IDA Ireland has strongly defended its strategy of attracting foreign multinational investment to Ireland. "We will always hold that there must always be a link between the amount of money a company is given to locate in Ireland and the value and sustainability of what it is doing in Ireland, whether that is job numbers or economic impact," said Mr Colm Donlon, public relations manager at IDA Ireland.

Mr Donlon was responding to statements made by Mr Jim O'Hara, general manager of Intel Ireland, that IDA Ireland's "antiquated" method of valuing jobs on a dollar cost-per-job basis and other outdated State policies threatened the Republic's ability to attract the high-value, knowledge-based industry jobs.

"You've got to relate companies moving into Ireland with a particular piece of activity, and any grants you've given to them, to jobs and economic impact. Otherwise, you get to a situation where you are giving free handouts and Ireland has never allowed itself to get caught up in the free hand-out mentality," he said.

Speaking at the lunch on Tuesday, sponsored by the American Chamber of Commerce Ireland, Mr O'Hara said IDA Ireland needed to think hard about its approach to inward investment which "doesn't really position itself for intellectual jobs".

However, Mr Donlon said that, while it was correct to question policy, surveys that IDA Ireland had carried out showed the cash-incentive strategy was not one of the key priorities for companies locating in the Republic.

"It's right to question whether the incentive strategy is correct but we would argue it's not so much the cash-in-the-hand incentives that are going to make the difference, it's what Ireland can do in terms of resources and competitiveness," he said.

In terms of attracting high-value, knowledge-based industry jobs and firms carrying out R&D, Mr Donlon said "enormous" funding was available through Science Foundation Ireland and for companies carrying out research in conjunction with universities.

"There is also direct funding to companies through the IDA which is not jobs linked," he said. "Around 50 major companies last year added R&D centres to their multinational businesses in Ireland with IDA grants which is not linked to numbers of jobs." But he said he shared Mr O'Hara's concern over the drop in students choosing science and engineering as their top college choice. "The IDA, Forfás and industry are driving a campaign at the moment to build up CAO application numbers for IT courses," he said.