PROFESSOR DYLAN JONES-EVANS

More needs to be done to stop young people in North Wales turning their backs on starting new businesses in the region. These are the findings of the unique Global Entrepreneurship Monitor study undertaken by the National Entrepreneurship Observatory for Wales. The Global Entrepreneurship Monitor (GEM) was begun established in 1997 as a joint initiative between Babson College and London Business School. It describes and analyses entrepreneurial activity across a large and growing range of nations. Through producing internationally comparable data on the entrepreneurial activity, the GEM study is unique as the only longitudinal study of entrepreneurship undertaken throughout the major nations of the World. The project is supported by European Structural Funds, the Welsh Assembly Government, the University of Glamorgan and Cardiff University. The research shows that entrepreneurial activity amongst working age adults in North Wales was measured at 5.7 per cent in 2006, which is higher th...

For many people, taxation is a necessary evil which must be levied to pay for vital public services. For Government, the balancing act is whether they can change the rates of taxation without affecting the overall amount of tax collected. Therefore, the changes to capital gains tax announced last week by Alastair Darling could have far ranging consequences for the UK economy, especially if it reduces the number of firms paying tax. Simply put, the Chancellor of the Exchequer has set a new flat rate of 18 per cent for capital gains tax, a cut from the previous rate of 40 per cent. On first glance, this clearly looks like a major tax benefit but for many small business owner managers, it will be a massive blow as they will actually be facing a tax increase. Let me explain. One of the best received policies developed by Gordon Brown in his drive to create an enterprise economy was the introduction of a 10 per cent taper relief for businesses. Simply put, those who invested their time and ...

In Wales, there are indications of yet another shake-up of policies to support businesses, the third such move in the last eight years of devolved government with responsibility for economic development. Some have suggested that this new model will focus of resources on picking winners, with the majority of the small firm sector left to fend for itself. Indeed, it can be argued that this is only right within a free market economy, although the same could equally apply to the grants handed out under regional selective assistance to large firms that step over the border into Wales. However, in drawing up this new grand plan, perhaps our policy-makers have forgotten that there are major areas of market failure that might justify the development of policies to support and promote small scale enterprise. First of all, small firms are at a relative disadvantage compared to large firms in the collection and analysis of information about market opportunities, sources of finance and government ...

I have just had a message from someone closely involved with the Dolgarrog Aluminium story that the Welsh Assembly Government is dragging its heels over support for the management team bid for the plant and that it looks likely to close. I hope my source is wrong but unless two mystery buyers come in, then one of the largest private sector employer in the Conwy Valley will close. Not only that, whilst WIDAB - the Assembly's grant decision body - have approved financial support in principle, Finance Wales have refused to support any such plan. Indeed, I was told that they did this in less than 24 hours without visiting the plant or having any discussion with the management. If this is the case, then what on earth is going on? How can a business plan backed by one part of the Assembly be turned down by another? Heads should roll for this if the plant closes because something could and should have been done to keep it open, as I have discussed previously. It is an enormous risk for th...

NEO has just released the latest regional report on entrepreneurship , this time covering the South West of Wales. It emphasises the importance of female entrepreneurship within this part of Wales, and highlights the challenges in supporting such businesses, especially within rural areas. Indeed, with start-up programmes being cut back, there needs to be a serious reassessment of support for new firms, especially as the 'rural premium' of delivering such services across a wide area can be a major issue.

Last Wednesday evening, I popped back to my home town of Pwllheli for an evening meal with my parents, to talk with a few businesspeople and to have a pint at my old local, the Black Lion, with John ‘Ambulance’ and Gwyn ‘Penlan’. Pwllheli is considered to be the capital of the Llyn Peninsula and, like many parts of rural Wales, it has its economic challenges, most notably in finding job opportunities to encourage young people to stay in the area. Two and a half years ago, officials at Gwynedd County Council put together an ambitious plan to expand the marina within the town, and create the potential for a centre of excellence for the marine industry sector in Wales. Unfortunately, the plans were turned down by local councillors , despite support from local people in Pwllheli. Since that time, we have seen the moral authority of those councillors who voted against the marina undermined by their decision to grant planning permission for the massive development at the Victoria Dock in Cae...

Excellent evening at the Cardiff Business Club last night with Michael Moritz , a Cardiffian who helped to develop Google and Yahoo and who is rated as one of the top venture capitalists in the World. One of the best quotes about him is the quote from one of the US techie websites which states "He's Welsh, so he's always dressed a bit more snappily than the normal tech layperson, which is a good thing". Obviously the writer has never met the First Minister! Michael Moritz gave a poignant and thought-provoking speech about how the world had changed since he left Wales in 1973. Perhaps the biggest shock of the evening was his statement that YouTube - currently worth a small fortune - was only started two years ago and that Google was just over 400 months old! According to Moritz, one of the most important lessons for Wales is to invest in its young scientists and encourage physics, chemistry and maths in our schools as that is where the future super start-ups will come ...

Last Wednesday, I was ‘sensationally’ quoted in the Western Mail’s sister paper , the Daily Post, as calling the Assembly's development fund - Finance Wales - 'loan sharks' at an event in North Wales. Actually, I never said those exact words and was, in any case, repeating a story from a businessman in South Wales whose firm was being charged over 15 per cent for a loan from Finance Wales and who had described the practice as a form of ‘loan sharking’. I also recently discussed this issue with a North Wales entrepreneur whose business was being charged 17 per cent by Finance Wales for a loan as well as additional arrangement fees. As a loan shark is defined in the Chambers Dictionary as "a person who lends money at an exorbitant rate of interest", perhaps it is not surprising that some entrepreneurs chose to describe their experiences in this way to me. Indeed, since the story broke, I have had numerous individuals call me to say the situation has gotten out of ha...

Before we all get excited at the prospects of lower inheritance tax, let us take a step back and examine what the wealth creators in this country think about the changes that will drmataically alter their business. It does not make happy reading. The changes in taper relief, increase in corporation tax, adjustments to definition of family business and the powers for councils to charge extra rates will seriously affect the overall growth of the economy which is more reliant on the 4.5 million small firms struggling to make a living than the equity houses part of this tax change is supposed to impact on. So much for encouraging an entrepreneurial economy.

Yesterday, the Chancellor of the Exchequer announced the Comprehensive Spending Review in the House of Commons, an event which he has brought forward and which will spell out the Government’s spending plans for the next three years. Given the events of this weekend over his decision not to go to the country, this exceptionally important statement was in danger of being overshadowed by the ‘non-election’ fallout and yet for Wales, it was probably the most important political event since the Assembly election. This is because, despite devolved powers, the politicians in London still hold the purse strings when it come to Assembly spending and essentially determine whether, all things being equal, we can allocate additional funding to develop our schools, save our local hospitals from closure and improve local services. Since devolution, the Labour Government in Westminster has poured billions of pounds into Wales. The amount of funding received by Cardiff Bay has increased from £8 billio...

Governments have recognised that one of the main contribution of the small firm to economies around the world may be in the creation of employment. This began with work by the American economist David Birch during the late 1970s, who demonstrated that large firms, despite their influence on the volume and nature of world trade, could not be regarded as the only major source of new jobs, and that this role was increasingly falling to the small firm sector His research contradicted the assumptions of most businesses and governments during the 1960s and 1970s that healthy big business meant a healthy economy, predominantly because of the assumed efficiency of large firms through the use of economies of scale to keep down costs. As a result, doubts were raised about the policies, pursued by Western governments of all political persuasion, of encouraging mergers between companies to form large corporations, keeping afloat large companies in trouble, and attracting large firms to economicall...

Two thirds of Wales, along with many of the former Soviet Bloc countries, is classed as one of the poorest regions in the European Union. This why we have qualified for yet another round of funds from the European Commission, after receiving £1.3 billion of Objective 1 money during the period 2000-2006. Counties such as Anglesey, Torfaen, Swansea and Pembrokeshire are classed as economically poor as Poland, Hungary and the Czech Republic. Whilst the aim of this financial bonanza from Europe was to increase prosperity across the poorest parts of Wales, the evidence, to date, is mixed as to whether that has been achieved. Nevertheless, a partial success of this programme has been to get more people who have previously not worked into employment, albeit within lower paid jobs than expected. However, whilst thousands of jobs have been created, the overall prosperity of the area continues to fall relative to the UK. How can this make sense? If we are getting more people into jobs, then sure...