Like many, I was intrigued to read Sion Barry’s interview with Ieuan Wyn Jones in the Western Mail on Wednesday, as it gave a clear indication of how the economic development policy of the coalition government would develop over the next four years.
Many economic commentators would be heartened by his comments on making greater use of our university sector in developing a knowledge-based economy, something this blog has championed since its inception.
This is not just a matter of throwing more money at universities but creating a culture where academia and businesses in Wales can work hand in hand to develop a more prosperous economy.
Having spent the last week in Finland - one of the most competitive economies in the World - and working on an exciting new project bringing together industry and education under one platform, there is much more to be done here in Wales to ensure that we develop a culture of innovation within our business and academic sector.
I also hope that, unlike his predecessor, the funding is distributed across all universities in Wales, especially to Aberystwyth and Bangor universities, both of which are critical to the development of our rural areas.
Despite this, there are two issues which do concern me about the future economic direction of this government. First of all, it was interesting to read that “Mr Jones is also keen to increase business support to start-up companies...it is not just about the grant aid which is available, but giving the right advice at the beginning, in areas like the business plan, financial management and securing premises”.
Given this, perhaps he can ask his civil servants why they are single-handedly destroying the enterprise agency movement in Wales by steadily reducing the amount of funding spent on supporting and mentoring new businesses in Wales?
Most importantly, if he believes in public sector contracts being awarded to Welsh firms , why was the tender to manage the Assembly flagship Technium challenge project awarded to a company from Oxford and not one of our own agencies, especially as 'knowledge of the support sector in Wales' was one of the key criteria? Does he believe that our enterprise support sector is not up to the job?
This death by a thousand cuts is causing enormous damage to an enterprise infrastructure that was, at one time, the envy of all other regions in the UK. For example, during a recent visit by Swedish enterprise bodies, delegates were shocked to see how the Assembly had begun to centralise business services and undermine those bodies which had built up years of experience and expertise in supporting small firms.
At the same time, perhaps he could ask why the Assembly refuses to endorse the continuation of the Entrepreneurship Action Plan for Wales, which has done so much in raising start-up rates in Wales since 1999 and which was even taken up by the European Commission as a model for developing an enterprise strategy?
I was also surprised to read that, regarding the size of the public sector in Wales, Mr Jones believes it is “just right”.
Excuse me, but every independent economic commentator agrees that we have a bloated public sector in Wales that crowds out the private sector.
For example, the proportion of public spending in Wales as a proportion of overall prosperity is 54 per cent, as compared to 34 per cent in London. Moreover, 23 per cent of the workforce in Wales works in the public sector as opposed to just 17 per cent in the South East of England and the Government’s own data shows that between 2001 and 2005, the largest increase in the number of jobs was in health, education and public administration, equal to 53% of all the new jobs created in Wales during this period.
Given this, I don’t have to tell you to which region is top and which region is bottom of the prosperity league table.
The private sector has also been ignored by the civil servants in the project management of the Objective 1 programme, the largest economic regeneration initiative which Wales has ever seen, and looks likely to be shunned in the new £1.3 billion Convergence fund programme launched by the Minister last week.
As Mr Jones rightly points out, “the wealth creators are in the private sector” but it will require more than political rhetoric or a cosy chat with the business editor of the Western Mail to turn that into reality.
Instead, it requires a sea change in attitudes from his own civil servants and, indeed, his Coalition Government, to encourage businesses to take a greater role in creating prosperity in Wales, and in supporting an enterprise culture that will lift Wales from the bottom of the UK’s prosperity league table.
Comments
Far from it.
It seems that WAG – and its quangoes – will do anything to avoid assisting companies like ours – in the private sector – compete on a level playing field.
Take procurement for something as simple a management training programme. WAG expects every supplier to pre-qualify, leaping through hoops of fire that cost time money and effort that only large businesses can realistically support. And, unlike Dublin City for example, it’s necessary to do this for every potential job (usually with a completely different set of forms) instead of a once a year or two task. Little wonder that many of us simply cannot afford the time it takes.
Then there’s the third sector agency/business: the organisations, sometimes with charitable status, that effectively receive public funding to compete against the private sector. We recently didn’t get a £25k contract because a publicly subsidised organisation could do it (based on ‘cost recovery’ whatever that was) for less than half the price. The client wanted us, but the taxpayer (me?) effectively paid the difference to undercut the real cost. Often, Dylan note, universities fall into this category.
A few years ago the First Minister said he wanted a hundred small businesses like ours in Cardiff. He’ll be very lucky if this one stays much longer with policies that are at best indifferent to indigenous micro businesses, and at worst positively discriminatory against them.
http://www.tmpl-online.co.uk
and to no avail.the support programme under convergence is so not fit for purpose.
Compare it with the resources and support in the RDAs in England what a difference. The funds need to get to the businesses themselves not be creamed off by middle men.Your point on the publice sector fits here.
May be he needs to look at his advisors. Phil Williams had a group of people who kept him up to speed on all aspects of the economy.
Universities have a role to play I agree, but that role has to be defined and not all Universities are up to speed either Much of the thinking I have seen is rooted in old WDA speak from 10 years ago.
We need enery and vision in our business sector. The delver side I agree with ,far too much of the same people doing the same things , the world has moved on.
Working in the private sector I can say that even the ones listened too by the Assembly are the same old suspects
Shake it down and get some light in there IWJ.
The EAP - well lets re wtite it How about a joint job Dylan there are quite a few economists and business gurus who would love to have a go
Just giving money though a grant scheme to start businesses to increase the numbers of start ups within the area is a waste of money.
However, politicians don't have a reputation for long term , joined up thinking with regards to business management issues because most, if not all of them, have no experience of running a business!
All they are able to do is to spout statistics and make them prove their policies. Until we have more business literate management within WAG, we are just going to see a loop of policies which are destined to fail.