In my spare time during the last few months, I have been working with colleagues in Cardiff University to examine the development of innovation through the utilisation of European Structural Funding within the Objective 1 region West Wales and the Valleys.
Unfortunately, the findings to date suggest that there is no real evidence of a step-change in innovation capacity and performance within Wales.
Whilst £284 million of innovation projects were supported over a period of five years, the key targets in terms of new jobs, upskilling and new businesses were not achieved.
For example, the target of 5,000 gross new jobs by the end of the programme looks unlikely to be reached, with only 24 per cent of the target (or 1192 new jobs) having been achieved.
In terms of training places, there has been a considerable shortfall in the number of employees helped through the programme. To date, 6,203 individuals have been assisted, as compared to a target of 15,000 by the end of 2008. With regard to gross new companies in high-technology sectors, a target of 2,000 was established, although only 399 (or 20 per cent of the target) have been created to date.
Therefore, the Objective 1 programme has failed to achieve some its key targets in raising the innovation potential of West Wales and the Valleys.
Certainly, it should be argued that some of the capital projects funded through Objective 1 funds, such as the Technium initiative, are long term investments that will help develop a stronger innovation infrastructure linking university and industry. However, the failure of the various innovation projects in reaching their human capital targets is extremely worrying. Whether this is a result of inadequate learning initiatives is uncertain but any successful regional economy cannot operate effectively without the necessary quality in the people who are developing innovation within the public and private sectors.
Increasing the capacity of businesses to develop their own capability in managing innovation successfully is a major element of successful small nations such as Finland, Ireland and Iceland. The focus of the Assembly Government on achieving ‘tick box’ business support targets rather than improving the quantity and quality of innovation employment is worrying and could affect the capacity of West Wales and the Valleys to successfully improve its innovation potential during the future.
To a large extent, this reflects a failure to address the disconnectivity between public sector funding and private sector interests. Therefore, for policymakers, one of the key lessons to be learnt from the development of innovation potential within the previous Objective 1 programme is that there needs to be far greater engagement with the private sector in any future innovation strategy for the new convergence funds that will run from 2007-2013.
Whilst important, creating a greater knowledge-base within universities will not, in itself, enable the Objective 1 areas of Wales to take a jump in innovation performance unless there are closer partnerships with business to improve its R&D performance and the overall innovation potential within Wales.
Part of this approach may require the creation of better incentives to encourage industry to invest in the research base in Wales to stimulate higher education institutions to respond to the needs of the industrial and service sectors in the interest of wealth creation and employment in Wales.
Of course, some economists have argued that the low level of innovation is due to a lack of demand from the business community to interact and make use of the knowledge-based services of the higher education sector. Having worked alongside hundreds of Welsh businesses during the last decade, I cannot agree with that conclusion as many businesses are keen to use universities to improve their competitive position and therefore greater effort is needed to ensure that future support programmes focus on enabling better relationships between the two sectors.
The Assembly Government’s economic development strategy document “A Winning Wales” has made it clear that it is necessary to “encourage and finance more high calibre research and development with commercial potential and work to increase existing collaboration between universities and colleges and companies in Wales”.
To achieve this, there must be a different approach to supporting innovation and not just repeating the same policy initiatives which have largely failed to attain the targets within the previous Objective 1 programme. Certainly, there needs to be an imperative that government, business and academia work more closely together as part of the development of an innovative economy and not operate in isolation or, even worse, in competition, if Wales is to improve its innovation performance over time.
Unfortunately, the findings to date suggest that there is no real evidence of a step-change in innovation capacity and performance within Wales.
Whilst £284 million of innovation projects were supported over a period of five years, the key targets in terms of new jobs, upskilling and new businesses were not achieved.
For example, the target of 5,000 gross new jobs by the end of the programme looks unlikely to be reached, with only 24 per cent of the target (or 1192 new jobs) having been achieved.
In terms of training places, there has been a considerable shortfall in the number of employees helped through the programme. To date, 6,203 individuals have been assisted, as compared to a target of 15,000 by the end of 2008. With regard to gross new companies in high-technology sectors, a target of 2,000 was established, although only 399 (or 20 per cent of the target) have been created to date.
Therefore, the Objective 1 programme has failed to achieve some its key targets in raising the innovation potential of West Wales and the Valleys.
Certainly, it should be argued that some of the capital projects funded through Objective 1 funds, such as the Technium initiative, are long term investments that will help develop a stronger innovation infrastructure linking university and industry. However, the failure of the various innovation projects in reaching their human capital targets is extremely worrying. Whether this is a result of inadequate learning initiatives is uncertain but any successful regional economy cannot operate effectively without the necessary quality in the people who are developing innovation within the public and private sectors.
Increasing the capacity of businesses to develop their own capability in managing innovation successfully is a major element of successful small nations such as Finland, Ireland and Iceland. The focus of the Assembly Government on achieving ‘tick box’ business support targets rather than improving the quantity and quality of innovation employment is worrying and could affect the capacity of West Wales and the Valleys to successfully improve its innovation potential during the future.
To a large extent, this reflects a failure to address the disconnectivity between public sector funding and private sector interests. Therefore, for policymakers, one of the key lessons to be learnt from the development of innovation potential within the previous Objective 1 programme is that there needs to be far greater engagement with the private sector in any future innovation strategy for the new convergence funds that will run from 2007-2013.
Whilst important, creating a greater knowledge-base within universities will not, in itself, enable the Objective 1 areas of Wales to take a jump in innovation performance unless there are closer partnerships with business to improve its R&D performance and the overall innovation potential within Wales.
Part of this approach may require the creation of better incentives to encourage industry to invest in the research base in Wales to stimulate higher education institutions to respond to the needs of the industrial and service sectors in the interest of wealth creation and employment in Wales.
Of course, some economists have argued that the low level of innovation is due to a lack of demand from the business community to interact and make use of the knowledge-based services of the higher education sector. Having worked alongside hundreds of Welsh businesses during the last decade, I cannot agree with that conclusion as many businesses are keen to use universities to improve their competitive position and therefore greater effort is needed to ensure that future support programmes focus on enabling better relationships between the two sectors.
The Assembly Government’s economic development strategy document “A Winning Wales” has made it clear that it is necessary to “encourage and finance more high calibre research and development with commercial potential and work to increase existing collaboration between universities and colleges and companies in Wales”.
To achieve this, there must be a different approach to supporting innovation and not just repeating the same policy initiatives which have largely failed to attain the targets within the previous Objective 1 programme. Certainly, there needs to be an imperative that government, business and academia work more closely together as part of the development of an innovative economy and not operate in isolation or, even worse, in competition, if Wales is to improve its innovation performance over time.
Comments
An innovation culture is a tricky thing to foster and it is quite clear that WAG are pretty clueless about how to go about doing it. Certainly, I have always thought that 'Techniums' are a bonkers idea. It seems that they were only built so that a politican can have his/her name on a fancy slate plate (engraved with gold lettering) outside the door to show that they have spent the publics money on something. It shows no understanding whatsoever about the psychology and motivations that drive innovation.