Last Thursday at the launch of the Education Technology Investment Fund in Dublin Castle, it was as if third-level education had won the Lotto. The Government's announcement of a £250 million investment fund for technology education and training created a mood of euphoria among third-level educators, public servants and industrialists.

This investment is absolutely vital, Bob Perlman, founding vice president of Intel told E&L. "A pre-condition of any investment is the ability to have a trained, skilled workforce," said the man credited with having brought Intel to Ireland. UL's Dr Ed Walsh called it "an historic occasion. For years we've been advocating a partnership between education and the enterprise sector. It's highly significant that education is now being seen as fundamental to the success of enterprise."

Sean MacDonagh, director of Dundalk RTC and chairman of the Council of Directors of the Technological Sector Institutions, anticipated a new era in the technology sector. The former RTC/DIT sector is set to get the lion's share of the £250 million. Education must refocus, he said. "Traditionally education has been organised to facilitate children going to school and on to third level. We have to have a radical rethink of this. People aged between 22 and 65 years must be able to come back to college. We now need new forms of credits and financial support for full-time students. We can't survive economically and become a world player unless we address this issue."

The Conference of Heads of Irish Universities has stated that it "welcomes the major investment in Irish universities."

But is this all a bit premature? Not one mention was made of universities in the speech by the Minister for Education and Science, Micheal Martin, when he launched the fund. "We want to renew and modernise the infrastructure of third-level institutions," he said, "particularly in the technological sector. We want to guarantee that they will continue to produce high-quality graduates."

TCD's provost, Dr Tom Mitchell, counters: "I have a lot of questions and some anxieties about what the fund means for the universities."

It looks as if the RTC/DIT sector will pick up a minimum of £120 million and will also benefit from other allocations. The former RTC/DIT sector is set to receive £80 million in capital investment and will also be the largest recipient of the £20 million allocation to hotel and tourism training. It will also get the apprenticeship part of the £20 million allocation to PLC courses and apprenticeships.

The Department has confirmed that the £60 million which has just been announced for computer software training includes the £40 million which was agreed upon in the summer in order to produce 1,000 extra computer software graduates each year. The outstanding £20 million is to be shared between the universities and the technological sector.

It's also understood that the technology sector will get some of the money allocated to third-level equipment renewal grants and the £15 million that is going to R&D technology transfer.

Mitchell has a further caveat. A major concern, he says, is that the technology skills shortage is being addressed only in the area of computer software. "A great number of our multi-nationals have no interest in computer software. They want people in a range of disciplines including microelectronics, physical chemistry, materials science and maths." Because of skills shortages in these areas companies are having to pay starting salaries of £18,000 to "raw graduates", which will make Ireland highly uncompetitive, he warns.

"My worry," comments John Donovan, secretary of the Irish Research Scientists Association, "is that we are saying that computers are the only area of technology that we are interested in. There are lots of other technologies out there that depend on scientifically literate students coming through." These areas are being overlooked, he says.

There is concern too in some quarters that the £30 million equipment renewal grant may be insufficient to meet demands. "Both the STIAC and the HEA report on research stated that the equipment deficit in the universities was £50 million," notes Mitchell. "Even if it all goes to the universities, it's still far less than the experts say is needed. The universities will need the whole £30 million to make any impact."

Donovan argues: "A £30 million one-off injection is not enough. We need a rolling programme going on year after year to bring us up to date."

The £15 million for R&D technology transfer is welcome and will give encouragement to the universities to develop innovative technology transfer capabilities, Mitchell says. However, the amount is inadequate. Long-term economic viability depends on the ability to develop indigenous high-tech industries. R&D is the essential element in this and greater resources are vital, he says.

If the £15 million is split between the seven universities over three years, you're talking about £500,000 per college per year, Donovan calculates. To get one high-tech campus company off the ground could easily cost £500,000, he says.

A further problem is that no money has been allocated to basic or strategic research. "It doesn't address the fact that our basic and strategic research levels are among the lowest in the OECD," comments Mitchell.

The technology investment fund has been set up so that companies can make contributions to the fund. Tanaiste Mary Harney is adamant that the multi-nationals are keen to contribute. However, Mitchell believes that it's naive to make a general plea to industry for funds.

"In my experience as a fundraiser," he says, "I've found that companies and individuals give to projects only for specific purposes. They won't pay into a fund unless they know precisely where the money is going. They want to spend money where they can see an assured benefit to them."

Tensions between the university and the third-level technology sector could arise in the future when colleges begin to compete for funds. "We see ourselves benefiting from all of the strands in the education technology investment fund," says Joe McGarry, secretary to the Council of Directors of the Technological Sector Institutions.

Privately some third-level educators are expressing concern that the skills shortage has resulted in a dearth of computer teaching staff and recruitment is set to become a major headache in the future as more new courses are introduced.

There's cynicism too that that the £25 million trumpeted for computers in schools - it will amount to £50 million when teacher training costs are inserted - includes money that was allocated by the then Minister for Education, Niamh Bhreathnach, last April.

Despite the reservations, however, educators stress that a Rubicon has been crossed. "The Government has explicitly recognised that investment in education is part of the economic future of the country," says UCC's president Dr Michael Mortell. "The investment fund represents a significant change of mind-set in Government."