The Oxfordshire economy is the envy of many other parts of the United Kingdom. Unemployment is virtually non-existent, small businesses flourish and we are a world leader in the field of bioscience.

Add the global reputation of Oxford University, thousands of tourists flooding into the county every summer and an ideal geographical position between London and Birmingham, then it is little wonder people say this area is booming.

But is it? The recently published Economic Development Strategy for Oxfordshire paints a more complex picture.

The document was produced by the Oxford Economic Partnership, a network of public and private sector organisations dedicated to generating success in the Oxfordshire economy.

It describes the county as having great potential and overall the economy is strong.

But it also identifies issues, and suggests improvements that should be made in skills, housing and traffic congestion if Oxfordshire is going to be recognised as a world-class area or even a major force among our European competitors.

OEP chairman John Bridgeman said: "We have much to be proud of -- great businesses, great universities and colleges and fantastic countryside. But we must not be unduly complacent.

"We also have congestion, poor infrastructure, high cost of living, homelessness and poverty, both urban and rural.

"We cannot sit back and relax -- we need to work together to overcome the problems."

Mr Bridgeman suggests that far from being an international competitor, the county is growing more slowly than its neighbours in the south east.

"In international terms, the economy is only fairly average and is not comparable with parts of Germany, Italy and the United States.

"The real challenge is to make Oxfordshire realise its potential -- it would be wrong to say potential means economic growth."

There is no doubt more and more people are being attracted by that potential.

Latest figures show there are 632,000 residents in Oxfordshire -- a figure that is expected to rise by 10 per cent in the next ten years.

It's hardly a gold rush but enough to create serious problems for a transport and housing infrastructure that is already struggling to cope.

The cost of housing in many areas is now comparable with London and becoming out of reach of the pockets of the average worker.

First-time buyers looking to build a life for themselves and get a foot on the property ladder are having to save more and more just to make a deposit on a property that would cost half as much in other areas of the country.

Transport is also another serious headache for planners with congested roads, continual jams and under-investment in public transport.

Mr Bridgeman added: "People cannot afford to live here because of the cost of housing.

"One of the lessons we have learned about economic development is that affordable housing has to be provided close to work along with good transport links.

"This is where other countries are going to outperform us, but we are tackling the situation just in time.

"There has been more debate in the last six months about these issues than there has been in the last 16 years."

Bill McCardle, policy manager of Oxford Chamber of Commerce, also recognises the headaches caused by housing and transport.

He says the dilemma between protecting the environment and allowing business to flourish now has to be addressed urgently.

"I want to create a climate in which businesses that are already here feel they can expand without being hindered by interminable planning delays.

"But one of the cultural situations in the county is that there is not the most welcoming approach to business development -- it is always seen as a threat to the environment.

"I would like to see a more reasoned debate when businesses wish to grow.

"The authorities need to look at planning regulations to see if some are being ultra-restrictive.

"If we don't, then we may live in a very green area but the jobs and wealth will no longer be there."

Full employment also means there is a shortage of skilled labour for many employers in the county, which is a major problem.

The skills of the workforce could also be improved by training which would give people better jobs and fill the skills gap. A key player is the Learning and Skills Council which is coming up to its first anniversary after setting up in the wake of the old Training and Enterprise Council and the Further Education Funding Council.

Martin Towers, head of research at the Oxford, Milton Keynes and Buckinghamshire division, based in Abingdon, said: "We have to make sure people leaving school arrive in the workplace with the appropriate skills, and ensure employers have the right approaches to taking on staff.

"A surprising number of organisations don't seem to plough resources into retraining staff to adapt to changing circumstances."

The LSC also aims to tackle problems in poorer areas such as east Oxford to ensure local people have the correct skills to make them employable.

The decline of manufacturing has hit Oxfordshire as it has across the UK.

A sign of the times came with the closure of Oxford Automotive Components in north Oxford in December.

In the 1970s, it employed more than 3,000 people, but the site will now be developed for housing.

Mr Towers added: "Traditional full-time manufacturing occupations are now being replaced by part-time retail occupations.

"Education and training is vital to ensure social and economic goals are fulfilled."

Overall, the health of the Oxfordshire economy is good but there are vital issues such as housing and infrastructure and education of the workforce that need to be addressed if a backward step is to be avoided.

Mr Bridgeman says: "We have to put our shoulders to the wheel to make things happen for each other.

"If people don't take action, then we will be wasting our time."