The Highlands and Islands are emerging as one of the most attractive business locations in Scotland - winning increasing new business investment.

That is a conclusion underlined by the latest job creation figures unveiled by development agency Highlands and Islands Enterprise (HIE), publishing its ninth annual report today (Tuesday 29th August).

One of several highlights has been the area's success in attracting inward investment - 17 projects creating over 1,600 jobs - setting a new record and beating even the achievements of the previous year.

Over 90 per cent of these new jobs are in the knowledge, information and technology sector, demonstrating the Highlands and Islands' ability to embrace new technologies and opportunities.

Launching the report HIE chairman Dr Jim Hunter said: "While the local and Scottish economies are changing, the enthusiasm and confidence with which many individuals, businesses and communities throughout the north are embracing these challenges has marked the last year. "Despite the challenges we still face I feel sufficiently confident to conclude that 1999/2000 has been a turning point for economic and social growth in the Highlands and Islands."

The inward investment projects include: Cap Gemini, set to employ over 700 in Forres and some 170 in Nairn; the expansion of the Iomart internet centre in Stornoway, creating 40 jobs; Westminster Healthcare's relocation of headquarters administrative functions to Inverness, creating over 80 jobs; the addition of a further 30 job value-added processing facility to the Stolt Seafarms plant in Scalpay; and the establishment of a marine engineering plant in Mallaig.

Overall the agency has helped create more new jobs than ever before, at the lowest ever cost to the public purse. 3,309 job opportunities were created or retained during the last year, with almost 80 per cent of these classified as new jobs, the highest proportion in the HIE Network's ten years. The cost per job was £2,521 (pounds) the lowest figure yet for HIE and demonstrating excellent value for money.

HIE Network assistance to businesses amounted to £14.2 million (pounds) which levered in a further £56.3 million (pounds) of private sector investment, or £4 (pounds) of private funds for every £1 (pound) invested by HIE.

These successes in the business sector have been mirrored by unparalleled activity in communities throughout the Highlands and Islands. 382 Community Action Grants (CAGs) were approved and supported with funding of some £1.5 million (pounds). This drew in £11.4 million (pounds) of funding from other sources and represents the best year ever for the CAG programme.

Projects assisted include a number of community halls from Tiree to Latheron; support for the Grey Coast Theatre company to develop a community play in Caithness and Sutherland; assisting with the provision of an all-weather playing surface at the Back Football and Recreation Club in Lewis; and helping Kilmallie juvenile shinty club to buy safety helmets.

HIE chief executive Iain Robertson said: "Last year we reported on a record-breaking achievement in winning inward investment for the area. This year we have outstripped that with even more growth. And this is growth throughout the whole area this time - a third of these new jobs are in our remote and fragile areas.

"To couple this business development with an exceptional amount of work in communities the length and breadth of the Highlands is especially pleasing."

The last year has also seen a strong performance from the HIE Network in skills development - ensuring the area's workforce remains competitive, with the training and capabilities to meet employers' changing needs.

A key development, providing a strong focus for training activities, was the preparation of the Highlands and Islands sectoral skills strategy. This identifies the training needs within ten different industrial sectors from food and drink to tourism and primary production, and was formed through consultation with a wide range of interested parties from the private and public sectors.

1,716 young people took up a place on the Skillseekers training programme - for which HIE is the lead agency - with a record 85 per cent having employed status against a target of 75 per cent. A further 3,602 people had their skills improved through bespoke in-house training in over 300 businesses.

HIE chief executive Iain Robertson said: "Providing people in the Highlands and Islands with the opportunity to learn new skills is absolutely vital. Without this the area would be less attractive to prospective employers, and existing companies would find it harder to cope with the changing demands of the modern market-place. Individuals and businesses in the area have demonstrated their commitment to personal development, not least through another strong performance in Investors in People."

During the last year 255 businesses or organisations achieved Investors in People status. This brings the Highlands and Islands total to 35 per cent of the Scottish total - from an area which hosts less than ten per cent of the country's businesses.

Looking ahead HIE chairman Dr Jim Hunter said: "We now need to sustain this growth momentum. We need the people of the area to have confidence in cultures that were long neglected and we need our communities to be empowered to take on the management of land and marine resources that were too long in the hands of outside interests. We also need many more of our folk to have the confidence to go into business on their own account. These are big ambitions but I am convinced they are attainable.

"Finally I would like to put on record my personal appreciation, and I am sure that of many people in the Highlands and Islands, for the role played by our chief executive Iain Robertson. The achievements of the HIE Network this year and in the last decade have been due in no small part to his leadership and commitment to the area."

Summary of HIE Network's key results in 1999-2000:

* 3,309 jobs created or retained, through financial assistance to 540 business developments, including 1,633 jobs through 17 inward investment projects;

* Average cost-per-job, through Finance for Business (FFB) funding, was £2,521 (pounds);

* £56.3 million (pounds) of private investment levered in by £14.2 million (pounds) of HIE Network funding;

* An additional 246 new businesses established by formerly unemployed people through the Business Start-up programme;

* 382 Community Action Grants were supported with a Network investment of £1.5 million (pounds) - drawing in £11.4 million (pounds) of other funding;

* 1,716 young people started on the Skillseekers programme; 85 per cent with employed status;

* 933 unemployed adults joined the Training for Work programme;

* 3,602 people were helped to develop their skills through in-company training in 313 businesses.