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Showing posts from December, 2009

END OF A DECADE

The last decade has been an interesting one to say the least. With regard to my job, I started it off as a professor at the University of Glamorgan and ended it as a professor at the University of Wales. At the turn of the century, I lived in Newport but now am happily ensconced in my dream home in Cardiff. In 2000, my main focus was solely on writing academic papers and developing research projects in entrepreneurship with not a political bone in my body. How things have changed! I have a fantastic wife who, in 2000, had no interest in politics but who is now standing as parliamentary candidate in next year's Westminster elections. I had a wonderful one year old son at the beginning of the decade and, ten years later, I have a wonderful eleven year old son and a wonderful eight year old son who make my day, every day. Most importantly, I am ten years older and wiser. Indeed, as the noughties end, perhaps the most critical lesson of all from the last ten years is not to take life t...

UNIVERSITY CUTS FOR WALES?

Last week, Lord Mandelson announced a spending cut of £533 million for universities in England which, not surprisingly, has sent shock waves throughout the higher education sector. In his remit letter to the Higher Education Funding Council for England, he declared that the budget for English universities would be cut from £7.81 billion in 2010 to £7.29 billion in 2011. As yet, it has not been confirmed whether this is on top of the £600 million of efficiency savings identified for the university sector in the Pre-Budget report. At a time when youth unemployment has increased to record levels, many are finding it difficult to understand the logic of this announcement. Earlier this month, the number of 16 to 24 year-olds out of work in the UK increased to 952,000 for the three months to October 2009, the highest figure since records began in 1992. Not surprisingly, this issue is becoming a hot political potato. Only recently, the Prime Minister personally assured young jobseekers that n...

LABOUR IN A MESS OVER FAMILY POLICIES

“Families come in all shapes and sizes. We don’t favour one way of family life over another. We don’t dictate one family model as the right sort of family, because no one wants to be told how to run their family life by politicians. Dictating family structures makes those not in the traditional two parent family feel that they are being blamed and their children feel they are being told ‘there is something wrong with your family and so there is something wrong with you’.” Harriet Harman, Dec 8th 2009 “One of the big signifiers of whether children do well is if there are strong adult relationships in the home. We want to look at what more we need to do to support and nurture family relationships.” Ed Balls, Dec 27th 2009 So who is right? Is it the Deputy Leader of the Labour Party or the new de facto deputy to Gordon Brown? That is up to voters to decide but they expect a consistent line from a Government that has spent the last twelve years slagging off the Conservative Party's sup...

RHODRI MORGAN AND THE FIVE MILLION ALREADY LOOKING FOR WORK

Lying in bed with a dose of Christmas flu and feeling generally sorry for myself as men are wont to do, I decided to have a look online at the Western Mail today despite promising not to look at any newspapers. Most prominent was the interview with Rhodri Morgan on the potential state of the UK economy who suggested that there would be over five million out of work if the Conservatives were to come to power next year. Well, I am afraid to say that the former First Minister is already behind the times as this has already happened under the current Labour Government. As a recent article in the Times stated , if we take the official number of UK unemployed at 2.49 million, add the half a million who would like to move from part-time to full-time, and then finally the 2.26 million people who are economically inactive who would like a job, then we already have 5.76 million people who would like to work more - about 15 per cent of the working-age population. I am sure that Rhodri Morgan, a...

UK SLUMP WORSE THAN THE 1980S

Despite a range of economists stating otherwise, the UK economy remains in recession. According to the Office for National Statistics, the British economy shrank by 0.2 per cent in the third quarter, making this one of the worse recessions in history. Indeed, it is now worse than that of the early 1980s when the decimation of manufacturing resulted in a 6 per decline in output. This leaves the UK isolated as one of the few economies not to emerge out of recession in the third quarter. For example, America, China, Japan, France and Germany all returned to positive growth in the third quarter. Even Ireland, which suffered what amounted to a depression, has grown by 0.3 per cent. This seriously undermines the Labour Government's claim that Britain will be in a good position when we eventually emerge out of the recession. Not only are our leading competitors growing but they will be well ahead of us for many years to come unless we come up with a strategy that is pro-enterprise, pro-i...

THE WELSH ECONOMY - MYTHS, FABLES AND FAIRYTALES

When Labour was swept into power in 1997, its leaders promised that a new era of prosperity and equality would sweep through the land. However, twelve years later, what is the reality of the situation? Well, The truth is somewhat different to the political fables that Wales is doing as well as other parts of the UK. Since 1997, Wales has experienced the lowest increase in average full time weekly earnings of any UK region. Whilst UK workers have had an increase in their earnings of 58 per cent, it has only grown by 51 per cent in Wales. As a result, the gap between earnings in Wales and the rest of the UK has actually increased. In 1997, Welsh workers were earning approximately £1800 per year less than the average for the UK in 1997. By 2009, this gap had grown to £4200 per year. Given this, it isn’t surprising that in terms of the overall economy, Wales remains the worst performing region, declining from 80 per cent of the UK’s prosperity in 1997 to 74 per cent in 2008. More shocking...

RESEARCH SPENDING FALLS FURTHER BEHIND IN WALES

A new set of economic statistics was quietly slipped out last week with little comment from either the press or politicians. The latest national statistics on business enterprise research and development (BERD) expenditure for the UK is the basic measure of how well we are doing as an innovative nation. So what were the results for Wales? In cash terms, BERD expenditure for Wales in 2008 was £243m, slightly down on the £244m recorded in 2007. In contrast, BERD expenditure in the UK increased by 1.7% to £15.9bn. However, the results varied across the UK – BERD expenditure increased in cash terms in all but five of the 12 UK regions between 2007 and 2008, with the largest percentage increase in the North West of England (up 11.4%) and the largest reduction in the West Midlands (down 13%). These statistics emphasised, yet again, that Wales remains a small player in the private sector R&D stakes, accounting for roughly 1.5% of the UK total. In contrast, the UK regions with the largest...

RECESSION DENIERS

I remain disappointed at how the BBC seems to continue its meek acceptance of the line from the Welsh Assembly Government about the economy recovering every time unemployment figures are released. Yesterday, the headline was that: 'Unemployment in Wales rises by 9,000 to 125,000, but the economy minister says there are "encouraging signs"' . I don't know which branch of SpecSavers the BBC buy their rose-tinted glasses from, but I would hardly describe the fact that nearly half of the UK increase in unemployment has come from Wales as "encouraging signs". In fact, it is an absolute disaster for the economy. Worst of all, it shows that ProAct - the only instrument which WAG seems to have at its disposal - has had little effect on unemployment figures in Wales, contrary to the line peddled by WAG and supported by the BBC on every occasion. For example, a cursory glance at unemployment statistics at the other parts of the UK that do not have such programm...

FOUR IN TEN OF THE UK UNEMPLOYED ARE FROM WALES

Whilst Peter Hain goes on one of his fantasy rants about what could theoretically happen under a future Conservative Administration , the reality of what is actually happening in Wales under this current Labour Government is clear for all to see. Today's jobs figures show that for the period Aug-Oct 2009, the numbers unemployed increased by 9,000 as compared to the last quarter. Given that the total number of unemployed in the UK increased by only 21,000, this meant that Wales was responsible for OVER 40 PER CENT of the increase in those of out of work during this period. Since Aug-Oct 2007, 56,000 more people are unemployed in Wales, demonstrating that the Labour-Plaid administration have totally failed to get to grips with the economy. Following on from the recent GVA figures that show that Wales remains bottom of the UK's economic league tables, this is a shameful indictment of the way that Labour's policies have failed Wales not only during the last twelve months, but ...

SURRENDERING THE ECONOMIC INITIATIVE

Last week, I was sent a Plaid Cymru leaflet from an anonymous source in North Wales which highlighted the ‘achievements’ of the party in helping to “persuade the Welsh Government to limit the damage caused by the recent business rate revaluation”. Does this mean part of the Welsh Assembly Government (WAG) has finally admitted that its policies have damaged local economies throughout Wales? If so, it is about time, given that, for the last two and a half years, Plaid Cymru has not come up with one meaningful policy to help small business and has slavishly followed the Labour Party’s failed approach to the economy of Wales. Indeed, the abject surrender to the policies pursued under labour during 2003-2007 has meant that the Welsh economy has continued its spiral of decline. Nowhere is this more apparent than in the policy over business rates. The truth over business rates is that simply has not been any meaningful poliyc development. Instead of examining the impact of business rates on W...

TAKING THE BEST OF WALES TO THE WORLD

Last week, I wrote about how Wales had experienced a decline in the number of new businesses since the Entrepreneurship Action Plan and the Welsh Development Agency were abolished four years ago. Whilst entrepreneurship is critical in developing a coherent economic strategy, it is not the only solution for the problems facing the Welsh economy. In an increasingly globalised economy, Wales cannot be isolated from what is going on in the rest of the world and it is critical that the right level of commitment and resources are in place to support international business activities. However, it would seem that, as with entrepreneurship policy, there has been a major cut in the level of support provided by the Welsh Assembly Government to attract business into Wales as well as increasing the country’s exports and promoting Welsh business abroad. A recent review into the activities of International Business Wales (IBW) showed that since 2005, staffing has been reduced from about 200 to 137 - ...

THE WELSH PETER MANDELSON?

Having read some the commentariat’s response to Carwyn Jones’ new cabinet, I am surprised how much of the focus has been on Edwina Hart’s position in the photoshoot rather than what this will do for Wales. Certainly, one of the issues that seems to have passed many people by is the change in the Deputy Ministers’ portfolios. Under the previous Cabinet, it was generally agreed that Leighton Andrews did more than expected with his position as Deputy Minister for Regeneration, driving forward key projects on the ground that had made a tangible difference to local economies and generally overshadowing Ieuan Wyn Jones. Indeed, the Cardiff Bay rumour mill seems to suggest that whilst civil servants in DET were generally ambivalent towards the Plaid’s leader authority, they would all chorus together "how high" when asked to jump by Mr Andrews (which happened frequently). Many do not like Mr Andrews' abrasive and confrontational style and whilst I have been subject to it once in ...

PARTY POOPER

As Rhodri Morgan walks off into the sunset of retirement, what will be his legacy to Wales? Given that his area of expertise was economic development, it is ironic that following his last day in the job, the latest GVA figures for Wales were released by the Office for National Statistics. As has happened every year since he was elected as First Minister, Wales was again at the bottom of the prosperity league table. Not surprisingly, the statistics show that during the last ten years, the nation's prosperity relative to the rest of the UK has continued to decline, despite the so-called 'devolution dividend' and billions of pounds of additional European funding. Since 1999, the GVA in Wales has grown by only 47.5 per cent as compared to 57.6 per cent for the UK as a whole. If the Welsh economy had kept pace with the UK average, then an additional £3.1 billion would have been generated during this period. In terms of prosperity per head, Wales now stands at 74.3 per cent of...

PLUS CA CHANGE

Having just got back from Hong Kong this morning, I hadn't managed to make a cup of tea before an email came through about Mohammed Asghar's 'crossing of the floor' to the Welsh Conservatives. Considering the over-reaction on the Welsh blogosphere to an event that happens with regularity in most other democratically elected institutions, I just wonder what the reaction would have been if it had been a Conservative AM defecting to Plaid Cymru? Anyway, politics aside, it would seem that in the important business of the Welsh economy, nothing much changes. For example, yet another Welsh Assembly Government contract - this tiem from DCELLs - has gone outside of Wales, this time to a Manchester-based advertising company to undertake a campaign to support the take-up of apprenticeships in Wales. Given that we have excellent companies such as Freshwater, Golley Slater and a host of other marketing firms here in Wales, you have to wonder what is going on, especially as I doubt ...

NUMBER OF NEW BUSINESSES PLUMMETS IN WALES

Last week, a new set of statistics were published on business demography i.e. the births, deaths and stock of firms in the UK. This has replaced the VAT data that was previously used to examine new firm formation. The result is that the new dataset is more accurate as it includes those businesses currently not registered for VAT. Having examined this new dataset last week, I was shocked by the data on new business births for Wales. It showed that during the period 2004-2008, the average decline in the number of new business births across the UK as a whole was 3.5 per cent. In contrast, the decline in Wales was 19.4 per cent - the worst performance of any region of the UK, with the next worst result found in the South West of England with a decline of 12.8 per cent. The data also showed some regions had increased the number of new businesses. For example, the number of new firm starts in Scotland had actually increased over this five year period by 13.7 per cent. The catastrophic declin...

POSTCARD FROM HONG KONG - DAY FOUR

Yesterday was too busy for blogging but the visit has continued to be successful with meetings at the University of Hong Kong and the Chinese University of Hong Kong. There was great enthusiasm for collaboration between Wales and the faculties of science and engineering at the University of Hong Kong, which is ranked 24th in the World. Certainly, there is an openness here for the sharing of international expertise and this could help us develop the Global Academy project beyond just the Prince of Wales Innovation Scholarships. The meetings at the Chinese University (pictured above) were also successful, especially given the fact that the institution has four nobel prize winners, including Charles Kao , the father of the fibre cable. Given the importance of optoelectronics to the Welsh economy, I am hoping that academic-industrial links can be built with this great university. As it is now 7pm in Hong Kong, I am off for a beer with one of my best friends, Dr Charles Li. As he is current...

POSTCARD FROM HONG KONG - DAY TWO

Had a very long day at the Hong Kong University of Science and Technology today, which started at 8.30am and finished twelve and a half hours later! The meetings with senior members of the university management, as well as heads of faculty, were terrific, with a great enthusiasm for collaboration and co-operation in the future. The day ended quite differently than I expected with an invitation to give a lecture on entrepreneurship to the executive MBA class. Fortunately, I had a presentation on the Fast Growth 50 to present to the class and in the inevitable Welsh way, went half an hour over my allotted time. UKHST's programme is ranked as No 1 in the world by the Financial Times and it was a real pleasure to discuss the challenges facing growth companies with a group of students who will be the leaders of industry in this region in a few years time. Even if they didn't learn anything from the lecture, they at least now know about Wales! Tomorrow, I visit the University of Hong...

POSTCARD FROM HONG KONG

Have arrived in Hong Kong for the second of my visits to one of the most dynamic regions of the World. This week consists of firming up our burgeoning relationship with some of the major academic institutions in Hong Kong, all of whom are keen to establish a strong partnership with the Global Academy project. These include the University of Hong Kong (ranked 24th in the World), Hong Kong University of Science and Technology (ranked 35th) and the Chinese University of Hong Kong (ranked 42nd). In contrast, the best placed Welsh university on the world rankings is Cardiff (135th), with the others nowhere to be seen. Perhaps that is something for the new First Minister in waiting in Wales to ponder, especially given his emphasis on the importance of developing higher education's economic contribution during his leadership campaign.