SUPPORTING FEMALE ENTREPRENEURS

If you were asked to name any famous female entrepreneurs, who would you mention? Laura Ashley, Anita Roddick, Estee Lauder, Deborah Meaden?

Compare this to the long list of male entrepreneurs you could name at the same time. Yet, as the latest report from the Global Entrepreneurship Monitor (GEM) team shows, women are making a real impact on entrepreneurship across the World.

According to the latest data, more than 104 million women aged between 18-64 years old were actively engaged in starting and running new business ventures in 2010 in 59 countries. In addition, another 83 million women were running established businesses demonstrating the real impact they have on the development of enterprising economies across the World.

Despite this, the rate of entrepreneurial activity by men remains far higher. In fact, the study shows that women are less likely to consider entrepreneurship than men and when they do start a business, they are more likely to be motivated by necessity rather than an opportunity in the market-place.

Indeed, during the last eight years, the GEM study has shown that women’s perceptions about entrepreneurial opportunities have declined in most developed economies. Additionally, women are more likely to be discouraged from considering starting a business due to fear of failure and less likely to believe they have the skills to start and run a new venture.

As a result, it is not surprising that the growth expectations of women-run businesses are lower than for those run by men with twice as many men as women expected to add 20 or more employees to their companies.

Why is the case?

Much of the research in this area has tended to focus on gender differences in the access to, and use of, entrepreneurial finance, which is key to the birth and growth of new businesses. For example, studies have shown that female owned businesses tend to start with lower levels of overall capitalization than that used by male-owned firms. They also have lower ratios of debt finance and are less likely to use private equity or venture capital.

So are women turned off starting a new business because they have different perceptions to men, especially in terms of accessing finance?

That is the question that I have attempted to answer recently along with my colleagues Dr Caleb Kwong and Dr Piers Thompson from the University of Essex and Cardiff Metropolitan University respectively. Drawing on data from 49,107 individuals questioned as part of the Global Entrepreneurship Monitor (GEM) adult population survey undertaken in the UK, the research examined “Differences in perceptions of access to finance between potential male and female entrepreneurs”.

Not surprisingly given previous studies, the results from the study confirmed that women are more likely to perceive that they are financially constrained than their male counterparts. Additionally, the research found that gender plays an influential role in preventing potential female entrepreneurs from starting a new business when no other barriers exist. In fact, the models developed found that women are around 10 percent more likely than men to perceive finance to be the only barrier to entrepreneurship. Those are the findings but what are the implications for policymakers?

Certainly, the analysis suggests that there is a role for support bodies to develop specific mechanisms to deal with this issue. For example, the availability of start-up finance from various sources could be marketed by different support organisations to encourage women to attempt to obtain the necessary finance rather than being discouraged at the first hurdle. This includes the need to increase both financial awareness and literacy so that potential female entrepreneurs are aware of all financial options open to them as well as increasing their ability to utilise those funding sources they have knowledge of. These should not only emerge from public bodies and women's stakeholders groups, but also from the private sector and community-based organisations, such as credit unions, which have greater outreach abilities.

The study also found a stronger effect from education in reducing these perceptions of financial constraints for women. This implies that female graduates could provide a source of potential entrepreneurs who are less likely to perceive obtaining finance to be a problem and are more positively positioned to be capable of acquiring external funding. Given this, there is no reason as to why higher education institutions could not play a vital role in supporting the development of female entrepreneurs.

For example, Welsh universities could increase the level of female entrepreneurial activity by advertising the benefits and potential of entrepreneurship as a career. This could be undertaken through cross faculty entrepreneurship education programmes which address the needs of all the student population rather than just business students. More importantly, they could provide enterprise initiatives that are specifically targeted towards the specific needs of potential female entrepreneurs within the student population.

Recent research has shown us that new firms create almost all new net jobs in the economy and yet women are, as this study suggests, facing specific barriers which may disincentives them from taking part in entrepreneurial activity. Certainly, if we can get more women to consider establishing a new venture, then it can only benefit the Welsh economy at a time when we need every job we can get.

THE HEART OF ENTREPRENEURSHIP - WANTING TO MAKE SOMETHING HAPPEN

The latest sketchbook from the Kauffman Foundation. Enjoy....

RETURN TO THE VALLEY

Last summer, the University of Wales Global Academy established an office in Silicon Valley, California, the global centre for innovative and entrepreneurial businesses.

Based at the Irish Innovation Centre (IIC) in San Jose, the self-proclaimed capital of Silicon Valley, the aim of the office is to provide a presence for Welsh businesses that felt ready to present their innovation technology to potential investors, taking advantage of the soft-landing that the IIC provides to companies already based there.

As most of you are no doubt aware, Silicon Valley is where some of the leading high technology businesses in the World are to be found, with great companies such as Apple, Cisco, eBay, Google, Hewlett Packard, Intel and Yahoo having their corporate headquarters located there.

And of course, let’s not forget that it is also the home of Facebook, a company that was started in a bedroom eight years ago but which, in the next few months, will undertake a stock market flotation that is estimated to value the company at $100bn (£65bn), making billionaires of its founders and backers, including Mark Zuckerberg, who is still only 27 years of age.

However, the region has faced some challenges over the last few years and like every other part of the USA, even the Silicon Valley economy was not immune to the severest recession since the 1920s. But similar to the aftermath of the dot.com bubble burst a decade ago, it is mounting yet another remarkable comeback. In fact, according to a recent review of the region, more than 42,000 new jobs were created in 2011, which represented an increase of 3.8 per cent as compared to the US average of 1.1 per cent.

Innovation has also begun to fire again, with patent registrations increasing by 30 per cent in twelve months. And venture capital investment increased by 17 per cent with a specific focus on biotechnology and medical devices. In 2011, around a third of venture capital invested nationwide - £5bn - went to Silicon Valley companies.

These are some of the reasons why I am passionate about getting companies from Wales to visit. Even by having a small Welsh presence in the region, there is the potential to make a difference, especially as we have been building up our links through specifically working with the Irish Technology Leadership Group (ITLG) that manages the Innovation Centre.

Established in 2007, the ITLG is a non‐profit group of senior Irish executives from around the world, including some of Silicon Valley's leading corporations, each of whom is committed to promoting the technology connection with major markets in the USA.

By recognising us as fellow Celts who want to work alongside our Irish cousins to develop our respective economies, the ITLG has given us a platform to potentially connect entrepreneurs, technology companies, academics, students and government officials to Silicon Valley.

Over the next few years, we aim to work with the ITLG to make the most of this opportunity through trade missions, networking events, executive introductions and strategic business planning meetings.
The first real opportunity to do this will take place next month, when we lead an innovation mission to San Jose. We are only intending to take a small group this time as a precursor to a more extensive visit later this year but if you would like to come along then please get in touch and I am sure we can fit you in.

The main attraction of this visit will be the annual ITLG innovation summit. Thisis a two-day gathering which presents attendees with an inside look at the cutting-edge technology, business and political trends that are creating the most exciting and profitable new opportunities in the world. It will give those who attend the chance to meet venture capitalists, discuss their products and services with other entrepreneurs and technologists and, most importantly, network with other innovative individuals. The organisers are also hoping to have Cardiff-born Michael Moritz, one of the most successful venture capitalists of his generation, attend the event.

The major sponsor of the summit is the venture capital house Andreessen Horowitz, a company set up by Netscape founder Marc Andreessen with the aim of investing in new starts ups. Only last month, it raised a billion pounds for a new fund that will not only be investing in software companies but also in industries such as healthcare and education.  Imagine what a boost it would be for our economy if such a world renowned company would consider investing in a business from Wales.

As Sir Terry Matthews, the Newport-born serial high-tech entrepreneur, said last year when the Global Academy announced the decision to have a presence in California, "San Jose and the remainder of Silicon Valley continue as a major concentration of high technology companies and venture capitalists. The new Welsh Innovation Office will be a significant benefit to any new company looking to enter the market for sales opportunities or access to sources of capital.”

No one could disagree with such a statement but it will only be a success if Welsh companies make the effort to come across and show the investors in Silicon Valley that our products and technologies are as good as any in the World.

I look forward to seeing you there in the future.

HONOURS FOR THE MANY AND NOT THE FEW

DAILY POST COLUMN 6TH FEBRUARY 2012

Earlier this week, a gentleman and community champion passed away peacefully.

Billy Kenny, who was the manager of the Town Hall Cinema in Pwllheli for many years, was the driving force behind the local Children’s Theatre.

Through putting on plays and musicals, Billy gave hundreds of children, including myself, the opportunity to shine and, more importantly, gave us the self-confidence that enabled us to develop as individuals.

He did all of this in his own time, often spending many hours in preparation for each extravaganza with no reward except seeing the proud smiles of parents as their kids took a bow at the end of another successful night.

In fact, it is a travesty that Billy was never recognised publicly for his contributions to the local community, which brings me to the subject of someone who was actually honoured by the establishment.

Following months of speculation, Sir Fred Goodwin was stripped of his knighthood for his role in not only destroying the same bank, but in nearly dragging the rest of the UK economy down with it.
The most fascinating element of the heated discussion that followed Mr Goodwin’s fall from grace was about the decision to deprive him of the honour.

Some, such as former Chancellor of the Exchequer Alistair Darling, said it was ‘tawdry” and wrong to go after individuals whilst others, such as Lord Digby Jones, suggested that there was a ‘whiff of the lynch mob on the village green’ about the decision.

Yet, amongst all this outpouring of angst from the great and good, few have suggested that it is perhaps the honours system itself that is outdated and needs urgent reform.

Let’s take Fred Goodwin’s knighthood, which was awarded in 2004 for services to banking.
Why on earth would you make someone a “Sir” for essentially doing their job and being paid tens of millions of pounds for doing it? The obvious answer is that such honours tend to be driven by political influences, especially when governments court the business community.

But it is not only leaders of industry that have benefited from such largesse.

Take a look at the list of those who are honoured every year. You would be surprised to see how many senior civil servants working for the government are given high honours for undertaking well-paid jobs with one of the best pensions around.  In fact, it would seem that it is a perk of the job for many senior mandarins in both Whitehall and Cardiff Bay to gain a high honour during their career.

And why do actors, entertainers and sports star get honoured regularly, again for essentially being paid a lot of money for doing their daily job?

I love the music of Elton John, Paul McCartney and Mick Jagger but why on earth would anyone want to give any of this multi-millionaire trio a knighthood apart from the fact that politicians are forever obsessed with ingratiating themselves with celebrities.

Of course, those defending the current system will argue that 75 per cent of the honours go to those who are “selflessly committed to voluntary or charitable work, or undertaking voluntary, or unpaid activity in connection with their “day” job, in a way which was for the benefit of the wider community”.

But that means that a quarter of the honours are still awarded to people as a political reward for doing the job they are already paid to do.

Therefore, why don’t we just scrap the whole system and replace it with a single honour that specifically recognises the achievements of ordinary people who might be classed “local heroes”.

Not only would this begin to reform the class-ridden society that still exists in the UK, but would finally ensure that the Billy Kennys of this world, rather than the Fred Goodwins, gain the recognition they deserve.

GLOBAL INNOVATION BAROMETER

Last week, the American industrial giant GE published the results of its “Global Innovation Barometer”, a survey of 2,800 senior business executives in 22 countries.

It is a fascinating study, in that it gives an insight into how the business community views innovation and, more importantly, its impact on the competitiveness of individual companies.

Not surprisingly, the USA is viewed as having the best reputation globally for innovation, followed by Germany, Japan, China and South Korea.

The UK is ranked seventh, behind India, with 39 per cent of British respondents stating that government had not been successful in supporting research and innovation. What should be of interest to policymakers is that the study shows the belief of businesses in innovation as the main driver of competitiveness, prosperity and job creation, although the current uncertainty within global markets is having a major effect on their ability to innovate.

In fact, nine out of ten respondents saw increased challenges at the current time in accessing venture capital, private investment and government funding. Despite this, the study emphasises the links between innovation and competitiveness, showing that countries where innovation policies are perceived as more competitive actually delivered higher growth i.e. markets where business is most satisfied with the perceived political and social environment for innovation delivered higher GDP growth than those markets where business feels anxious or threatened by policies.

Indeed, many businesses seem to be influenced by the government’s approach to innovation, with companies indicating that their internal investments in innovation, from research and development budgets to the pursuit of new products or business models, are at risk when there is a perception of a negative shift in government policies that support innovation.

For the Welsh Government, there is a vital lesson in communicating its innovation policies effectively and coherently to the business community, something that has been sadly missing during the last few years.

In terms of recognising new trends in innovation that could benefit Wales in the long term, the study suggests that companies are moving beyond the traditional closed model of innovation and are instead enthusiastically embracing the open innovation model, where collaboration between several partners, including smaller organizations and individuals, is the norm. However, there is a so-called partnership paradox in this trend in that whilst 86 per cent of the businesses surveyed believe that partnerships are important to innovation, only a fifth believe that finding partners is an immediate priority on a day to day basis. Again, there could be a role for the Welsh government here in providing a matchmaking service between different organisations wishing to develop their innovation, given the payback on wealth and prosperity to the economy.

In terms of business competitiveness, it was heartening to note that 77 per cent of executives acknowledge that small firms have the ability to be as innovative as large firms and whilst R and D is seen to be important, nearly three quarters of businesses agreed that innovation will not be driven by scientific research but by people’s creativity.

A more in-depth study, conducted by the Milken Institute, examined key innovation indicators in the UK. Their findings make interesting reading:

• University-Industry Collaboration (Leading): University-industry collaboration is strong in the United Kingdom. In the GE Innovation Survey,  78 percent of respondents agreed that it is quite easy for firms to partner with universities. The Higher Education Funding Council for England (HEFCE) recently launched the Economic Challenge Investment Fund, which will enable universities and colleges to provide specialized training, development, and professional support to individuals and businesses. The government has also supported innovation vouchers that allow businesses to purchase engagement with knowledge-based institutions. 
• Venture Capital Deals (Leading): The venture capital market in the United Kingdom is one of the strongest in the world, equaling 0.2 percent of GDP. In nominal amounts, the United Kingdom is second only to the United States, and as a percent of GDP, the United Kingdom ranks third, behind Finland and Sweden. Some continue to worry, however, that the government has not fully addressed financing for early-stage, high-growth businesses. Respondents in the GE Innovation Survey were mixed, with 45 percent stating that private investors are supportive of companies that need funding, 41 percent disagreeing, and 14 percent uncertain.
• Gross Expenditures on R&D [GERD] (Leading): At 1.8 percent of GDP, the U.K.'s R&D spending was below the OECD average in 2008.  Industry financed 45 percent of GERD, while government funded 31 percent. Business expenditures on R&D (BERD) equaled 1.1 percent of GDP. Boosting the intensity of innovation activity in enterprises is one of the nation's top policy challenges as cited by the INNO-Policy TrendChart report.
• High-Technology Exports (Leading): The United Kingdom performs comparatively well in high-technology exports, placing in the top of the first quartile globally. The top innovative sectors remain pharmaceuticals, defense, and aerospace. Going forward, the principal areas of growth appear to be in the green economy, the creative economy, and in advanced health care involving biotechnology. 
• Utility Patents (Leading): In 2008, the United Kingdom produced 27 triadic patents per 1 million residents, which was below the OECD average, but still in the first quartile of countries surveyed. While not typically highlighted, the manufacturing industry plays a large part in the U.K.’s economy. Between 1997 and 2009, the country's manufacturing productivity increased by 50 percent, and in 2009, manufacturing represented 13 percent of GDP. In the GE Innovation Survey, 60 percent of respondents agreed that the protection of copyrights and patents was effective.
• STEM Education (Above Average): In global rankings for science, technology, engineering, and math education, the U.K. places in the bottom half of the second quartile, ahead of Russia, the United States, and Germany, but still well behind countries like Singapore, Finland, Switzerland, and Canada. In 2008, the United Kingdom was slightly above average with eight researchers per 1,000 workers; 23 percent of all new degrees were in science and engineering. Respondents in the GE Innovation Survey were relatively negative; 46 percent believed the government had not been successful in improving education.
• Business Environment (Leading):A renowned international marketplace, the United Kingdom maintains one of the best environments for starting and growing a business. The financial markets are well developed and venture capital is abundant. In 2008, nearly 18 percent of gross expenditures on R&D were financed from abroad, greater than three times the OECD average. The governance system is also markedly strong, with significant stakeholder involvement and strong appraisal processes in effect. More recently, the government introduced the Enterprise Finance Guarantee (EFG), based on the previous Small Firms Loan Guarantee, which extends credit to companies with viable business plans that would normally be able to obtain funding in more stable financial circumstances

Therefore, if the UK is to increase its relative position in terms of innovation and catch up with nations such as the USA, government, academia and industry must all their part.

For policymakers, there needs to be a focus on developing an efficient tax system that provides incentives to R and D and investment. It must also ensure that a strong institutional framework is in place to protect intellectual property. However, the danger, in trying to deal with addressing the large public deficits is that education and R and D investments will not be fully supported.

For universities, there must be greater interaction with businesses, especially in terms of having a more open approach to innovation and commercialising knowledge more effectively rather than hoarding intellectual property in laboratories. Creativity must also be valued in education as much as scientific knowledge, as that is the key driver behind innovation.

Finally, businesses must continue to play an important role through encouraging an environment that addresses co-operation with smaller firms and the cross-fertilisation of ideas across different parts of the organisation.

But the clear message to politicians, vice chancellors and chief executives from the Global Innovation Barometer is that innovation is critical to not only restarting the economy, but in ensuring competitive advantage as the economy grows. Given this, it is critical that all of them must not only invest in innovation, but must put it at the forefront of their policies for the future.

WALES NEEDS NEW FIRMS NOT WHITE ELEPHANTS

As governments around the World look to reignite their economies, there is increasing interest in developing policies to encourage greater entrepreneurship. This is not surprising given that a range of studies have demonstrated the impact of both new and small firms on the economic prosperity of many nations.

Earlier this week, a major study from the European Commission showed that 85 per cent of net new jobs created in Europe between 2002 and 2010 came from small and medium sized enterprises (SMEs), far higher than their 67 per cent share of total employment. That, in itself, shows the vital importance of small firms at this critical time for Europe.

However, the one statistic that screams out for politicians to take notice and reach out for new policies immediately is the finding that all net employment growth has been generated by newly born SMEs (i.e. those aged up to five years old). In fact, the number of jobs created by new firms – 17.5 million - more than compensated for the 8.9 million jobs lost through business failure.

In contrast, employment in businesses over ten years old declined by seven per cent over the same period. This is a critical finding and demonstrates unequivocally that entrepreneurship, rather than large firm expansion, is key to the job creation potential of the Welsh economy. More importantly, entrepreneurial activity is not limited to a small number of people.

According to the latest edition of the Global Entrepreneurship Monitor (GEM) released on Thursday, it is estimated that 388 million entrepreneurs were actively engaged in starting and running new firms in 2011. And who are these entrepreneurs?

The average profile of the individual running new businesses remains largely unchanged from previous GEM studies. Through a survey undertaken in fifty-four countries, the results showed that most were often young to middle-aged (25-44 years) although there is a tendency toward younger entrepreneurs in many developing economies. In terms of gender, they tend to be overwhelmingly male although it does vary by nation.

For example, Singapore and Switzerland have comparatively high levels of female participation in entrepreneurship whilst only one in four of the entrepreneurs in France and the Republic of Korea are women.

The GEM study also confirms the findings of the European study in that new firms are job creators, with 141 million early-stage entrepreneurs expecting to create at least five new jobs in the next five years. Given this, it is not surprising that a proportion are also innovative and export-driven - 69 million new firm creators are involved in developing new products and services and 18 million sell at least a quarter of what they produce to international markets.

So what does this mean for policymakers in Wales and the UK? Certainly, it is time for politicians to start walking the talk if the economy is going to recover from its current doldrums during the next 12-18 months.

The Westminster Government should continue with programmes such as UK Start-Up to encourage a greater number of new businesses. But there needs to be more urgency to ensure a greater focus by legislators on reducing red tape and simplification. In particular, ensuring that the needs of new and small firms are taken into consideration when any laws or regulations are developed is critical.

There is also a desperate requirement for better long-term finance for new firms, something that has been sadly missing since the banking crisis despite the efforts of the Coalition government through the Merlin project. In Wales, the recently published report on micro-businesses is a step in the right direction and some of the recommendations could make a real difference. But whilst it is a valuable study in itself, it mainly deals with the issues of firms already in existence rather than addressing how a greater number of new businesses can be created and supported.

And as this blog has been stating time and time again during the last eight years, Wales, through its Entrepreneurship Action Plan (EAP), already has the structure and strategy that is light years ahead of anything else globally in terms of driving forward the creation of an enterprise culture. Through the implementation of that plan between 2000 and 2004, the number of new firms increased considerably in Wales and, not surprisingly, so did private sector employment.

And this was not done by concentrating on a ‘picking winners’ strategy of focusing on high growth start-ups, as the Welsh Government has recently adopted but by developing an enterprise culture in which more people would be encouraged to start a new business.

Unfortunately, the EAP was abandoned in 2005 by a Government that was more in favour of a “Fields of Dreams” strategy which focused on building expensive white elephants such as Techniums rather than having a comprehensive approach to developing an entrepreneurial nation rich in new employment opportunities.

And whilst attracting inward investment is of some importance to Wales, encouraging more entrepreneurs is more critical to the nation’s future, an issue that the Institute of Welsh Affairs seems to have singularly ignored as part of the theme of its third Welsh Economy conference in March.

More importantly, if the new Minister, as she has stated on numerous times, is focused predominantly on creating new jobs, then with the evidence showing that the vast majority of these come from start-ups, it is surely time for the resurrection of the EAP to create more new firms, and therefore more wealth and prosperity, in the Welsh economy.

DIFFERENCES IN PERCEPTIONS OF ACCESS TO FINANCE BETWEEN POTENTIAL MALE AND FEMALE ENTREPRENEURS

Another paper has been published from the research undertaken by the Global Entrepreneurship Monitor research team for Wales.

The paper "Differences in perceptions of access to finance between potential male and female entrepreneurs: Evidence from the UK" has been published in International Journal of Entrepreneurial Behaviour & Research(Vol 18, No 1).

The purpose of the study is to examine whether being female increases the probability that an individual feels difficulty in obtaining finance is a barrier to starting a business. The study aims to extend this to examine if a pure gender effect exists or whether it is the interaction of gender with demographic, economic and perceptual characteristics that plays the most important role in the perception of financial constraint. Although actual financial barriers faced by female entrepreneurs have been extensively studied, this is one of the first studies to focus on the concept of perceived financial constraints faced by potential female entrepreneurs.

The data within this study are drawn from the Global Entrepreneurship Monitor (GEM) adult population survey between 2005 and 2007. The first stage of the study splits male and female respondents into separate sub-samples and runs individual regressions on each portion of the sample. The second stage of the study combines the male and female portions of the sample to directly examine the differences in perceived financial constraint between genders.

The results suggest that a greater proportion of women are solely constrained by financial barriers than their male counterparts. The gender of the respondent was also found to interact with a number of other personal characteristics in a significant manner.In terms of practical implications, this finding suggests that policymakers should be encouraged to market the availability of start-up finance from various sources to encourage women to attempt to obtain the necessary finance rather than being discouraged at the first hurdle.

IS BEING LEADER OF THE OPPOSITION THE WORST JOB IN BRITISH POLITICS?

Daily Post column 16th January 2012

During last week, it may have dawned on Ed Miliband that being Leader of the Opposition is probably the worst job in British politics.

At a time when the economy is struggling and the UK government is managing a massive reduction in public expenditure, his popularity should be at an all-time high.

Yet, not only have the Conservatives overtaken Labour in the polls but, following a series of gaffes reported in the press, even Nick Clegg is rated higher than Mr Miliband.

As cartoonists continue to draw him as Gromit, there are already whispers of plots to replace him only fifteen months after he narrowly won the Labour Party leadership.

And when you start to become a comic caricature, then it becomes difficult for the public to consider you otherwise. In fact, other leaders of the opposition have faced the same problem in recent times.

Michael Foot, one of the great political thinkers of his generation, was reduced to comparisons with a tramp for wearing a donkey jacket to a cenotaph ceremony.

Neil Kinnock saved his party from becoming an extreme left wing irrelevance but once he had been labelled the “Welsh windbag”, fallen into the sea at Blackpool, and let his exuberance get the better of him at a pre-election rally, most of the public simply couldn’t envisage him as Prime Ministerial material.

The same was true of William Hague, lampooned for wearing a baseball cap at a theme park, and Iain Duncan Smith for his unwitting self-parody as the ‘quiet man’, although both have subsequently rehabilitated themselves as key members of the Coalition Cabinet.

As Shakespeare wrote, “Some are born great, some achieve greatness and some have greatness thrust upon them”.

And it is the latter category, that includes leaders of the opposition, that face the biggest obstacles.
Rivals who desperately want their job and have enough time to stab them in the back before the next election surround them.

There is the danger, in trying to show inclusivity, that they abandon people who helped them win in the first place, not only losing the trust of those who gave their support but creating enmity where none existed before.

Indeed, there is the temptation to inject so-called new blood by appointing the wrong people to senior positions of trust and, as Ed Miliband has found out with Lord Glasman, they end up being an embarrassment to both him and the party.

And in an election that was close, as with the Labour Party in 2010, many supporters will then think “What if?”  What if we had realised, right at the beginning that he was never up to the job of leader? What if we had supported the other main candidate, in this case, Mr Miliband’s brother?

And then the whispering campaigns begin, encouraged by rivals and fuelled by newspaper editors whom they have alienated through ill-thought responses aimed at shoring up their authority.

So what is Mr Miliband to do?

Certainly, he must become a more effective public communicator to connect with his MPs and his party. He must also build on the faith of those who supported him in the first place, remembering that, in politics, it is as important to keep your friends close as courting your rivals within the party. That is what David Cameron did so well in building an inner circle of advisors in opposition who are still with him today in Downing Street.

Finally, he must also look to develop policies that resonate with the wider public and not just the Guardian reading intelligentsia who will be the first to turn on him once his star begins to wane.

If he does not, then the four to one odds of him resigning as Labour leader during 2012 may seem very generous indeed.

UKTI AND WELSH FIRMS

Over the weekend, I had a twitter dialogue with Rhuannedd Richards, currently chief executive of Plaid Cymru.

She was responding to a comment by the First Minister that having access to the UK Government's international division, UKTI, was one advantage that Wales had as being part of the UK. Rhuannedd noted that she was "Surprised that Carwyn Jones used how Wales "benefits" from UKTI to justify continuation of UK. Wales has never been important to UKTI".

I am wondering where she received this information as it is certainly different to what I was told by UKTI in a meeting a few weeks ago. Indeed,  I was informed that UKTI had supported 376 Welsh firms to internationalise their activities even though this should be a devolved matter. Indeed,  more crucially, I wonder how this compares to whatever services are now offered by the Welsh Government, especially given that it was Ieuan Wyn Jones, when economic development minister, who abolished IBW (International Business Wales) which previously had responsibility for all internationalisation activities?

So what can UKTI offer to Welsh businesses?

The UKTI’s Overseas Market Introduction Service is a flexible business tool that lets British companies commission the services of trade teams located in overseas missions across the world. The Market Visit Support programme also provides assistance to new-to-export or new-to-market SMEs visiting overseas markets as part of their trade development process. However, in this respect, UKTI also provides some direct funding to the Welsh Government to support their own mission programmes.

UKTI also works in partnership with other organisations to deliver internationalisation initiatives. For example, the Export Marketing Research Scheme is an initiative run by the British Chambers of Commerce as a contractor to UKTI. It provides advice and co-funding (at up to £5k per project) for eligible companies to carry out their own market research overseas. The Chambers can also provide support for an Export Communications Review, which examines a company’s strategic communications approach to trading overseas.

But the First Minister should not just quote the example of UKTI when it is politically expedient if the Department for Business in Wales, as I have been reliably informed, is doing little to ensure a closer relationship with this body.

And if the economy is important to the Welsh Government, then more could, and should be done to help businesses take full advantage of exporting opportunities. In fact, Welsh firms still only account for 2.6 per cent of all UK exporters despite a growth in the value of exports since 1999, which suggests considerable potential within the Welsh business community for further overseas expansion if only the right support and advice was available.

However, that can only be achieved if there is better co-ordination and co-operation between the Welsh Government’s international branch and the UKTI in 2012. Not only could this begin a long overdue entente cordiale between the two administrations but, more importantly, should benefit the Welsh economy at a time when businesses need every help they can get.

ROBERT OWEN, CO-OPERATIVES AND THE WELSH ECONOMY

Western Mail column 14th January 2012

The picture of Wales globally is one that is normally a mixture of coal, male voice choirs, daffodils and rugby.

Yet, it is easy to forget that one of the greatest gifts that this small nation gave to the World originated with an ironmonger’s son from Mid-Wales.

Born in 1771 in Newtown, Robert Owen was the creator and inspiration behind the co-operative movement where the business is owned and operated by a group of individuals for their mutual benefit.

Although most of his work in this area took place in New Lanarkshire in Scotland rather than the country of his birth, his legacy lives on not only in Wales but also in many other countries across the World.

For example, one out of every four people in Germany belongs to co-operatives whilst 30,000 co-operatives provide more than 2 million jobs in the USA. In New Zealand, 22% of the country’s wealth is generated by co-operative enterprises, especially in the food industry where they have 95% of the export dairy market and 70% of the meat market. The South Korean fisheries co-operative has a market share of 71% whilst a Canadian co-operative is responsible for 35% of all world production of maple syrup. In India, over 239 million people are members of the co-operative movement.

Therefore, the whole business of co-operatives is not a marginal activity but one that has a significant economic and social effect in both the developed and developing World. Indeed, with the United Nations estimating that the livelihood of half of the World’s population is dependent, in some way, on co-operative enterprises, this august institution has deemed 2012 as the International Year of Co-operatives.

So what about the co-operative movement in Wales?

According to a new publication by the Bevan Foundation, co-operatives – which include credit unions, housing co-operatives and worker co-operatives - are contributing more than £1 billion to the Welsh economy. They currently employ more than 7,000 people in a variety of sectors, with nearly three quarters were to be found in retail.

Whilst many may think of co-operatives as being organisations that do not make any money, it is estimated that Welsh co-operatives generated a total pre-tax profit of £19m, which is then distributed to members or reinvested in the business. Indeed, the co-operative movement across the UK recorded pre-tax profits of £715 million in 2010, an increase of 25 per cent since 2006.

Therefore, co-operatives are real businesses and nowhere is this exemplified more than by the John Lewis Partnership, which owns the John Lewis Department stores as well as the upmarket Waitrose. Currently, it is the third largest privately owned businesses in the UK with annual profits last year of £432 million.

In Wales, one of the real success stories within the emerging cleantech field has been the renewables firm Dulas, which employs 100 people and currently has an annual turnover of over £22 million. This Machynlleth-based workers’ co-operative, the second largest in the UK, has appeared on the Wales Fast Growth 50 listing for the last three years and is developing a global reputation in a fast growing and expanding market.

Given this, is the co-operative movement the way forward for the future of businesses in an age where politicians are increasingly wary of predatory profit-seeking capitalists?

Certainly, the Bevan Foundation report makes a strong case for the co-operative movement, suggesting that their focus on creating sustainable jobs, generating community benefits and protecting the environment is the business model that all organisations should follow. They also make a persuasive case for the Welsh economy, indicating that co-operatives are innovative, profitable and, more importantly, are anchored in Wales.

Yet, I still believe that the model, whilst it works for some organisations, is not necessarily the one that should be pursued by all businesses. In fact, it could be argued that, despite exceptions to the norm such as John Lewis and Dulas, many co-operatives lack the entrepreneurial drive necessary to become growing and prosperous businesses in key sectors of the economy.

Certainly, I cannot imagine Apple, Virgin, Microsoft and many other successful businesses would have become the success that they are the vision and drive of key individuals such as Steve Jobs, Richard Branson and Bill Gates. Perhaps the real triumph of the co-operative movement is its innate philosophies, many of which have been adopted by successful firms.

During the last few years, we have seen businesses increasingly sharing their profits with their employees, investing heavily in local communities and making a real effort to reduce their environmental impact.

And that, perhaps, is where the real triumph of Robert Owen can be found – not in that every organisation is a co-operative but, 240 years after his birth, having more and more businesses across the World adopting his philosophies for sustainable growth. I believe that if he were alive today, this fact, more than anything else, would make this visionary businessman and reformer very proud of what he created.