INWARD investment is not enough to drive successful regional development - that is the message contained in new research from regional development agencies One NorthEast, the Welsh Development Agency and Barclays Bank.

The report, called Competing with the World: World Best Practice in Economic Development recognises the success of regions such as the North-East in attracting foreign investors, but argues that a greater focus on developing local businesses and links between education and industryis vital to future success.

It identified six main areas of concern, which included:

* Creating regional leadership, through shared vision co-ordination and funding

* Focusing regional resour- ces, through clusters such as science parks and enterprise hubs

* Supporting local entrepreneurs with help for start-up businesses, to promote innovation and to introduce entrepreneurship to young people

* Bringing education and business together by setting up regional policy networks, creating research and development resources and incubators for high-growth businesses

* Creating community involvement through life-long learning, specific training and retraining to meet the needs of a changing market

* Building national and international links to develop new markets and to exploit inward and outward investment opportunities.

Commenting on the report, Energy and Construction Minister, Brian Wilson, said: "We set up the regional development agencies in England to tackle just the sorts of issues which this research has identified as key. Creating the right conditions for entrepreneurship to grow and flourish is at the heart of what the RDAs are trying to achieve through their Regional Economic Strategies."

The study examined the strategies adopted by 16 regions around the world, selected for their high prosperity, growth and innovative approach to development.

Dr John Bridge, chairman of One NorthEast, said: "The North-East can learn a great deal from this report and should now consider the findings in the context of the Regional Economic Strategy review, which is currently under way."

"The report clearly shows that to be successful requires many things to be brought together within a long-term policy framework.

Sir Peter Middleton, Barclays Chairman added: "Successful economies are made up of successful regions driving growth and employment by building on local expertise and opportunities.

"Barclays is delighted to be working with Government, and the Regional Development Agencies to help regions define their development strategies."

Among them was Emiligia-Romagna in Italy which has had success in developing traditional industry clusters and Cleveland, Ohio, which has led the field in retraining workers to create new oppor

The report identifies the need for regional development strategies to be business driven and enjoy broad political support.

The strategies require clear targets over a suitable period of time for them to be achieved and links need to be fostered between the public and private sectors.