The headline figures in last week's end-of-year statement look promising: a net 3% increase in jobs in IDAbacked companies; 71 new business projects negotiated; 50 R&D projects supported to the tune of 260m and the year declared to be the best since 2000 in terms of the "range and quality" of new investments.

Given that the years since 2000 have been tough, it isn't possible yet to judge whether everything is coming right on the job creation front. But the year was also interesting in providing pointers to the evolving direction of the IDA, which is continuing to shift even farther from its old role as traditional grant awarding state agency.

It has little choice in reality. One milestone of 2005 was the EU Commission's vetoing of a proposed 1.6bn grant aid package for Intel, in a decision that was seen as a harbinger of a tougher grant regime.

The IDA, which has won regular plaudits for adaptability, has been quick to move. Last year, the agency made one of its more radical strategic departures in backing the new National Institute for Bioprocessing, Research and Training (NIBRT) being established at UCD.

That might have seemed the more natural territory of Science Foundation Ireland (SFI), but Dorgan says the institute is an initiative of major importance to the development of the Irish biopharma industry, and which fell outside SFI's remit.

Applied research requires "serious funding", he said.

"This involves up to 70m of support from us."

The fact that the IDA is limited in what it can do grant wise was a factor in the decision to back the NIBRT, Dorgan conceded. "More importantly, it was what is needed now. It is a whole series of factors other than grants that make a difference."

The centre is about developing "deep skills", Dorgan said. Keeping Ireland attractive is a long-term game, he said, and that long-term game is the big one for government.

By way of example, he cites the government-supported laying of the Global Crossing transatlantic fibreoptic cable five years ago, which he says paved the way for the arrival in Ireland of Google, Yahoo! , eBay and Amazon.

One of the challenges on the R&D side is to improve links between companies and third-level, Dorgan said, and he said progress is being made. What he calls one of the "best" investments in this area was announced at the end of last month, when the IDA revealed that it will back a bio-therapeutic drug discovery research facility being established by Wyeth Research in UCD. "That's good.

While there is a lot of research on the pharma side, this is one of the first where a company is going back to the discovery stage."

The march up the value chain is still the holy grail, and Dorgan says one internal focus for the IDA this year will be positioning itself for "advanced activities". The agency will be hiring, particularly in new technology areas, and there will be some internal reorganisation of its activities.

Along with R&D, the second main mantra for the year is regional development. Getting business into the regions has never been easy, but last year's push delivered results, and Dorgan is hoping for more of the same in 2006.

The end of year statement highlighted that 46 out of a total of 71 investments in 2005 located outside Dublin.

During the year, 59.8m was spent on property development, almost all of it outside Dublin. Dorgan said at least the same amount will be spent this year, partly on business and technology parks and partly on the supersites being developed with a view in particular to attracting biopharma investors.

Frances Ruane, professor of economics at Trinity College Dublin, believes the agency is going in the right direction by evolving into a broker for companies considering investing in Ireland and adviser to government on what needs to be done to aid its courtships. "One of the most useful things the IDA has realised over the years is that it has to be flexible."

The indirect role of the IDA in advising government is now far more important than it was in the past, she observed.

Of the three key areas highlighted in the IDA's 2004 annual report as needing work - skills, infrastructure and regional development - only regional development is to a degree within the IDA's control, she noted.

Government appears to be listening to at least some of the agency's appeals. Dorgan says one of the most encouraging developments for him over the past few months was the fact that finance minister Brian Cowen made a strong case for fourth-level education investment in his budget speech.

Ireland will need to double its output of PhDs in the next six years to meet the needs of multinationals. At the moment, Dorgan said, there is a "pretty good balance" between what multinationals want and what Ireland can supply. "But we need to make sure we maintain that supply."