The future performance of the Irish economy will depend on developing "value added" activities such as research and development, an international business academic told the conference.

Prof Stephane Garelli added that the Republic would soon lose its advantage over other EU states in the areas of wages and tax rates and had to find other ways to gain an edge.

The Republic had a significant number of computer companies involved in "assembly" operations, which could easily move to lower cost locations. "The answer to this is to make a large investment in research and development and e-commerce," he told The Irish Times after addressing the conference. "The Republic cannot compete on cost alone." Nevertheless, he urged the Republic to fight as long "as possible" to retain its corporate tax rates, which are among the lowest in Europe. "Other countries may not like it, but these rates have served Ireland very well."

He said there was no way to "avoid" wage pressures building up in the economy, but that this was not a problem if the "skill levels" justified the rates.

According to Prof Garelli, there is a serious infrastructure problem in the Republic. "Even the development which has taken place seems to have occurred in pockets, like Cork, Waterford and Galway, but many other areas have been left out," he said.

Delays in building roads represented a major constraint on growth.

While optimistic about growth in the Republic's economy, Prof Garelli was less confident about the economic prospects in Europe next year. He said growth rates in the three most powerful economies in Europe - France, Germany and the UK - was sluggish. "The main reason the United States economy has done better is because Europe missed the technology revolution," he claimed.