and Castlebar to maintain population and promote prosperity in the western regions. Other centres include Limerick, Cork, Waterford and Dundalk. In the north-west, Derry/Letterkenny has been put forward as the natural centre.

As the review points out, the development of these nodes does not have to be at the expense of Dublin, and it acknowledges that any major policy of "social engineering" by the State to direct growth to particular locations would probably be unacceptable to those being "directed". In short, the ESRI argues that the "carrot" rather than the "stick" approach should be used - making locations in specified regions attractive, rather than making life unpleasant in the regions that are already prosperous.

In terms of the type of industry which is envisaged as locating in the growth centres, the review notes that the "contraction of the traditional manufacturing sector employing unskilled or semi-skilled labour drawn from the locality is likely to continue".

The inflow of foreign direct employment will remain substantial but will be much less than the dramatic growth of the 1990s. The greatest growth is expected to come from indigenous businesses which are expanding.

These indigenous business are expected to employ skilled labour. The indications are that the skills they will require are in the areas of information technology, human resources, finance, accounting, marketing and so on. Because these are high-value skills, the report concludes that "over the next five years the living standards in all regions will significantly improve compared to those of the EU average, continuing the process of the 1990s".