Earlier this week, I attended the ‘Developing the Future 2007’ conference at the British Library in London.
Organised by Microsoft, the aim of the event was to examine the impact of the knowledge sector on the UK. It was a fascinating and thought-provoking day with some excellent speakers and, most importantly, raised a number of essential questions for the development of the Welsh economy.
A key finding was the estimate that the knowledge sector – defined as financial services, IT, business services and creative services – today employs 41 per cent of all British workers and will account for 50 per cent of UK GDP by 2010.
For Wales, one of the worries in this development of the sector is that London is rapidly becoming the main hub for developments for knowledge industries and unless positive interventions can be made by the more peripheral regions to attract these value-added industries out of the capital, then that trend looks set to continue in the immediate future.
So how can the Welsh economy ensure its fair share of the growth in the knowledge economy? Perhaps the answer lies in the changing profile of the knowledge sector, which is expected to have a 40 per cent graduate workforce by 2020.
As the managing director of Microsoft UK told me, the fuel that drives forward companies like his are skilled staff with the right information technology (IT) qualifications, which is why they are looking to India, China and even emerging countries such as Vietnam with their hundreds of thousands of computing and IT graduates to help them develop their future business. In contrast, the total number of UK graduates emerging with IT related degrees in 2005 was 15,930, with less than a third of these subsequently gaining IT related posts. Given this, you would have expected that demand from UK industry was low.
However, nothing to be further from the truth and there is an annual workforce requirement of around 160,000 for new IT jobs created from growth as well as replacement demand, with the slack being taken by immigrant workers.
Therefore, one of the main opportunities for the Welsh economy, through its universities, could be the training of IT graduates that can fill the jobs becoming available in the industry, with the hope that firms would relocate here to Wales where the skills of future staff would be developed.
However, it seems that more innovation is needed by educationalists in the design and marketing of courses, as data suggests that many potential students don’t seem to find IT courses attractive.
According to UCAS (Universities and Colleges Admissions Service), the number of applicants for computing courses has fallen from 29,014 in 2001 to 18,341 in 2005, and yet IT graduates have one of the highest average annual earnings for both men and women in the UK.
One complaint from the observers of the industry is that some of the courses on offer within UK universities do not reflect the needs of industry, with very little business taught within computing degrees. As the head of e-skills (the sector skills council for the industry) recently said, IT professionals in a global economy need to be numerate, literate, business and customer oriented people who understand how to make the most of technology to transform the way we work and live.
There will be £500 million of European convergence funding available for skills development over the next eight years and I would urge our university sector to work closely with companies such as Microsoft to develop the courses that are attractive to the industry and that would encourage such world class firms to consider setting up high value added operations in Wales.
With such funds at their disposal, there is no reason as to why departments of computing at Aberystwyth, Bangor, Glamorgan and Swansea, supported by the Assembly Government, do not take up this challenge to develop new and innovative courses - including niche offerings in areas such as games technology - and ensure that Wales becomes the first place for major knowledge firms to look for their future employees and, more importantly, as a site for new operations.
Organised by Microsoft, the aim of the event was to examine the impact of the knowledge sector on the UK. It was a fascinating and thought-provoking day with some excellent speakers and, most importantly, raised a number of essential questions for the development of the Welsh economy.
A key finding was the estimate that the knowledge sector – defined as financial services, IT, business services and creative services – today employs 41 per cent of all British workers and will account for 50 per cent of UK GDP by 2010.
For Wales, one of the worries in this development of the sector is that London is rapidly becoming the main hub for developments for knowledge industries and unless positive interventions can be made by the more peripheral regions to attract these value-added industries out of the capital, then that trend looks set to continue in the immediate future.
So how can the Welsh economy ensure its fair share of the growth in the knowledge economy? Perhaps the answer lies in the changing profile of the knowledge sector, which is expected to have a 40 per cent graduate workforce by 2020.
As the managing director of Microsoft UK told me, the fuel that drives forward companies like his are skilled staff with the right information technology (IT) qualifications, which is why they are looking to India, China and even emerging countries such as Vietnam with their hundreds of thousands of computing and IT graduates to help them develop their future business. In contrast, the total number of UK graduates emerging with IT related degrees in 2005 was 15,930, with less than a third of these subsequently gaining IT related posts. Given this, you would have expected that demand from UK industry was low.
However, nothing to be further from the truth and there is an annual workforce requirement of around 160,000 for new IT jobs created from growth as well as replacement demand, with the slack being taken by immigrant workers.
Therefore, one of the main opportunities for the Welsh economy, through its universities, could be the training of IT graduates that can fill the jobs becoming available in the industry, with the hope that firms would relocate here to Wales where the skills of future staff would be developed.
However, it seems that more innovation is needed by educationalists in the design and marketing of courses, as data suggests that many potential students don’t seem to find IT courses attractive.
According to UCAS (Universities and Colleges Admissions Service), the number of applicants for computing courses has fallen from 29,014 in 2001 to 18,341 in 2005, and yet IT graduates have one of the highest average annual earnings for both men and women in the UK.
One complaint from the observers of the industry is that some of the courses on offer within UK universities do not reflect the needs of industry, with very little business taught within computing degrees. As the head of e-skills (the sector skills council for the industry) recently said, IT professionals in a global economy need to be numerate, literate, business and customer oriented people who understand how to make the most of technology to transform the way we work and live.
There will be £500 million of European convergence funding available for skills development over the next eight years and I would urge our university sector to work closely with companies such as Microsoft to develop the courses that are attractive to the industry and that would encourage such world class firms to consider setting up high value added operations in Wales.
With such funds at their disposal, there is no reason as to why departments of computing at Aberystwyth, Bangor, Glamorgan and Swansea, supported by the Assembly Government, do not take up this challenge to develop new and innovative courses - including niche offerings in areas such as games technology - and ensure that Wales becomes the first place for major knowledge firms to look for their future employees and, more importantly, as a site for new operations.
Comments
Try these guys instead.
It is a total fiasco.
I raised this with the Assembly months ago when a number of businesses complained that their contracts were inclusive of VAT but everyone was in denial.
I think it demonstrates what an ill-thought operation the whole 'bonfire of the quangoes' was, and the bringing in of the WDA was a result of a dispute between egotistical individuals rather than a strategy to better Wales.
I remain to be convinced that this was the right way forward for Wales and history may prove me correct.
Of course, what this also means in a competitive environment, the other regional development agencies now, all things considered, have 17.5% more to spend on business development. Given our recent performance in inward investment against other UK regions, as reported in the WM this week, this could be a major handicap.
Worst still, the Assembly is now asking all organisations who deal with them to absorb the VAT costs in any contract.
Over time, that may be possible but many have already built this into their costs for the coming year, which is why we are seeing big redundancies across the enterprise support sector which, of course, directly affects the competitiveness of Welsh business.
Interestingly of course, Finance Wales - formerly a subsidiary of the WDA - is still operating outside of the Assembly (but with the Assembly Government as the 100% shareholder) and able to claim VAT back.
Perhaps that is the model for the future and bodies such as International Business Wales should be dealt with in the same way.
As my nain would have said, a proper lob sgows.
No doubt it will be all WAGs fault if he chooses not to!
Not really - just their job with all the money going into promotion of Wales to get him here in the first place....