IDA Ireland has reduced its target for new jobs it wants to support this year to 12,000, about a third less than 1999 when it assisted in the creation of 18,079 new positions.

Reflecting declining unemployment in the State, this is the first time the authority has reduced its job creation targets.

At a briefing yesterday, the authority's chief executive, Mr Sean Dorgan, said its focus was no longer on the number of new jobs it wanted to help create, but on the quality of those positions and their location. The IDA was now modelling itself as an economic development agency with a particular interest in regional aid and e-business. Its performance would be measured in income and wealth terms, he said.

But the authority's outgoing chairman, Mr Denis Hanrahan, said limits on road, electricity and telecommunications infrastructures in the Objective One regions meant that spreading inward investment from the east of the State was not proving easy.

"We need to reach some rational conclusions on how we balance economic growth and development against the need for infrastructural change in areas such as electricity distribution, the provision of mobile telephony and the development of roads and waste disposal facilities."

Local disputes about such issues caused inordinate delays in making improvements, he said.

While Mr Dorgan said certain companies had expressed preference to invest near Dublin, he was confident that the IDA would secure three major projects in the regions this year.

He welcomed the Government's commitment in the National Development Plan to enhance the State's road infrastructure in the next seven years, but said the IDA wanted immediate improvements. Nevertheless, the authority was confident that it could meet its target of basing half of all jobs created in the such regions.

The body paid some £129.3 million in grants to foreign companies last year. Its largest payment, of more than £21.5 million, was to US IT firm IBM, which has developed a software and technical services campus at Mulhuddart, north Dublin.

The IDA assisted in the creation of 16,277 "first time" positions last year and 18,079 new jobs overall. Central Statistics Office figures suggest that 72,000 more people were working at the end of last year than in 1998, so IDA jobs represent about a quarter of positions created.

But some 9,392 IDA positions were lost last year. The losses were in the textile industry mostly - at the Fruit of Loom plant in Co Donegal, for example - and other "low end" sectors. While this was the greatest number of jobs lost in a single year, Mr Dorgan said that indications for this year suggests that this was easing.

Mr Dorgan rejected suggestions that companies would decide not to invest in the State because of the shortage of skilled workers, claiming that labour market tightening was no worse than in other developed economies. "Investors are voting with their feet. Nobody else is moving as quickly as Ireland in the skills area."

The IDA wanted to develop Ireland as a world and European hub for e-business, Mr Dorgan said. E-business, he added, embraced a larger canvass than e-commerce, which was focused on business-to-consumer Internet-based transactions.

Yet, while the Global Crossing fibre optic link with Europe - which will be operational next month - was an especially significant development for hightech firms, Mr Hanrahan said the pace of change in the sector had not been experienced before. There was an "urgent need" to increase web-design and e-business training, he added.

Mr Dorgan said an e-business environment would be established in three phases. The provision of abundant, state-of-the-art telecoms was the first. The second was to develop the supporting infrastructure framework - such as Internet service networks - to support e-business. The third was to attract strategic projects in business-to-business applications, with a selective approach to the dot.com sector.

While the outlook for 2000 was positive, Mr Hanrahan said a slowdown in the US economy could have a positive influence on the Irish one, if it was not too abrupt.

The full text of the IDA's annual report is available at the IDA's website:www.idaireland.com