As 2007 comes to an end, it is time to reflect on what has been an interesting twelve months for the Welsh economy.
On the one hand, we have seen economic statistics which have yet again cemented our position at the bottom of the prosperity league table. Only two weeks ago, we found out that Wales now has its lowest ever prosperity level, at 77% of the UK average. This dire economic statistic is compounded by the fact that we have the lowest mean gross weekly earnings for full-time adults in the UK and that the gap with the UK is growing. Business R&D expenditure for Wales in 2006 had fallen by 7% since 2005, as compared with an increase in the UK of 5%. Our export performance has worsened over the last 12 months and the tourism sector has suffered a downturn.
With some economists now predicting a possible recession next year, these statistics are hardly good news for the Welsh economy.
On the other hand, the business sector in Wales seems to be going from strength to strength.
Admiral became the first Welsh company to make the FT100, and we have had other successes – such as Boomerang, Freshwater and Tinopolis – making their impact on the London Stock Exchange.
In terms of our small business sector, the Fast Growth 50 project had a record year, with businesses achieving their highest ever turnover growth, boding well for the tenth anniversary of this project in 2008.
Despite this, it is clear that much remains to be done and despite the limited role that the Assembly Government can play, there are still levers at its disposal to make a difference.
For example, the £1.3bn European Convergence Fund programme has still to get off the ground and is critical that the Assembly starts to get key projects in areas such as infrastructure and innovation approved quickly in the New Year.
There also needs to be clarification regarding the potential role of the Assembly in encouraging entrepreneurship within the nation as there is too much fudge within this area amongst civil servants and organisations need to be clear whether the excellent work done by programmes such as the Entrepreneurship Action Plan will continue or whether all these efforts will have been for nothing.
The much criticised Knowledge Bank for Wales needs to step to the mark and deliver the type of support that growth companies are crying out for. We need a vibrant entrepreneurial business community in Wales which is fully supported by Government and the Knowledge Bank certainly has a role to play in this if it can ensure that it does not become a closed shop for a few favourite businesses.
International Business Wales needs to be out there selling Wales and bringing the best of overseas talents to this country and, more importantly, continuing to build links with the new fast growing economies of China and India.
In terms of our education sector, the Webb report has finally given the direction needed to deal with basic skills across Wales which, as many employers would tell you, is one of their biggest concerns in developing their businesses.
However, as the excellent commercialisation review produced by Simon Gibson pointed out earlier this year, there is still too much lost opportunity in terms of intellectual property protection within our university sector and it is time the Assembly started asking real questions on how the higher education sector should, with all its research excellence, be producing the patents which are the foundation of any knowledge-based economy.
Finally, we have a new Minister for Economic Development whose party has always supported the notion of creating a strong indigenous business base in Wales.
As discussed, the challenges he faces in turning round the Welsh economy are enormous but by encouraging enterprise and innovation, especially within our academic and private sectors, he could start delivering the type of change that has been sorely needed here in Wales.
In particular, I would urge him to consider calling an economic summit in early 2008 to bring new ideas to the table from the successful entrepreneurs and businesspeople we have here in Wales. At worst, it would be a wasted few hours for those attending but, at best, there could be the emergence of a whole new approach that finally turns around the fortunes of the Welsh economy.
Blwyddyn Newydd Dda. Happy New Year!
On the one hand, we have seen economic statistics which have yet again cemented our position at the bottom of the prosperity league table. Only two weeks ago, we found out that Wales now has its lowest ever prosperity level, at 77% of the UK average. This dire economic statistic is compounded by the fact that we have the lowest mean gross weekly earnings for full-time adults in the UK and that the gap with the UK is growing. Business R&D expenditure for Wales in 2006 had fallen by 7% since 2005, as compared with an increase in the UK of 5%. Our export performance has worsened over the last 12 months and the tourism sector has suffered a downturn.
With some economists now predicting a possible recession next year, these statistics are hardly good news for the Welsh economy.
On the other hand, the business sector in Wales seems to be going from strength to strength.
Admiral became the first Welsh company to make the FT100, and we have had other successes – such as Boomerang, Freshwater and Tinopolis – making their impact on the London Stock Exchange.
In terms of our small business sector, the Fast Growth 50 project had a record year, with businesses achieving their highest ever turnover growth, boding well for the tenth anniversary of this project in 2008.
Despite this, it is clear that much remains to be done and despite the limited role that the Assembly Government can play, there are still levers at its disposal to make a difference.
For example, the £1.3bn European Convergence Fund programme has still to get off the ground and is critical that the Assembly starts to get key projects in areas such as infrastructure and innovation approved quickly in the New Year.
There also needs to be clarification regarding the potential role of the Assembly in encouraging entrepreneurship within the nation as there is too much fudge within this area amongst civil servants and organisations need to be clear whether the excellent work done by programmes such as the Entrepreneurship Action Plan will continue or whether all these efforts will have been for nothing.
The much criticised Knowledge Bank for Wales needs to step to the mark and deliver the type of support that growth companies are crying out for. We need a vibrant entrepreneurial business community in Wales which is fully supported by Government and the Knowledge Bank certainly has a role to play in this if it can ensure that it does not become a closed shop for a few favourite businesses.
International Business Wales needs to be out there selling Wales and bringing the best of overseas talents to this country and, more importantly, continuing to build links with the new fast growing economies of China and India.
In terms of our education sector, the Webb report has finally given the direction needed to deal with basic skills across Wales which, as many employers would tell you, is one of their biggest concerns in developing their businesses.
However, as the excellent commercialisation review produced by Simon Gibson pointed out earlier this year, there is still too much lost opportunity in terms of intellectual property protection within our university sector and it is time the Assembly started asking real questions on how the higher education sector should, with all its research excellence, be producing the patents which are the foundation of any knowledge-based economy.
Finally, we have a new Minister for Economic Development whose party has always supported the notion of creating a strong indigenous business base in Wales.
As discussed, the challenges he faces in turning round the Welsh economy are enormous but by encouraging enterprise and innovation, especially within our academic and private sectors, he could start delivering the type of change that has been sorely needed here in Wales.
In particular, I would urge him to consider calling an economic summit in early 2008 to bring new ideas to the table from the successful entrepreneurs and businesspeople we have here in Wales. At worst, it would be a wasted few hours for those attending but, at best, there could be the emergence of a whole new approach that finally turns around the fortunes of the Welsh economy.
Blwyddyn Newydd Dda. Happy New Year!
Comments
I worked in Ireland during the early 1990s when the economy was starting to take off. My project at UCD was examining the 'competitive advantage of peripheral nations' and we worked with some of the leading policymakers at the time. I learnt a lot during the project, most notably about the importance of innovation in developing a small economy with limited resources.
Your comments about the changes in Ireland are spot on but is there any reason why the same changes could not have taken place here in Wales?
Having lived in Dun Laoghaire in 1995 when you wouldn't go out for a pint without a couple of mates in tow, it is now a mecca of coffee shops, trendy boutiques and wine bars.
Yet, 60 miles east, we have Holyhead remaining the poorest town in the poorest county in the whole of the UK, despite the Assembly having access to hundreds of millions of EU funding since 2000.
Personally, I believe that there does need to be a change in attitude and to promote the best of Wales.
That is why I created the Wales Fast Growth 50 project nine years ago to celebrate the best of Welsh entrepreneurs. However, we need many more similar projects to raise the level of confidence amongst individuals and businesses in Wales.
What has gone wrong?
Possibly it is the fact that we have no real leaders ready to grab the Welsh economy by the scruff of the neck and drag it kicking and screaming into the 21st century.
However, I remain optimistic that Welsh businesses can make a real difference as we do have some potential world beaters.
Also, don't give up on 2008 - there will be some innovative and unique ideas coming through over the next couple of months that could transform the Welsh economy - watch this space!!
2008, the year when the Welsh economy is transformed... 2008, the year leaders will grow a backbone.
I'll keep watching this space.
An enthusiastic, exciting and enthralling conclusion to the session followed by rapturous applause. This was surely the most upbeat report on the state of the economy of Wales for many a year. The headline makers summed it up – seizing the zeitgeist.
The concerns about underachievement of earlier years seemed, at least for the moment, to be forgotten in a sweet haze of splendour.
This was the year 2012 and the Professor (DJE)’s annual review provided the opportunity for a good honest conclusion on the merits of the jointly determined policies and programmes which, on implementation, were able to demonstrate what the economy of Wales was capable of achieving.
Flashback to 2007 and that economic performance year could only really conclude with that age old school report comment - which of course often set the tone for life’s experiences – ‘could do better’.
At the beginning of 2008, while some light at the end of the tunnel seemed to be appearing, there were still far too many pointers of a negative nature which seemed to imply a conclusion that the economy may never really reach the wished for dizzy heights.
So what happened? Well at its most basic and key, down in ‘arms and legs’ of Business Performance Wales, was the emergence of a large touch of humility from all quarters, a purging of the hubris and ‘cythraul canu’ brigade and, as an absolute imperative for those worthy entrepreneurs, empathetic help was welcomed and received from significant others in the form of conveying the true meaning of an unbridled passion in their chosen path and in the giving of positive encouragement of faith and hope of a successful outcome .
As one example of action taken, it was recognised and confirmed that the actual number of true entrepreneurs, as pre-defined, in Wales was very low. Yes, there were many business people but when studied practically at the detailed level it became clear that those individuals had a significant level of technical product and service delivery expertise in their chosen field which when applied to long hours of work ensured that the business continued in a relatively acceptable ‘comfort zone’ or ‘rut’, or alternatively, just about survived.
Spending time on operational matters compared to strategic intent, leadership, team building, business development and world class performance amongst other all round, good entrepreneurial activities served to stifle any great economic advance for the businesses concerned.
The programme that was introduced to remedy, and indeed in certain instances, to revolutionise this situation was hailed as a world class example of how change in this respect could be achieved.
At last Rhodri Morgan’s prophetic words early in the century that ‘it is not that Wales lacks entrepreneurs or great ideas, it is that Wales lacks the support and structure that will help entrepreneurs become established and be sustained’ would be of great comfort to him, during his long and happy retirement, as he reviews the results of the economic endeavours of recent years.