That was 11% more than in 2003 and a larger increase than the 8% growth in venture capital investments across all industries. In the final quarter of 2004, 11 of the 17 largest investments went to health care ventures, a clear indicator that confidence has returned to the market. Overall, there were 253 initial public offerings in 2004 – triple the number in 2003.

In Europe, initial research from European venture capital research specialist Tornado Insider indicates a 15% rise in the number of life science deals in 2004, marking the first year-on-year rise in the sector since 2001.

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The good news for economic development agencies is that this growth is also translating into increased physical investment. Preliminary numbers from Oxford Intelligence, researchers of Ernst & Young’s European Investment Monitor (EIM) database, indicate a growth in projects of almost 10%.

The question for agencies is which markets to target for companies planning on investing and where they are aiming to locate. Tornado Insider research signals that the UK is a clear winner in terms of capital raised, accounting for more than France and Germany (the next largest markets) combined. The next significant player is Switzerland, followed by the Nordics and Benelux.

In terms of project location, the key trend from EIM data is that central and eastern Europe account for nearly all the growth in location choice.

Peter Lemagnen is a director of Oxford Intelligence.

E-mail: peter.lemagnen@oxint.com