It would seem that Alistair Darling has finally given into pressure from the various business lobby groups and will not implement a five per cent increase in business rates in England although firms will still face a two per cent increase.
However, as pointed out in the blog entry yesterday and in the Western Mail on Saturday, business rates is a devolved matter.
The question is whether the Assembly will, as in the past, blindly follow the Chancellor's decision or will finally do the right thing and refuse any increase in business rates at all for this year.
With this decision, the Assembly has finally been given the opportunity to do something different to England in terms of fiscal policy.
For the sake of businesses across Wales, let's hope it does.
Tuesday, March 31, 2009
Monday, March 30, 2009
Business rates
As readers of this blog will know by now, I am a passionate supporter of reducing business rates for small firms in Wales.
In devolution terms, it is the only real financial instrument available to the Welsh Assembly Government and whilst it does not have power to reduce corporation tax, it does have responsibility for business rates which affects every single business in our economy.
Therefore, at a time when analysts predict that Wales is one of the UK regions that will take longest to come out recession, why do we have the grotesque spectacle of ministers within our Assembly Government announcing that business rates will be raised by a minimum of five per cent in April?
Why does the Assembly Government, which has the power to do things differently, meekly follow the line of the UK Government at a time when every pound saved is critical to the survival of businesses throughout this nation?
This would have been expected from those Labour politicians who penalised thousands of small firms across North Wales when they abolished the rural rate relief scheme before the last Assembly election.
However, there can be no excuse for their coalition partners Plaid Cymru who made the reduction of business rates the central plank of the radical but realistic economic manifesto written by Dafydd Wigley.
Sadly, that manifesto commitment, like the promises to establish a Welsh language newspaper and support student top up fees, has been sacrificed on the altar of political power to the extent that there is no visible difference between the policies of this coalition government and the last Labour administration.
Even if they cannot fulfil their election promise to radically reduce business rates across Wales, then nationalist ministers could at least lobby their cabinet colleagues to stop the 5 per cent increase which will disproportionately affect small businesses in every community across the land.
However, given their track record to date, it seems unlikely that their political partners will listen.
There is not a week that goes by when the Assembly Government claims that it has listened to businesses at the various economic summits held up and down the land over the last five months. Yet how many of the small businesses at the heart of every community in North Wales, such as the local greengrocer, butcher, shopkeeper, baker or pub owner, will actually benefit from any of the grand schemes announced?
The Assembly Government would argue that it introduced a £7 million rate relief scheme last autumn to help small firms in Wales. Yet, compare this sum to the £48 million which will be handed to large manufacturing companies across Wales under the ProAct scheme.
Worse still, think of the £290 million that is spent on the bloated bureaucracy that makes up our so-called business support sector in Wales, a sector that has been reorganised so often and given so many different names that many businesses are clueless about what can be done to help them.
Perhaps, as a prominent businessperson said to me last week, the time has come to give a large part of the hundreds of millions spent on business support directly to businesses through cutting their rates. At least they could then choose how to spend their own money in developing their business.
Those of us who support devolution do so partly because it gives us the opportunity to have different policies to those across the border. Wales, with a larger proportion of smaller businesses than England, should focus its economic policies on directly supporting its small firm sector at a time when it needs it the most.
In devolution terms, it is the only real financial instrument available to the Welsh Assembly Government and whilst it does not have power to reduce corporation tax, it does have responsibility for business rates which affects every single business in our economy.
Therefore, at a time when analysts predict that Wales is one of the UK regions that will take longest to come out recession, why do we have the grotesque spectacle of ministers within our Assembly Government announcing that business rates will be raised by a minimum of five per cent in April?
Why does the Assembly Government, which has the power to do things differently, meekly follow the line of the UK Government at a time when every pound saved is critical to the survival of businesses throughout this nation?
This would have been expected from those Labour politicians who penalised thousands of small firms across North Wales when they abolished the rural rate relief scheme before the last Assembly election.
However, there can be no excuse for their coalition partners Plaid Cymru who made the reduction of business rates the central plank of the radical but realistic economic manifesto written by Dafydd Wigley.
Sadly, that manifesto commitment, like the promises to establish a Welsh language newspaper and support student top up fees, has been sacrificed on the altar of political power to the extent that there is no visible difference between the policies of this coalition government and the last Labour administration.
Even if they cannot fulfil their election promise to radically reduce business rates across Wales, then nationalist ministers could at least lobby their cabinet colleagues to stop the 5 per cent increase which will disproportionately affect small businesses in every community across the land.
However, given their track record to date, it seems unlikely that their political partners will listen.
There is not a week that goes by when the Assembly Government claims that it has listened to businesses at the various economic summits held up and down the land over the last five months. Yet how many of the small businesses at the heart of every community in North Wales, such as the local greengrocer, butcher, shopkeeper, baker or pub owner, will actually benefit from any of the grand schemes announced?
The Assembly Government would argue that it introduced a £7 million rate relief scheme last autumn to help small firms in Wales. Yet, compare this sum to the £48 million which will be handed to large manufacturing companies across Wales under the ProAct scheme.
Worse still, think of the £290 million that is spent on the bloated bureaucracy that makes up our so-called business support sector in Wales, a sector that has been reorganised so often and given so many different names that many businesses are clueless about what can be done to help them.
Perhaps, as a prominent businessperson said to me last week, the time has come to give a large part of the hundreds of millions spent on business support directly to businesses through cutting their rates. At least they could then choose how to spend their own money in developing their business.
Those of us who support devolution do so partly because it gives us the opportunity to have different policies to those across the border. Wales, with a larger proportion of smaller businesses than England, should focus its economic policies on directly supporting its small firm sector at a time when it needs it the most.
Sunday, March 29, 2009
Who cares?
Having just come back from another week in Finland, I seemed to have missed all the fun and furore over the "aneurin glyndwr" website established by members of the Welsh Labour Party.
The question is whether anyone cares outside of the Cardiff Bay/Eli Jenkins political bubble and, for that matter, the Welsh political blogosphere?
I very much doubt it, although those who live by the media (or multimedia) sword.....
The question is whether anyone cares outside of the Cardiff Bay/Eli Jenkins political bubble and, for that matter, the Welsh political blogosphere?
I very much doubt it, although those who live by the media (or multimedia) sword.....
Thursday, March 26, 2009
So much for a small clever country
An article in this week's Times Higher shows that Welsh universities are falling behind their English counterparts in terms of research funding.
According to the academics' trade paper
"Universities in Wales have been left aggrieved by the news that this year's increase in research funding is half that enjoyed by English institutions. Concerns have been raised by individual universities and by their representative body Higher Education Wales (HEW) that last week's grant allocations will leave them struggling to compete.
Whereas research funding for English universities has increased by 8 per cent for the next academic year, their counterparts in Wales received a rise of 4 per cent. The biggest loser was Cardiff University, which got £2.2 million less for research, while the largest percentage increases in research money went to teaching-led institutions such as Swansea Metropolitan University. Teresa Rees, pro vice-chancellor for research at Cardiff, warned that the difference between the settlements would hit Welsh institutions hard. She said: "This is no time to be having a funding gap."
However, that's not the end of it as it would seem that the Assembly and its quango, the Higher Education Funding Council, may be preparing to cut funding even further, thus widening the gap with English institutions still further
"On top of the individual woes of some Welsh institutions, it has emerged this week that the sector's funding allocations may not be as solid as they seem. A caveat in the 2009-10 grant letter says it is possible that funding could change. David Blaney, the HEFCW's director of strategic development, said the clause was linked to "general economic circumstances" and that the sector was being alerted to the "possibility" and not "probability" of any change. Even so, this prospect worried some, who said any change would be a cut in funding.
So much having a clear policy to support the development of a "small clever country" and this in a week where business leaders have called for companies not to abandon training.
Shame that the Assembly Government sees so little merit in supporting the engines of the knowledge-based economy that we will need to get out of recession quickly.
According to the academics' trade paper
"Universities in Wales have been left aggrieved by the news that this year's increase in research funding is half that enjoyed by English institutions. Concerns have been raised by individual universities and by their representative body Higher Education Wales (HEW) that last week's grant allocations will leave them struggling to compete.
Whereas research funding for English universities has increased by 8 per cent for the next academic year, their counterparts in Wales received a rise of 4 per cent. The biggest loser was Cardiff University, which got £2.2 million less for research, while the largest percentage increases in research money went to teaching-led institutions such as Swansea Metropolitan University. Teresa Rees, pro vice-chancellor for research at Cardiff, warned that the difference between the settlements would hit Welsh institutions hard. She said: "This is no time to be having a funding gap."
However, that's not the end of it as it would seem that the Assembly and its quango, the Higher Education Funding Council, may be preparing to cut funding even further, thus widening the gap with English institutions still further
"On top of the individual woes of some Welsh institutions, it has emerged this week that the sector's funding allocations may not be as solid as they seem. A caveat in the 2009-10 grant letter says it is possible that funding could change. David Blaney, the HEFCW's director of strategic development, said the clause was linked to "general economic circumstances" and that the sector was being alerted to the "possibility" and not "probability" of any change. Even so, this prospect worried some, who said any change would be a cut in funding.
So much having a clear policy to support the development of a "small clever country" and this in a week where business leaders have called for companies not to abandon training.
Shame that the Assembly Government sees so little merit in supporting the engines of the knowledge-based economy that we will need to get out of recession quickly.
Tuesday, March 24, 2009
G20, egos and a monumental waste of money
A marvellous article by Simon Jenkins in the Evening Standard today, which condemns the whole fiasco that has become the G20 summit.
As he writes
"A day and a half of summitry, parroting meetings held by the same participants every month, will cost Londoners £7 million in police overtime and a further £12 million in other costs. That is apart from the disruption. The event displays the Olympian extravagance now typical of many public-sector events, undimmed by a concern for recession, decorum or economy. One firm is reported to have been paid £6 million for fitting out the chamber for two days. A project co-ordinator and two "delivery co-ordinators" are being paid £200,000, and an obscurely titled "content writer" £27,000. If a minister ever tells you he is too short of money for a clinic or drug centre, cite these figures."
At least it will give the Prime Minister the opportunity to say that he has saved the World (again).
As he writes
"A day and a half of summitry, parroting meetings held by the same participants every month, will cost Londoners £7 million in police overtime and a further £12 million in other costs. That is apart from the disruption. The event displays the Olympian extravagance now typical of many public-sector events, undimmed by a concern for recession, decorum or economy. One firm is reported to have been paid £6 million for fitting out the chamber for two days. A project co-ordinator and two "delivery co-ordinators" are being paid £200,000, and an obscurely titled "content writer" £27,000. If a minister ever tells you he is too short of money for a clinic or drug centre, cite these figures."
At least it will give the Prime Minister the opportunity to say that he has saved the World (again).
Monday, March 23, 2009
EU contradicts Brown's policies
If there was evidence that Europe will not follow Gordon Brown's high spending policies, it came from the European Commission today which set deadlines for the UK (which is outside the eurozone) to rein in its budget deficit.
I wonder whether the EU representative at the G20 summit will reiterate this call and make the case for less public expenditure by governemnts globally.
More importantly, I wonder how the PM will react to this, especially as it would seem that no-one in Europe is following his policies.
I wonder whether the EU representative at the G20 summit will reiterate this call and make the case for less public expenditure by governemnts globally.
More importantly, I wonder how the PM will react to this, especially as it would seem that no-one in Europe is following his policies.
Delay in Government schemes is costing jobs and homes
Last week, we saw the level of unemployment go over 2 million for the first time in over twelve years, with forecasters expecting it to hit 3 million by 2010.
In Wales, the number of those out of work has reached 109,000, an increase of 57 per cent since last year, which is worse than any other region.
This follows the International Monetary Fund's announcement that the UK faces a worse recession than the USA and Europe and that it will take up to a decade for employment in Wales to get back to pre-recession levels.
In addition, average earnings, including bonuses, rose only 1.8 per cent in the last twelve months, the lowest annual rise since records began in 1991.
As would be expected in the middle of such a crisis, we have had scheme after scheme announced by the UK Government to try and alleviate the pain felt by families and businesses across the land. However, despite the grand announcements by Ministers, it seems that very little is actually happening.
Take, for example, the working capital scheme announced by Lord Mandelson. This is meant to guarantee credit lines to businesses by providing banks with guarantees covering 50 per cent of the risk on existing and new loans. It was announced on the 14th of January 2009 and would cost £10 billion.
This is clearly a worthwhile project to get credit flowing to businesses again, although it is well below the £50 billion wanted by the Conservatives. Two months later, the scheme is still not active and, as a result, thousands of businesses will face closure if it is not implemented urgently.
There is also the Homeowner Mortgage Support Scheme, which has been designed to help households who experience a redundancy, and who will be able to defer a proportion of their interest payments for up to two years. This was announced on the 3rd December by Gordon Brown on the day of the Queen's Speech. However, despite the UK having the highest number on record of people signing on, it seems likely that this will not be available until April at the earliest.
This prevarication by politicians is set against a backdrop where the number of business failures will increase by 59% to 36,000 in 2009, and there has been a 68% jump in the number of homes repossessed in 2008 as compared to the previous year, with the number of those struggling to pay their mortgage growing by almost 5,000 per week.
What on earth is going on?
With hundreds of businesses closing every week and thousands of hard working families facing being thrown out of their homes, it would seem that ministers are content to take their time over policies that could, and should, have been implemented immediately.
I am not too sure whether it has penetrated the bubble that is the Westminster and Whitehall village but we are facing a national emergency that could seriously damage the economy of this country for the next decade, if not longer.
The more time that is taken to deal with these fundamental problems facing businesses and families, the more time it will take to get this country back on its feet.
Instead of talking about it, the government should instead focus every effort on putting into place those measures that will save jobs and enable families across the UK to keep their homes. If it does not, then the consequences for this country will be worse than anyone expects.
In Wales, the number of those out of work has reached 109,000, an increase of 57 per cent since last year, which is worse than any other region.
This follows the International Monetary Fund's announcement that the UK faces a worse recession than the USA and Europe and that it will take up to a decade for employment in Wales to get back to pre-recession levels.
In addition, average earnings, including bonuses, rose only 1.8 per cent in the last twelve months, the lowest annual rise since records began in 1991.
As would be expected in the middle of such a crisis, we have had scheme after scheme announced by the UK Government to try and alleviate the pain felt by families and businesses across the land. However, despite the grand announcements by Ministers, it seems that very little is actually happening.
Take, for example, the working capital scheme announced by Lord Mandelson. This is meant to guarantee credit lines to businesses by providing banks with guarantees covering 50 per cent of the risk on existing and new loans. It was announced on the 14th of January 2009 and would cost £10 billion.
This is clearly a worthwhile project to get credit flowing to businesses again, although it is well below the £50 billion wanted by the Conservatives. Two months later, the scheme is still not active and, as a result, thousands of businesses will face closure if it is not implemented urgently.
There is also the Homeowner Mortgage Support Scheme, which has been designed to help households who experience a redundancy, and who will be able to defer a proportion of their interest payments for up to two years. This was announced on the 3rd December by Gordon Brown on the day of the Queen's Speech. However, despite the UK having the highest number on record of people signing on, it seems likely that this will not be available until April at the earliest.
This prevarication by politicians is set against a backdrop where the number of business failures will increase by 59% to 36,000 in 2009, and there has been a 68% jump in the number of homes repossessed in 2008 as compared to the previous year, with the number of those struggling to pay their mortgage growing by almost 5,000 per week.
What on earth is going on?
With hundreds of businesses closing every week and thousands of hard working families facing being thrown out of their homes, it would seem that ministers are content to take their time over policies that could, and should, have been implemented immediately.
I am not too sure whether it has penetrated the bubble that is the Westminster and Whitehall village but we are facing a national emergency that could seriously damage the economy of this country for the next decade, if not longer.
The more time that is taken to deal with these fundamental problems facing businesses and families, the more time it will take to get this country back on its feet.
Instead of talking about it, the government should instead focus every effort on putting into place those measures that will save jobs and enable families across the UK to keep their homes. If it does not, then the consequences for this country will be worse than anyone expects.
Saturday, March 21, 2009
Will Irish eyes be smiling?
Today, we welcome our Celtic cousins from Ireland to what promises to be a fantastic rugby match and an occasion for all of us to savour, whatever the result.
Like long-lost cousins, the tens of thousands of fans coming over to Cardiff will be given a welcome they will never forget.
Old acquaintances will be renewed and new friendships made as our teams battle it out for the Triple Crown and the Six Nations Championship, although it is likely that the Irish economy will not be the most popular topic of conversation over a pint or two of Guinness this weekend.
Despite the success of the previous 15 years when Ireland surpassed the economic growth rates of the rest of Europe and attracted the presence of a range of global giants such as Microsoft, Google and Intel, the recent recession has hit the Emerald Isle hardest of all during the past six months.
On St Patrick’s Day, the Irish Finance Minister warned that the effects of a domestic housing crisis feeding into the banking system had resulted in a situation where “Ireland is facing a very difficult recession, somewhat worse than the rest of the world”.
Indeed, he predicted that the Irish economy could contract by up to 6.5% in 2009 and that unemployment would rise to 12%. In addition, tax revenues are down 28% on what they were two years ago and government spending is likely to be 49% of gross national product as compared to 55% in the mid-1980s when Ireland was one of the poorest nations in Europe.
The question, of course, is how the Irish get themselves out of this hole.
According to the government think-tank, the National Economic and Social Council (NESC), they can take comfort from the fact that other small countries, such as Sweden, Denmark, Finland and the Netherlands, have suffered similar problems in the past but went on to recover quickly, thanks mainly to a commitment to innovation, radical reform of the public sector and social solidarity.
As every Welsh rugby fan knows, the battling spirit of the Irish, especially when they seem down and out, is what gives them unexpected victories and it is something the Welsh team must look out for on the pitch today.
Given this, it should be no surprise that the Irish Government, rather than waiting for the recession to take its course, has come out fighting with an ambitious plan to transform innovation within their nation and put them into a position for sustained growth when the recovery starts.
For example, in an announcement last week, the Irish Government announced that it would establish an Innovation Taskforce which will examine options to increase levels of innovation and the rates of commercialisation of research and development in Ireland, accelerating the growth and scale-up of indigenous enterprise and attracting new knowledge-intensive direct investment.
It will also provide 350 million euro to create a new Innovation Academy to help develop the new type of business-ready and innovative graduate to ensure Ireland remains an attractive destination for multinational investment and, more importantly, to turn academic ideas into new businesses.
It is estimated that this new project could create 40,000 highly paid jobs within the economy.
It is an audacious move and, critically for the Irish economy, sends a signal to the international business community that Ireland is open for business and that it aims to develop a strong culture of innovation and build on the entrepreneurial skills of its biggest assets, its highly educated workforce.
As the global recovery starts next year, having such an infrastructure in place could mean that large multinational companies will again look to Ireland as their base for Europe, especially in key areas such as life sciences and ICT.
Like all Welshmen, I am hoping that the Irish will be valiantly defeated in today’s attempt to take the championship away from our rugby team.
However, in the wider playing fields of the world economy, I am sure many of you will join me in wishing the Irish every success with their bold gamble to rejuvenate the Celtic Tiger into an entrepreneurial and innovative nation.
Like long-lost cousins, the tens of thousands of fans coming over to Cardiff will be given a welcome they will never forget.
Old acquaintances will be renewed and new friendships made as our teams battle it out for the Triple Crown and the Six Nations Championship, although it is likely that the Irish economy will not be the most popular topic of conversation over a pint or two of Guinness this weekend.
Despite the success of the previous 15 years when Ireland surpassed the economic growth rates of the rest of Europe and attracted the presence of a range of global giants such as Microsoft, Google and Intel, the recent recession has hit the Emerald Isle hardest of all during the past six months.
On St Patrick’s Day, the Irish Finance Minister warned that the effects of a domestic housing crisis feeding into the banking system had resulted in a situation where “Ireland is facing a very difficult recession, somewhat worse than the rest of the world”.
Indeed, he predicted that the Irish economy could contract by up to 6.5% in 2009 and that unemployment would rise to 12%. In addition, tax revenues are down 28% on what they were two years ago and government spending is likely to be 49% of gross national product as compared to 55% in the mid-1980s when Ireland was one of the poorest nations in Europe.
The question, of course, is how the Irish get themselves out of this hole.
According to the government think-tank, the National Economic and Social Council (NESC), they can take comfort from the fact that other small countries, such as Sweden, Denmark, Finland and the Netherlands, have suffered similar problems in the past but went on to recover quickly, thanks mainly to a commitment to innovation, radical reform of the public sector and social solidarity.
As every Welsh rugby fan knows, the battling spirit of the Irish, especially when they seem down and out, is what gives them unexpected victories and it is something the Welsh team must look out for on the pitch today.
Given this, it should be no surprise that the Irish Government, rather than waiting for the recession to take its course, has come out fighting with an ambitious plan to transform innovation within their nation and put them into a position for sustained growth when the recovery starts.
For example, in an announcement last week, the Irish Government announced that it would establish an Innovation Taskforce which will examine options to increase levels of innovation and the rates of commercialisation of research and development in Ireland, accelerating the growth and scale-up of indigenous enterprise and attracting new knowledge-intensive direct investment.
It will also provide 350 million euro to create a new Innovation Academy to help develop the new type of business-ready and innovative graduate to ensure Ireland remains an attractive destination for multinational investment and, more importantly, to turn academic ideas into new businesses.
It is estimated that this new project could create 40,000 highly paid jobs within the economy.
It is an audacious move and, critically for the Irish economy, sends a signal to the international business community that Ireland is open for business and that it aims to develop a strong culture of innovation and build on the entrepreneurial skills of its biggest assets, its highly educated workforce.
As the global recovery starts next year, having such an infrastructure in place could mean that large multinational companies will again look to Ireland as their base for Europe, especially in key areas such as life sciences and ICT.
Like all Welshmen, I am hoping that the Irish will be valiantly defeated in today’s attempt to take the championship away from our rugby team.
However, in the wider playing fields of the world economy, I am sure many of you will join me in wishing the Irish every success with their bold gamble to rejuvenate the Celtic Tiger into an entrepreneurial and innovative nation.
Friday, March 20, 2009
Pawb a'i Farn
As someone who dreads doing live TV but enjoys the experience afterwards, it could be argued that there I suffer from some strain of delayed media masochism.
I experienced that feeling again last night when I was honoured to be a panellist on Pawb a’i Farn.
For those of you who have never appeared on a live show, it can be a daunting experience but one that is highly enjoyable. At the beginning, you are nervously thinking how on earth am I going to be able to last an hour but, by the end, it has become thoroughly enjoyable and the time has, actually, flown by.
The other guests on the show last night were Rhodri Morgan, Dafydd Wigley and Lord Roger Roberts.
To say that Rhodri and I have never seen eye to eye would be an understatement, but no-one can doubt that he has left an indelible impression on Welsh politics.
Probably only Dafydd Wigley – who retired from day-to-day political life in 2003 – could be said to be in the same league and when Rhodri leaves in September, he will undoubtedly leave a large hole in Welsh political life.
Every time, I have met Rhodri in the past, he was always larger than life, had a sparkling wit and would dominate any conversation or room he was in. However, it would clear that the last few years - and the serious heart problems of the summer of 2007 - have begun to take their toll.
To me, he seemed smaller, more diminished and the sparkle was gone. Certainly, the old Rhodri wouldn’t have just come out with stock answers to the questions but would have gone on the attack, especially against the Conservatives. Last night he didn’t, and just seemed tired and ready to retire there and then. Perhaps I just caught him on a bad night but I don't think so, and I am just surprised that no-one else has mentioned this before as it has enormous implications for the leadership of this country at a time when we are going through the worst recession in living memory.
The show was so hectic that one question couldn’t be asked, namely that on the introduction of student fees. However, the young people on the programme were so insistent about the issue that Dewi Llwyd asked all of us to stay on for a further twenty minutes to debate the issue. I am not too sure whether it was recorded but as everyone visibly relaxed after the programme went off air, it was a more enjoyable debate.
My view is quite clear on the subject.
This should never have happened and rather than focusing specifically on how to cut support to students to make up the funding gap in Wales, the Jones review should have examined the wider benefits of free tuition fees to the economy of Wales.
When we keep hearing that we need to create a knowledge-based economy that is based on higher level skills, is this the way forward?
We know there is a £61 million gap in university spending between England and Wales, a gap that the Assembly Government has chosen not to make good.
Instead, they will be taking money away from students to try and make up this difference. It is easy to try and defend the situation and I am surprised how many politicians, including Dafydd Wigley last night, were ready to say that this was necessary.
Surely this is a matter of priorities for the Governemnt. If it believes that education is critical to the future of this nation and that we want to create a small clever country, is this the way forward?
In Scandinavia, which has some of the most competitive small nations in the World, there are no tuition fees paid by students because policymakers in Sweden and Finland have realised that without a highly educated workforce, you cannot create a strong knowledge-based economy.
The Assembly Government currently spends well over a quarter of a billion pounds annually on business support in Wales. Yet, despite having over 1200 civil servants in the Department of Economy administering this money, we remain firmly rooted to the bottom of the UK prosperity league table.
A more radical Assembly Government would have examined whether this money would have been better spent on addressing the higher education finance gap between England and Wales. Instead, it set up a review that, because of its myopic terms of reference, could only come up with one conclusion.
Unfortunately, it is a conclusion that will do little to help the long term economic prospects of this nation and by aping the actions of English educationalists, has diminished devolution within this country.
I experienced that feeling again last night when I was honoured to be a panellist on Pawb a’i Farn.
For those of you who have never appeared on a live show, it can be a daunting experience but one that is highly enjoyable. At the beginning, you are nervously thinking how on earth am I going to be able to last an hour but, by the end, it has become thoroughly enjoyable and the time has, actually, flown by.
The other guests on the show last night were Rhodri Morgan, Dafydd Wigley and Lord Roger Roberts.
To say that Rhodri and I have never seen eye to eye would be an understatement, but no-one can doubt that he has left an indelible impression on Welsh politics.
Probably only Dafydd Wigley – who retired from day-to-day political life in 2003 – could be said to be in the same league and when Rhodri leaves in September, he will undoubtedly leave a large hole in Welsh political life.
Every time, I have met Rhodri in the past, he was always larger than life, had a sparkling wit and would dominate any conversation or room he was in. However, it would clear that the last few years - and the serious heart problems of the summer of 2007 - have begun to take their toll.
To me, he seemed smaller, more diminished and the sparkle was gone. Certainly, the old Rhodri wouldn’t have just come out with stock answers to the questions but would have gone on the attack, especially against the Conservatives. Last night he didn’t, and just seemed tired and ready to retire there and then. Perhaps I just caught him on a bad night but I don't think so, and I am just surprised that no-one else has mentioned this before as it has enormous implications for the leadership of this country at a time when we are going through the worst recession in living memory.
The show was so hectic that one question couldn’t be asked, namely that on the introduction of student fees. However, the young people on the programme were so insistent about the issue that Dewi Llwyd asked all of us to stay on for a further twenty minutes to debate the issue. I am not too sure whether it was recorded but as everyone visibly relaxed after the programme went off air, it was a more enjoyable debate.
My view is quite clear on the subject.
This should never have happened and rather than focusing specifically on how to cut support to students to make up the funding gap in Wales, the Jones review should have examined the wider benefits of free tuition fees to the economy of Wales.
When we keep hearing that we need to create a knowledge-based economy that is based on higher level skills, is this the way forward?
We know there is a £61 million gap in university spending between England and Wales, a gap that the Assembly Government has chosen not to make good.
Instead, they will be taking money away from students to try and make up this difference. It is easy to try and defend the situation and I am surprised how many politicians, including Dafydd Wigley last night, were ready to say that this was necessary.
Surely this is a matter of priorities for the Governemnt. If it believes that education is critical to the future of this nation and that we want to create a small clever country, is this the way forward?
In Scandinavia, which has some of the most competitive small nations in the World, there are no tuition fees paid by students because policymakers in Sweden and Finland have realised that without a highly educated workforce, you cannot create a strong knowledge-based economy.
The Assembly Government currently spends well over a quarter of a billion pounds annually on business support in Wales. Yet, despite having over 1200 civil servants in the Department of Economy administering this money, we remain firmly rooted to the bottom of the UK prosperity league table.
A more radical Assembly Government would have examined whether this money would have been better spent on addressing the higher education finance gap between England and Wales. Instead, it set up a review that, because of its myopic terms of reference, could only come up with one conclusion.
Unfortunately, it is a conclusion that will do little to help the long term economic prospects of this nation and by aping the actions of English educationalists, has diminished devolution within this country.
Wednesday, March 18, 2009
Unemployment in Wales hits 109,000
The latest unemployment figures for Wales have seen those out of work reach 109,000, an increase of 57 per cent since the same time last year, which is worse than any other region of the UK.
This comes on the back of news from the IMF that the UK faces a worse recession than the USA and Europe.
This comes on the back of news from the IMF that the UK faces a worse recession than the USA and Europe.
University Tuition Fees
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The last month saw a highly divisive split within Plaid Cymru over the issue of top up fees within our universities.
So what was all the fuss about?
Simply put, Welsh students who study in Wales currently pay £1,285 a year towards the costs of their tuition, rather than the full fee of up to £3,225 they would otherwise pay.
In contrast, students in England are charged the full top up fees and it was a combination of Plaid, Lib Dem and Conservative Assembly Members who ensured that Welsh students were subsidised to attend university.
The same parties fought the 2007 Assembly election promising that they would not make students pay the extra top up fees. However, now Plaid is in Government with Labour, it has now decided to scrap the fee subsidy and focus some of the funds saved on those from the poorest families.
Why would Plaid and Labour want to do that?
The answer is simple – money.
There is currently a £61 million funding gap between English and Welsh universities and politicians have refused to make good this deficit from their current budget. Instead, they have now decided take tens of millions away from students and to give it directly to universities to help close this gap.
Certainly, our universities need the funding and the settlement announced yesterday from the Higher Education Funding Council for Wales was considerbaly less than for England and so widened the gap even further.
Only earlier this week, Bangor University admitted that it was £5 million short of reaching their financial target for next year. Quite rightly, the institution has begun a range of actions to deal with this deficit including a review of academic and operational activities to reduce costs and remove duplication, developing a new procurement strategy and looking for greater efficiencies through improved resource and energy management. As the university admits, there will be cutbacks across the university, with reductions in expenditure, discussion of introduction of early retirement and voluntary severance schemes as well as an introduction of a temporary freeze on staff recruitment.
If Bangor’s financial situation is indicative of the higher education sector as a whole, then there must be serious doubts as to whether universities will be in a position, as they have pledged, to make any significant contribution in supporting the Welsh economy in dealing with the coming recession.
It is easy to forget that they are vital partners in ensuring that the £2 billion of European Convergence funding is used to improve the competitiveness of the Welsh economy. If they are struggling to find money to run their day-to-day operations, there must serious worries that they can find the additional matched funding that is necessary for projects to be given the green light.
Indeed, the Welsh European Funding Office which administers and manages European funds may well refuse applications from institutions in difficulties because of the risk that they may not be able to deliver the projects because of other financial pressures.
This would be a tragedy for the Welsh economy as it will be those economies that are innovative, competitive and drawing on higher value-added skills which will emerge from the recession in a strong position. If we starve our universities of vital funds to develop skills and innovation, then we will continue to be the poorest part of the UK for years to come.
As is likely to be announced today, is taking money out of the pockets of students at a time when the majority of families across Wales are facing increased financial hardship the way forward?
Indeed, before making such a decision, politicians would be wise to heed the words of an ex-President of Harvard University, who said that: "If you think education is expensive, try ignorance".
Certainly, those in power have hardly blinked before giving billions of taxpayers’ money to support the banking system.
If they can do that, then they should have no hesitation in providing the right level of support for an education system that will sustain and develop our economy in the future.
Tuesday, March 17, 2009
A decade for Wales to recover from the recession
According to the forecasters Oxford Economics, up to one million workers are set to lose their jobs over the next two years, with Wales taking up to a decade to recover pre-recession job levels.
On top of that news, the FSB predicts that up to 1,200 small firms in Wales could go bust by the end of the year.
What should the Assembly Government do?
Certainly, the ProAct scheme which has been trumpeted across the press has come into some criticism within Whitehall, which seems reluctant to support its expansion across the rest of the UK.
The solution is clearly one of confidence, which begins by getting credit out to business, something which this government has failed to do.
Has the Assembly Government seriously examined the use of European Funding to do this, as suggested on this blog last year?
I could be wrong but there seems little evidence of this and very little impetus to get cash out to Welsh companies.
On top of that news, the FSB predicts that up to 1,200 small firms in Wales could go bust by the end of the year.
What should the Assembly Government do?
Certainly, the ProAct scheme which has been trumpeted across the press has come into some criticism within Whitehall, which seems reluctant to support its expansion across the rest of the UK.
The solution is clearly one of confidence, which begins by getting credit out to business, something which this government has failed to do.
Has the Assembly Government seriously examined the use of European Funding to do this, as suggested on this blog last year?
I could be wrong but there seems little evidence of this and very little impetus to get cash out to Welsh companies.
MBAs
It would seem that the MBA qualification comes in for a bit of a bashing today in two of our more august economic publications.
In the article by Stefan Stern in the FT, there is a discussion of the caricature of the MBA graduate as "fast-tracked and hot-housed, this aspiring master of the universe is supremely confident. He or she will have rapidly acquired enough knowledge of finance, marketing and the rest to launch a brilliant corporate career or, better still, glide straight into an elite strategy firm or investment bank. This steady flow of cocky graduates helped sustain market excess, the MBA-haters maintain. Their arrogance led to the collapse that now afflicts us all."
Another, this time in the Economist, questions the quantitative rigour of MBA courses and suggests that "business schools should encourage more specialisation and make the requirements for the different disciplines more demanding. This will still not give an MBA the same quantitative skills a physicist has, but maybe it will impart some humility and understanding".
Whatever the situation, it would seem that the perception of management education has changed for ever as a result of the recent recession and, more importantly, the inability of those who have undertaken courses at of the World's best business schools to do anything about it.
We will have to wait to see whether this changes the perceived value of the MBA globally.
If it does, then it could spell trouble for many universities who have come to see the MBA as the veritable golden calf, bringing in millions in fees every year from international students and thus bankrolling other activities in loss-making departments.
In the article by Stefan Stern in the FT, there is a discussion of the caricature of the MBA graduate as "fast-tracked and hot-housed, this aspiring master of the universe is supremely confident. He or she will have rapidly acquired enough knowledge of finance, marketing and the rest to launch a brilliant corporate career or, better still, glide straight into an elite strategy firm or investment bank. This steady flow of cocky graduates helped sustain market excess, the MBA-haters maintain. Their arrogance led to the collapse that now afflicts us all."
Another, this time in the Economist, questions the quantitative rigour of MBA courses and suggests that "business schools should encourage more specialisation and make the requirements for the different disciplines more demanding. This will still not give an MBA the same quantitative skills a physicist has, but maybe it will impart some humility and understanding".
Whatever the situation, it would seem that the perception of management education has changed for ever as a result of the recent recession and, more importantly, the inability of those who have undertaken courses at of the World's best business schools to do anything about it.
We will have to wait to see whether this changes the perceived value of the MBA globally.
If it does, then it could spell trouble for many universities who have come to see the MBA as the veritable golden calf, bringing in millions in fees every year from international students and thus bankrolling other activities in loss-making departments.
Sunday, March 15, 2009
Ghost towns
The Sunday Times has an article today on how the recession is depressing high streets across the UK.
For Wales, and Anglesey in particular, it does not make happy reading with three towns in the top ten of Britain’s worst-hit high streets. Holyhead is the worst, with 39% of all shops in the high street being empty and llangefni, the second major town on the island, having just under a quarter of its shops empty.
For Wales, and Anglesey in particular, it does not make happy reading with three towns in the top ten of Britain’s worst-hit high streets. Holyhead is the worst, with 39% of all shops in the high street being empty and llangefni, the second major town on the island, having just under a quarter of its shops empty.
- Holyhead (39%)
- Beckton, London (37%)
- Rochdale (29%)
- Blaydon, Tyne and Wear (28%)
- Rotherham (26%)
- Barry, South Glamorgan (24%)
- Kirkintilloch, Glasgow (24%)
- Loughborough (24%)
- Llangefni, North Wales (23%)
- Small Heath, Birmingham (23%)
So what can be done. A number of solutions are suggested, including
- Rates freeze - Retailers want Alistair Darling, the chancellor, to freeze a 5% increase in business rates due next month
- Upward rent review - Clauses that allow landlords to raise rents automatically should be scrapped, argues the British Retail Consortium
- Emergency powers - Councils want to be able to take over shops vacant for more than three months and turn them into galleries, community centres and other public spaces. They would pay a modest rent
- Vat cut - Councils want the Vat rate to be reduced from 15% to 5% for the refurbishment of empty premises to encourage shops to reopen
- Cheap parking - Councils should no longer regard parking as a way of generating revenue, instead stimulating trade by charging less, the Federation of Small Businesses (FSB) argues. Councils raised £1.6 billion in 2005, the latest year for which figures are available
- Planning - Small businesses want the government to give planners discretionary powers to veto out-of-town shopping centres if there is a risk they could weaken the high street
- Post offices - They should be kept open if they are profitable
Saturday, March 14, 2009
Making the most of sporting opportunities
As I mentioned on Wednesday, I was honoured to be part of a double act with the great Gareth Edwards at the mediawales offices in Cardiff eralier this week where we both took part in a question and answer session on the economy and rugby.
Whilst most of the questions to Gareth were about the successful rebirth of the Welsh rugby team over the last few years, the outstanding sevens win in Dubai and the recent decline of the English team, one of the gathered crowd also asked whether Wales should host another rugby World Cup here in Wales in 2015.
More specifically, given the fact that the Assembly and the Welsh FA have given up on the European Championship bid, whether Wales had the financial clout to be able to underwrite the £80 million needed for a successful bid to the International Rugby Board.
Quite rightly, Gareth focused on whether Wales can afford not to get involved in such a global event and if we are to be an ambitious forward looking nation, we must always strive to be amongst the best in the World.
Of course, there are detractors that would say that you cannot focus such events on one city in one small nation. However, as David Pickering, the Chairman of the WRU said to me afterwards, Wales could learn a lot from Melbourne in Australia, a city which has positioned itself as a centre for attracting the best sporting events.
As a 2006 report from London-based research and consulting firm ArkSports indicated, Melbourne is arguably the best city in the world in which to hold a sporting event, lending, and is ranked top for public interest in events, facilities, and number of major events hosted.
Not surprisingly, it has some enviable sporting venues, including the Melbourne Cricket Ground (MCG), arguably Australia’s largest and most popular stadium, and the Etihad (formerly Telstra) Stadium, which caters for a range of sports such as ‘Aussie Rules’ football, rugby league, rugby union and cricket.
Melbourne is home to the Australian Tennis Open, the Australian Formula One Grand Prix, Superbike World Championship rounds and Australian Rules Grand Final. It also hosts the Melbourne Cup, one of the world’s richest horseracing events.
Some would argue that Wales doesn’t do too badly for a small country in attracting global sporting events.
For example, thanks to the outstanding efforts of Sir Terry Matthews, we have secured the Ryder Cup for the very first time in 2010. In particular, this is an event that can bring enormous benefit to the economy from the USA where golf is almost a religion amongst the business community although there is still scope to persuade the R&A that Wales could, and should, develop one of its fabulous links courses to host the British Open.
Glamorgan Cricket Club has finally persuaded the powers that be at Lords that Wales deserves its own test cricket matches will create new opportunities for attracting visitors and the fact that the first test match will be part of the eagerly awaited Ashes series with Australia is bound to generate worldwide interest, not only in the antipodean nations, but also in the fast growing cricket-mad economy of India.
In rugby terms, the annual festival that is the Six Nations rugby tournament brings thousands of supporters to Cardiff to savour the unique atmosphere that is a result of having a world class stadium in the heart of the city.
However, it could be argued that not much has been done to take advantage of these sporting events to promote Welsh businesses and, more importantly, welsh products and services.
That is why the Celtfest09 event, which takes place at the Cardiff International Arena on March 21st, is to be welcomed.
Whilst essentially a musical event featuring Cerys Matthews, Bryn Terfel and the Wolfe Tones, the festival is also a showcase for Welsh food and drink and is a perfect opportunity for welsh businesses to highlight their brands to thousands of rugby fans.
For example, Felinfoel – the Llanelli-based brewer – is launching its new Celtic Pride beer at the event, seeing it as an opportunity to persuade potential Irish buyers of the quality of the beer, especially at a time when the weakness of the pound is making it attractive for Welsh manufacturers to export to the euro-zone.
Given that Wales was largely ignored by the 2012 Olympics procurement programme, with less than £100,000 of contracts awarded to four Welsh firms, events such as Celtfest, if held during every six nations home match, could provide a showcase to the fortunes of Welsh firms in a range of sectors and, if successful, the organisers may even look to an opportunity to replicate such an event when Wales travel to Rome, Dublin, Edinburgh, Paris and, yes, even Twickenham.
To use a sporting analogy, we may be small but Wales does have the capacity to punch above its weight. However, to make every punch count, we must also take advantage of the business opportunities presented by every sporting event to ensure that we market our wonderful nation, and its products and services, to the rest of the World.
Thursday, March 12, 2009
Nature, rugby and opportunity knocks
It has been a pretty hectic working week all round, given the continued development of the Prince of Wales Innovation Scholarships programme and the success our team has had in Japan in engaging with both top universities and a number of leading R&D companies.
We are also getting enormous interest from the USA with two companies already asking to take on scholars outside of our main funding programme.
However, there were three interesting personal events this week.
First of all, I finally met one of my sporting heroes, Gareth Edwards, when we were the double act at a MediaWales launch event in Cardiff.
Both Gareth and I are columnists for the Western Mail and had to face a barrage of questions from a gathering of the great and good of the business world, on the economy and rugby (Gareth spoke little about the former and I said nothing about the latter!)
The second was an interview with Nature magazine, arguably one of the most influential science journals in the World.
When I was a young Physics undergraduate, it was one of the aims of every scientist to get their name into Nature. Whilst this piece was not about any outstanding scientific discovery (I wish!), the Nature journalist seemed fascinated about our new scholarship programme and our focus on using this to boost the innovation potential of Wales, calling it a global first. Certainly, the article will boost the profile of the programme and our efforts in developing innovation across Wales.
Finally, a group of us are finally getting together to develop a new innovative business which has already interest from a number of venture capitalists. This has taken a couple of years from the initial idea, but the recent experience of MIT has certainly helped spur this forward and hopefully we can tie up the deal over the next few weeks.
Can't wait for next week....who said life was boring?
We are also getting enormous interest from the USA with two companies already asking to take on scholars outside of our main funding programme.
However, there were three interesting personal events this week.
First of all, I finally met one of my sporting heroes, Gareth Edwards, when we were the double act at a MediaWales launch event in Cardiff.
Both Gareth and I are columnists for the Western Mail and had to face a barrage of questions from a gathering of the great and good of the business world, on the economy and rugby (Gareth spoke little about the former and I said nothing about the latter!)
The second was an interview with Nature magazine, arguably one of the most influential science journals in the World.
When I was a young Physics undergraduate, it was one of the aims of every scientist to get their name into Nature. Whilst this piece was not about any outstanding scientific discovery (I wish!), the Nature journalist seemed fascinated about our new scholarship programme and our focus on using this to boost the innovation potential of Wales, calling it a global first. Certainly, the article will boost the profile of the programme and our efforts in developing innovation across Wales.
Finally, a group of us are finally getting together to develop a new innovative business which has already interest from a number of venture capitalists. This has taken a couple of years from the initial idea, but the recent experience of MIT has certainly helped spur this forward and hopefully we can tie up the deal over the next few weeks.
Can't wait for next week....who said life was boring?
Tuesday, March 10, 2009
Forget Fred the Shred - saving businesses and jobs is the priority
During the last couple of weeks, politicians and pundits have been obsessed with the issue of Sir Fred Goodwin's pension.
Indeed, even within a celebrity obsessed British press, you would be surprised to learn that there have been as many news articles on the fate of the former chief executive of RBS as those covering Jade Goody and her battle with cancer.
Personally, I believe Fred Goodwin’s pension settlement is abhorrent at a time when thousands of his own former staff at RBS are being made redundant and his actions over badly managed finance deals - such as the overpriced purchase of the Dutch bank ABN Amro - have seriously weakened the UK banking sector.
Dealing with this issue can wait a few months and it certainly should not be the main priority for those managing the UK economy and such a distraction will not help one bit in saving the British economy.
Of course, it probably suits the UK Government that the ire of the public has been temporarily diverted away from its own incompetence over the management of the financial sector during the last twelve years, although nobody has yet questioned the generous pensions given to those politicians who helped to get us into this unholy mess in the first place.
Despite some noises from his cabinet, penitence clearly seems to be a long way from the mind of the Prime Minister over his role, as Chancellor of Exchequer, in the deregulation of the financial services sector. However, if he and his colleagues are in any way serious about dealing with the real issues facing the UK economy, then their actions should focus entirely on saving jobs and stopping more businesses from closure.
Heaping shame on a disgraced banker in an atmosphere of mob rule may make everyone feel better, but it does nothing to ensure that the major problem facing the economy is addressed, namely saving British businesses.
As Harriet Harman admitted at last week’s Prime Minister’s Question Time, the Government has yet to implement its own £10 billion guarantee scheme for bank loans to help firms stay afloat in the downturn.
As a result, another million jobs are at risk as banks continue to tighten their belts.
What on earth is this Government playing at?
If it is so simple to release billions of taxpayers’ funds to support banks, as they have done with regularity since last year, why is it taking so long to get vital funding to businesses?
With every day of ministerial inaction that passes, well paid jobs are being lost and the UK economy slides further into recession. With every round of redundancies, thousands of families are being plunged into financial difficulties.
Instead of a sense of urgency over the state of the economy, we have the spectacle of a Government ready to introduce emergency laws to strip one banker of his pension and yet through an ineffectual and invisible civil service, continues to prevaricate on making money available to save tens of thousands of businesses.
That is completely unacceptable and our political masters need to wake up to the fact that dealing with the recession is not about saving their jobs but about saving the jobs of the British workforce.
It is easy to talk about global problems and get standing ovations from the US Congress but the primary focus should be on putting our own solutions into place now to support the UK economy.
If we are to stave off depression, then the business sector needs immediate support to ensure that money is released from those banks that have received billions of pounds from the UK taxpayer.
That is what will help to save the UK economy, not hypocritical handwringing by politicians over the greed of individual bankers.
Indeed, even within a celebrity obsessed British press, you would be surprised to learn that there have been as many news articles on the fate of the former chief executive of RBS as those covering Jade Goody and her battle with cancer.
Personally, I believe Fred Goodwin’s pension settlement is abhorrent at a time when thousands of his own former staff at RBS are being made redundant and his actions over badly managed finance deals - such as the overpriced purchase of the Dutch bank ABN Amro - have seriously weakened the UK banking sector.
Dealing with this issue can wait a few months and it certainly should not be the main priority for those managing the UK economy and such a distraction will not help one bit in saving the British economy.
Of course, it probably suits the UK Government that the ire of the public has been temporarily diverted away from its own incompetence over the management of the financial sector during the last twelve years, although nobody has yet questioned the generous pensions given to those politicians who helped to get us into this unholy mess in the first place.
Despite some noises from his cabinet, penitence clearly seems to be a long way from the mind of the Prime Minister over his role, as Chancellor of Exchequer, in the deregulation of the financial services sector. However, if he and his colleagues are in any way serious about dealing with the real issues facing the UK economy, then their actions should focus entirely on saving jobs and stopping more businesses from closure.
Heaping shame on a disgraced banker in an atmosphere of mob rule may make everyone feel better, but it does nothing to ensure that the major problem facing the economy is addressed, namely saving British businesses.
As Harriet Harman admitted at last week’s Prime Minister’s Question Time, the Government has yet to implement its own £10 billion guarantee scheme for bank loans to help firms stay afloat in the downturn.
As a result, another million jobs are at risk as banks continue to tighten their belts.
What on earth is this Government playing at?
If it is so simple to release billions of taxpayers’ funds to support banks, as they have done with regularity since last year, why is it taking so long to get vital funding to businesses?
With every day of ministerial inaction that passes, well paid jobs are being lost and the UK economy slides further into recession. With every round of redundancies, thousands of families are being plunged into financial difficulties.
Instead of a sense of urgency over the state of the economy, we have the spectacle of a Government ready to introduce emergency laws to strip one banker of his pension and yet through an ineffectual and invisible civil service, continues to prevaricate on making money available to save tens of thousands of businesses.
That is completely unacceptable and our political masters need to wake up to the fact that dealing with the recession is not about saving their jobs but about saving the jobs of the British workforce.
It is easy to talk about global problems and get standing ovations from the US Congress but the primary focus should be on putting our own solutions into place now to support the UK economy.
If we are to stave off depression, then the business sector needs immediate support to ensure that money is released from those banks that have received billions of pounds from the UK taxpayer.
That is what will help to save the UK economy, not hypocritical handwringing by politicians over the greed of individual bankers.
Saturday, March 07, 2009
Wales win Rugby World Cup
This is a headline I have been waiting all my life for.
OK, it is not the 15 man game but for the Welsh Sevens team to have lifted the World Cup Sevens trophy in Dubai tonight is an amazing achievement.
They even beat the mighty All-Blacks on the way to the final, where they overcame Argentina 19-12.
A fantastic result!
Prince of Wales Innovation Scholarships
You will excuse me for being indulgent today but having blogged on subjects as diverse as China, Bute Park and the future of the British pub during the past few weeks, I thought I would take this opportunity to describe some of the work I am developing as Director of Research and Innovation at the University of Wales.
What has become clear to an increasing number of us is that even within the most technologically advanced economies, and despite the best efforts of businesses and academia, not all of the innovation needed to drive competitive economies can be developed internally
With the growing realisation that there is a need to attract the best global talent to boost innovation potential, both the USA and mainland Europe have undertaken recruitment drives to increase postgraduate numbers from abroad by offering attractive packages to win a bigger share of this lucrative market.
In contrast, the UK is cutting scholarships to overseas students and leading academics are becoming concerned that we are not doing enough to bring in quality graduates.
Even the best British universities are falling behind the drive to attract the best academic brains. Only last year, Professor Alison Richard, the Vice-Chancellor of the University of Cambridge, suggested that the UK was not providing enough resources to recruit sufficient extraordinary people to be at the frontier of research excellence.
Of course, the problem has been even more acute within Wales and it is something that we have been actively seeking a solution to.
After months of discussion and development, the University of Wales has come up with an opportunity to address the innovation deficit, namely the Prince of Wales Innovation Scholarships.
Supported by European funding, the private sector and the university’s own cash, this £11.4m programme will bring 100 of the brightest university graduates from the world’s best academic institutions to work on research projects within Welsh companies.
To do this, each student will be offered a stipend of £20,000 a year, a research support fund of £5,000 and their tuition fees paid.
Not surprisingly, these are among the best research grants offered anywhere in the world and demonstrates our seriousness and commitment in getting the best talent to come to Wales.
The premise of the programme is simple but effective.
World class graduates will be placed for three years into Welsh businesses, working on science, technology and innovation projects that are of direct relevance to improving the capacity to develop new market-led processes, products, technologies and services and, over time, the Welsh economy.
Indeed, there may be considerable future spin-off opportunities for the Welsh economy from the programme. As the Welsh-born venture capitalist Michael Moritz said last year at a Cardiff Business Club dinner, the internet revolution led by companies such as Google, YouTube and Yahoo is testament to how young scientific talent from overseas can boost entrepreneurial potential.
In some of the most innovative regions of the world such as Silicon Valley in California, more than half of all new technology-based firms are started by non-Americans.
To achieve this, the University of Wales has already been in detailed discussions with some of the world’s leading research universities, such as MIT, the University of California and Rice University, to discuss ways of collaborating on this project and to bring some of their best students to Wales to support our innovative businesses.
We are also working on attracting the best in Asia and during the past five days, a member of my team has been crisscrossing Japan talking to both major industrial companies such as Hitachi, as well as half a dozen leading Japanese universities on how they can work alongside us to deliver and develop the programme.
The response, I am proud to say, has been overwhelmingly positive and supportive.
In creating a global open innovation system between world-class overseas universities, home-grown businesses and our own higher education institutions (especially those newer universities that need critical support to enhance their research potential), we are establishing a new model of open and collaborative innovation that has the potential to boost opportunities for the Welsh economy and is a million miles away from the parochialism and elitism that has blighted our economic fortunes for far too long.
Recently, Sir David Lewis – the proud Welshman and former Lord Mayor of London – stated that: “Wales needs to become less insular and more international if it is to match rival UK countries…We are not outward-looking and expanding the way that we should be. The way to grow is to look outward, not inward. That can be addressed through education, by welcoming foreign expertise to Wales.”
Through focusing on bringing the best graduate talent to bear on the Welsh business community and working with some of the world’s leading academic institutions, the University of Wales aims to ensure that Sir David’s sentiments are realised.
More importantly, I passionately believe that the Prince of Wales Scholarship Programme will help to show that our small and clever economy can punch above its weight and compete successfully on a global stage, bringing not only the best of the world to Wales, but then taking the best of Wales to the world.
What has become clear to an increasing number of us is that even within the most technologically advanced economies, and despite the best efforts of businesses and academia, not all of the innovation needed to drive competitive economies can be developed internally
With the growing realisation that there is a need to attract the best global talent to boost innovation potential, both the USA and mainland Europe have undertaken recruitment drives to increase postgraduate numbers from abroad by offering attractive packages to win a bigger share of this lucrative market.
In contrast, the UK is cutting scholarships to overseas students and leading academics are becoming concerned that we are not doing enough to bring in quality graduates.
Even the best British universities are falling behind the drive to attract the best academic brains. Only last year, Professor Alison Richard, the Vice-Chancellor of the University of Cambridge, suggested that the UK was not providing enough resources to recruit sufficient extraordinary people to be at the frontier of research excellence.
Of course, the problem has been even more acute within Wales and it is something that we have been actively seeking a solution to.
After months of discussion and development, the University of Wales has come up with an opportunity to address the innovation deficit, namely the Prince of Wales Innovation Scholarships.
Supported by European funding, the private sector and the university’s own cash, this £11.4m programme will bring 100 of the brightest university graduates from the world’s best academic institutions to work on research projects within Welsh companies.
To do this, each student will be offered a stipend of £20,000 a year, a research support fund of £5,000 and their tuition fees paid.
Not surprisingly, these are among the best research grants offered anywhere in the world and demonstrates our seriousness and commitment in getting the best talent to come to Wales.
The premise of the programme is simple but effective.
World class graduates will be placed for three years into Welsh businesses, working on science, technology and innovation projects that are of direct relevance to improving the capacity to develop new market-led processes, products, technologies and services and, over time, the Welsh economy.
Indeed, there may be considerable future spin-off opportunities for the Welsh economy from the programme. As the Welsh-born venture capitalist Michael Moritz said last year at a Cardiff Business Club dinner, the internet revolution led by companies such as Google, YouTube and Yahoo is testament to how young scientific talent from overseas can boost entrepreneurial potential.
In some of the most innovative regions of the world such as Silicon Valley in California, more than half of all new technology-based firms are started by non-Americans.
To achieve this, the University of Wales has already been in detailed discussions with some of the world’s leading research universities, such as MIT, the University of California and Rice University, to discuss ways of collaborating on this project and to bring some of their best students to Wales to support our innovative businesses.
We are also working on attracting the best in Asia and during the past five days, a member of my team has been crisscrossing Japan talking to both major industrial companies such as Hitachi, as well as half a dozen leading Japanese universities on how they can work alongside us to deliver and develop the programme.
The response, I am proud to say, has been overwhelmingly positive and supportive.
In creating a global open innovation system between world-class overseas universities, home-grown businesses and our own higher education institutions (especially those newer universities that need critical support to enhance their research potential), we are establishing a new model of open and collaborative innovation that has the potential to boost opportunities for the Welsh economy and is a million miles away from the parochialism and elitism that has blighted our economic fortunes for far too long.
Recently, Sir David Lewis – the proud Welshman and former Lord Mayor of London – stated that: “Wales needs to become less insular and more international if it is to match rival UK countries…We are not outward-looking and expanding the way that we should be. The way to grow is to look outward, not inward. That can be addressed through education, by welcoming foreign expertise to Wales.”
Through focusing on bringing the best graduate talent to bear on the Welsh business community and working with some of the world’s leading academic institutions, the University of Wales aims to ensure that Sir David’s sentiments are realised.
More importantly, I passionately believe that the Prince of Wales Scholarship Programme will help to show that our small and clever economy can punch above its weight and compete successfully on a global stage, bringing not only the best of the world to Wales, but then taking the best of Wales to the world.
Friday, March 06, 2009
Teenage Kicks
During the last week, I have been back at Turku working on developing a major project on innovation as well as undertaking some teaching in entrepreneurship.
Of interest is the fact that very few of the students wish to get involved in enterprise and are taking the course to understand small business, with the excuse being that, in their opinion, young people are never successful at starting businesses. Hopefully, i will have changed their minds by the end of the course!
Well, here is the proof that suggests that enterprise is alive and well amongst some teenagers around the World.
Of interest is the fact that very few of the students wish to get involved in enterprise and are taking the course to understand small business, with the excuse being that, in their opinion, young people are never successful at starting businesses. Hopefully, i will have changed their minds by the end of the course!
Well, here is the proof that suggests that enterprise is alive and well amongst some teenagers around the World.
Thursday, March 05, 2009
Rhodri, beer and cheese
Whatever you say about our First Minister, he surely knows how to speak his mind, often without any thought of the consequences.
Of course, in the age of 'speak your weight' politicians, such candour can be refreshing but can also, if misinterpreted, be potentially damaging.
Today's interview in the Western Mail is one such example.
Whilst rightly predicting that the USA would remain Wales’ most important trading partner, he then goes on to say that
"There are some things which despite the huge technological advances America has they are hopeless at. One of them is beer and the other is cheese and I think we can help fill the gap in both cases. American cheese is dreadful, absolutely dreadful, and their beer isn’t much better.”
I must admit that I am quite partial to a bit of Monterey Jack and a pint of Sam Adams when over the pond but clearly the First Minister feels otherwise, although whether he should say it just before going on a trade visit to our most important trading partner is another matter entirely.
Wednesday, March 04, 2009
More job losses in Wales
Yesterday, news arrived that the Italian firm Indesit - based at Bodelwyddan - had decided to close its North Wales plant with the loss of 305 jobs.
The question is whether other companies will now follow its lead?
In my opinion, the answer is yes, and we can expect many more overseas investors to begin retrenching and pull back to their home countries during the next six months, resulting in a further rapid fall in employment within well paid sectors of the economy.
Unless there is an unlikely upturn in economic fortunes over the next couple of months, there are numerous companies poised to close their operations in Wales resulting in thousands of further job losses.
More worryingly, if President Obama, as expected, goes ahead with his "America First" policies, then US businesses, which are the largest grouping of inward investors in Wales, may well reconsider their position and follow the lead of European firms such as Indesit.
Update: I hate to say I told you so but two other overseas companies have just announced major job losses - Novelis' aluminium sheet mill in Rogerstone, Newport, will close by the end of April with 440 job losses and Musashi Auto Parts has said that its factory at Blackwood will close with 124 job losses.
The question is whether other companies will now follow its lead?
In my opinion, the answer is yes, and we can expect many more overseas investors to begin retrenching and pull back to their home countries during the next six months, resulting in a further rapid fall in employment within well paid sectors of the economy.
Unless there is an unlikely upturn in economic fortunes over the next couple of months, there are numerous companies poised to close their operations in Wales resulting in thousands of further job losses.
More worryingly, if President Obama, as expected, goes ahead with his "America First" policies, then US businesses, which are the largest grouping of inward investors in Wales, may well reconsider their position and follow the lead of European firms such as Indesit.
Update: I hate to say I told you so but two other overseas companies have just announced major job losses - Novelis' aluminium sheet mill in Rogerstone, Newport, will close by the end of April with 440 job losses and Musashi Auto Parts has said that its factory at Blackwood will close with 124 job losses.
Tuesday, March 03, 2009
Poverty of education and opportunity
On the day that the Assembly Government launches its strategy for child poverty, figures were released today regarding the number of NEETS in Wales.
NEETS are those young people who are not in education, employment or training and I first blogged on this phenomenon over two years ago.
The figures are shocking.
In 1999, there were 50,000 NEETS in Wales aged between 16 and 24.
By 2006, this had risen to 55,200, a rise of more than ten per cent.
In the last three years alone, there has been an increase of over 5,000, mainly among 19-24 year olds.
This is despite tens of millions of pounds of Assembly and European funding being spent on this problem.
Something is seriously going wrong with the whole approach to supporting young people within our poorest communities and rather than announcing another strategy, perhaps the politicians and their civil servants could try and explain why the situation is getting worse, and not better, in Wales, and do something constructive about it
NEETS are those young people who are not in education, employment or training and I first blogged on this phenomenon over two years ago.
The figures are shocking.
In 1999, there were 50,000 NEETS in Wales aged between 16 and 24.
By 2006, this had risen to 55,200, a rise of more than ten per cent.
In the last three years alone, there has been an increase of over 5,000, mainly among 19-24 year olds.
This is despite tens of millions of pounds of Assembly and European funding being spent on this problem.
Something is seriously going wrong with the whole approach to supporting young people within our poorest communities and rather than announcing another strategy, perhaps the politicians and their civil servants could try and explain why the situation is getting worse, and not better, in Wales, and do something constructive about it
Monday, March 02, 2009
Euro 2016 - Poverty of ambition
According to the BBC, Scotland and Wales have now ditched plans for a joint bid to host Euro 2016 because of the global economic crisis.
Deputy first minister and minister for economy and transport Ieuan Wyn Jones said the money required was excessive. "The cost of bringing other venues up to this standard would run into tens of millions of pounds," he said. "In the current economic and financial climate, this is unaffordable."
There are a number issues with this statement:
(a) the European Championship isn't until 2016 - does the Assembly Government now think the recession will last another seven years?
(b) one of the main reasons for abandoning the bid is that "Both countries would have had to spend many millions upgrading and building new stadia for the tournament". However, I was under the impression that the main thrust of government interventions with the recession was to bring forward capital projects for local construction workers.
(c) major sporting events are a massive moneyspinner for the host country in terms of tourism. Does the Assembly now think that this is not the case?
So much for an Assembly Government that wants to punch above its weight.
Of course, we will never know whether this decision was down to overcautious civil servants or just a dearth of ambition from our politicians.
Deputy first minister and minister for economy and transport Ieuan Wyn Jones said the money required was excessive. "The cost of bringing other venues up to this standard would run into tens of millions of pounds," he said. "In the current economic and financial climate, this is unaffordable."
There are a number issues with this statement:
(a) the European Championship isn't until 2016 - does the Assembly Government now think the recession will last another seven years?
(b) one of the main reasons for abandoning the bid is that "Both countries would have had to spend many millions upgrading and building new stadia for the tournament". However, I was under the impression that the main thrust of government interventions with the recession was to bring forward capital projects for local construction workers.
(c) major sporting events are a massive moneyspinner for the host country in terms of tourism. Does the Assembly now think that this is not the case?
So much for an Assembly Government that wants to punch above its weight.
Of course, we will never know whether this decision was down to overcautious civil servants or just a dearth of ambition from our politicians.
Sunday, March 01, 2009
Finland's economic woes
It would seem that not even the most innovative and competitive economies are immune from recession.
I am currently in Finland where news emerged yesterday that the economy shrank the most in 17 years in the fourth quarter.
GDP fell 1.3 percent from the previous three months and unemployment rose to 7 per cent. It may also contract by as much as 4.4 percent in 2009.
The main problem is exports, which accounts for more than a third of Finland's economy. During the last three months of 2008, exports fell by an annual 14 percent and its main European markets - Sweden, Germany and the U.K. are already in recession.
It will therefore be interesting to see how the Turku Innovation Platform project will be received by policymakers when we meet later this week. Certainly, we hope to link into this from Wales and ensure that we can form stronger relationships with Finnish firms and universities,
I am currently in Finland where news emerged yesterday that the economy shrank the most in 17 years in the fourth quarter.
GDP fell 1.3 percent from the previous three months and unemployment rose to 7 per cent. It may also contract by as much as 4.4 percent in 2009.
The main problem is exports, which accounts for more than a third of Finland's economy. During the last three months of 2008, exports fell by an annual 14 percent and its main European markets - Sweden, Germany and the U.K. are already in recession.
It will therefore be interesting to see how the Turku Innovation Platform project will be received by policymakers when we meet later this week. Certainly, we hope to link into this from Wales and ensure that we can form stronger relationships with Finnish firms and universities,
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