Generous grant aid packages are one of the key reasons why new manufacturing investors locate in Northern Ireland rather than in other regions in the UK, according to research being undertaken by one of the North's leading economic think tanks.
In its annual report, published today, the Northern Ireland Economic Council (NIEC) says a new study comparing selective financial assistance grants in the North with those available in the UK has shown that potential new investors are strongly influenced by grant aid packages currently on offer in the North.
According to the NIEC, which reports to the First Minister, Mr David Trimble and Deputy First Minister, Mr Mark Durkan, Northern Ireland's manufacturing sector has a lower level of productivity and wages than its counterparts in the rest of the UK.
Although the high level of financial assistance currently on offer may attract new investors, it is not, according to the NIEC, having any impact on productivity levels in the North.
The NIEC believes the new research into grant assisted-led inward investment will help stimulate the debate on economic development in the North.
Sir Reg Empey, the North's Minister for Enterprise, Trade and Investment, wants to encourage a move away from a grant aid culture in economic development to innovation and entrepreneurship.
The Industrial Development Board has been spearheading this objective and will pass the responsibility for this on to Invest Northern Ireland, the economic development umbrella group that will come into force early next year.
Latest IDB job creation figures reflect the move away from offering potential new investors heavily incentivised grant packages in the North.
Last year, the IDB reported record job creation figures in Northern Ireland of 7,200, but their results also showed that the cost per job has fallen from £18,500 in 1995 to £7,245 for 2000/01.
According to the NIEC, the issue now facing Northern Ireland is how it can raise its rate of economic growth to a higher plateau.
In its annual report, Ms Janet Trewsdale, chairman of the NIEC, said it recognises how important political stability and progress is in terms of creating a nurturing environment for the local economy.
