IT is success story that has had a massive impact on the social economy of Highland Scotland. LifeScan Scotland, the media-shy diabetic monitoring device supplier, was launched in 1995 with 30 employees and a £5 million grant from Highlands and Islands Enterprise (HIE).

Now the Inverness-based company, which this month stunned analysts with a pre-tax profit of £71.6m in 2007, has become the area's biggest private sector employer.

That profit - detailed in its most recent figures at Companies House - is a massive increase on the previous year's £11.6m. LifeScan also had an increase in turnover of more than £20m to £183.22m.

The results are all the more spectacular considering that in 2006 the company - a world leader in its field - suffered a downturn after setting aside funds following a potential damaging product recall.

LifeScan Scotland declined to comment on its profit surge, and the reasons for it, a spokesperson blaming the policy of parent company Johnson & Johnson in the United States for its apparent secrecy on the issue.

But senior economic and political figures in the Highlands stress that the company's success is both crucial to the long-term wellbeing and development of the area's economy.

"What we are trying to do is attract high-tech businesses, with research and development capability. That is where new products and services will come from," said Ruaraidh MacNeil, operations manager of HIE's Inner Moray Firth team.

"LifeScan fits that profile. What is particularly important is that the company currently has around 200 people working in research and development in Inverness which is crucial to what we are trying to achieve here."

The Scottish government is also keen to highlight the company's contribution.

A spokesman said: "LifeScan's investment benefits not only the people of Scotland but will provide a research and development base to help combat diabetes. Companies like this bring with them the employment opportunities and add real value to the Highland and Scottish economies."

Few predicted the current blossoming of the life sciences industry in the Highland capital when the company was established at Raigmore Hospital as Inverness Medical in 1995.

The start-up was only possible with an investment in shares by the HIE, which also provided around £5m in grants for building development.

Early predictions put the company's employment potential at 200 people.

But its takeover in 2001 by Johnson & Johnson subsidiary LifeScan has allowed it to far outstrip that, making it a global leader in designing and manufacturing glucose test strips and electronic meters for monitoring diabetes.

It is now also at the centre of attempts to make Inverness a world leader in research into the condition, which affects almost 4% of the UK population.

About six years ago, planning began for the HIE and NHS- backed Centre for Health Sciences(CfHS) at Raigmore Hospital. The £6m third phase of the development will be dedicated to the treatment of, and research into, diabetes.

LifeScan managing director Willie Printie broke his habitual silence to confirm the company's commitment to it, saying: "The centre will play an important role in putting Inverness well and truly on the map in terms of education and research. The role of organisations such as the Centre for Health Science, the University of the Highlands and Islands (UHI), Inverness College and the local schools is of great importance to the supply of labour to the life science sector."

Printie acknowledged the role that the company plays in the area's social economy.

"It is an amazing coincidence that during LifeScan's existence, the city of Inverness has gone from strength to strength, but there are many more contributing factors that we certainly can't take any credit for. However, LifeScan is a global company, with much of its revenue coming from outside the UK, so I suppose in that respect we are bringing significant external funding into the Highland capital," he said.

The first phase of the £23m centre is already operating and the second - dental services - opens next week.

Those behind it say that when completed, the centre will be an important factor in the argument for UHI providing medical teaching facilities, a development which MacNeil feels is crucial if Inverness is sustain its current growth.

"At the moment all available surveys show that Inverness is growing, in every demographic area, that is, except 16 to 25. At that age we are losing a lot of young people, who go away to university and further education and don't return.

"Yes, other cities, with universities, lose young people, but that is balanced by the number of people coming to the city.

"It is all part of what we need to do to put Inverness on a level playing field with other Scottish cities."