Objective 1 status for European funding has now been secured for the west, Border and midlands regions, but huge challenges lie ahead for those involved in bridging the gap between this 13-county zone and the rest of the State.
A proposal in the recent report by Fitzpatrick economic consultants for the three regional authorities in the Objective 1 area focused attention on the important role of third-level colleges, with the suggestion that the feasibility of upgrading the Institute of Technology in Sligo to a university be examined.
The north-west's two institutes, in Sligo and Letterkenny, have been growing rapidly and there is an argument that they will have to increase links with industry further and be more flexible to business needs.
It is argued that their role in attracting investment and in fostering indigenous enterprise will have to extend beyond the provision of well-qualified graduates.
If the Government's regionalisation policy is to be successful, the brain-drain from the north-west will have to be stopped and the imbalance in educational achievements across the State addressed. In the three counties of Sligo, Leitrim and Donegal, only 15 per cent of people have a third-level qualification, compared to 19 per cent in the Republic as a whole and 24 per cent in Dublin.
There is also a significantly lower proportion of people with scientific and technological qualifications - just 1.4 per cent compared to 2.4 per cent nationally. The average wage in these three counties is £11,600 compared to £16,395 in the State and £18,400 in Dublin. The regional economy suffers from a high degree of dependency on low-growth industries.
The director of the Institute of Technology in Sligo (ITS), Mr Breandan Mac Conamhna, says he is hopeful that the Government will act on the Fitzpatrick proposal and fund a major expansion of the college, with new courses and the current target of 3,000 full-time students increased to 6,000. Numbers at ITS have already doubled over the last decade to 2,700.
"Whether we are called an institute or a university is no big deal to me personally. It is not so much what we are called as the implications for the support we can give to the region," Mr Mac Conamhna said.
And while the institutes in Cork and Waterford have recently succeeded in applications to be granted the authority to award their own certificates and diplomas, ITS is only beginning the process of making such an application. The authority to award its own degrees could not be given until much later.
Mr Mac Conamhna says he is satisfied that the Educational Qualifications Bill currently going through the Dail sets out a process by which all non-university colleges can develop through these different stages.
He says he wants to focus on providing qualified graduates and in helping to redress a recognised weakness in the north-west in research and development. The campus has already been transformed due to a £19.5 million capital investment since 1995.
Mr Mac Conamhna says the college has concentrated on responding to the needs of industry. Intake on computing programmes increased last year from 60 to 150, a course in mould-making is now being offered to support the tool-making industry and a carpentry/joinery course was restarted to address a skills shortage in the area.
Developments at the college have helped Sligo become a national centre for the tool-making industry. Fourteen degree-level courses are offered and two new programmes are being planned in catering and drama.
The Institute of Technology in Letterkenny has also had a £12.5 million expansion since 1995 with the addition of a new library, computer labs and lecture theatres. Full-time student numbers have increased by about 40 per cent to 1,780 and four degree-level courses are now offered.
The director of the college, Mr Paul Hannigan, said 41 per cent of last year's graduates who went into employment got jobs in Co Donegal but the industrial base does not exist in the region to retain many of them.
"What we are finding is that more graduates are finding jobs locally but because we don't have the industrial base, they are being drawn into the services sector," he said.
Mr Hannigan is also a member of the Donegal Employment Initiative Task Force, set up by the Tanaiste in response to the Fruit of the Loom crisis, and says the college is now working closely with the IDA and Enterprise Ireland to respond to the needs of industry. All prospective investors who come to the area visit the college.
"While our main mission is the education of graduates, we also see our role as trying to develop the industrial base in the region through interaction with the various agencies locally," he said.
The director of IBEC in the north-west, Mr Brendan McGinty, says the existence of the colleges in the region improves its ability to attract investment and that they "must continue to relate closely to the changing needs of the regional economy". A number of recent initiatives, he said, demonstrated an even greater potential for improved linkages between the colleges and business.
IBEC believes the colleges' potential to develop as research and development centres could be enhanced through joint initiatives and increased co-ordination with the private sector. "To realise the greater potential of the colleges, more effective marketing of their activities is essential within the region and to the wider business community in particular," Mr McGinty says.
The chief executive of the Western Development Commission (WDC), Mr Liam Scollan, says the colleges need to be more flexible in responding to business needs. He says the challenge facing the institutes of technology is to balance training graduates with the need to work directly with companies.
The colleges could do this by taking a more "modular" approach, offering two or three-week courses, thus allowing companies to increase workers' skill levels.
Becoming an "R&D hub" for industrial sectors relevant to the region should also be an important part of the colleges' role, Mr Scollan says. If such R&D relationships were developed, it would "glue" companies to the region and make it more attractive for them to stay.
Both institutes, at Sligo and Letterkenny, are in the process of establishing new business innovation centres and have a number of incubation units for small businesses. The centre in Sligo houses a research and advisory centre for the tool-making industry.
These centres, if successful, could play a very important role in developing the regional economy, as has been demonstrated at the Institute of Technology in Dundalk, where an on-campus Regional Development Centre now has 26 incubator units and houses 18 commercial enterprises.
The acting director of the institute in Dundalk, Mr Denis Murphy, says the centre has been a success only because the college actively pursued funding from non-mainstream sources. Money has also been received from an EU programme for border regions. "The difficulty is that none of it is funded through the mainstream budget. You have to go out and look for funding," he says.