Having just come back this morning from a very successful trip to New York (more about that next week), it was good to read that the Learning and Enterprise Committee remains as independent as its predecessors such as the Economic Development Committee in providing guidance to the Welsh Assembly Government. Certainly, their comments on the state of the manufacturing industry in Wales should be a real wake-up call to the Economy and Transport Department, especially given the recent reports that less than a quarter of the business support budget had been spent in the first six months of the current financial year.
Whilst I agree with much of the conclusions, I was taken by the comment in the report which stated
""A focus on quality rather than quantity with encouragement for firms with high growth potential as opposed to high numbers of start-ups".
I would support the former wholeheartedly - after all, I created and have been involved in the Fast Growth 50 project for the last eleven years - and the evidence from that is unequivocal about developing a policy of backing winners, but only after they have gone through the pain of starting up.
After all, if I could identify a successful growth company when it is first started, I wouldn't be doing this but instead would be sitting in a villa in the Bahamas with the Nobel Prize for Economics on my mantelpiece!
However, I simply don't understand where on earth they got the evidence dismissing a policy of creating a high number of start-ups as all the academic research in this area shows otherwise.
Perhaps members of the committee haven't read the Global Entrepreneurship Monitor reports which has been examining the relationship between entrepreneurial activity and economic growth for over a decade.
Indeed, it is not a matter of choosing one policy over the other and both approaches complement each other - creating more start-ups leads to more growth companies.
It is the old football adage of more shots on goal, more goals.
Simples really....
Whilst I agree with much of the conclusions, I was taken by the comment in the report which stated
""A focus on quality rather than quantity with encouragement for firms with high growth potential as opposed to high numbers of start-ups".
I would support the former wholeheartedly - after all, I created and have been involved in the Fast Growth 50 project for the last eleven years - and the evidence from that is unequivocal about developing a policy of backing winners, but only after they have gone through the pain of starting up.
After all, if I could identify a successful growth company when it is first started, I wouldn't be doing this but instead would be sitting in a villa in the Bahamas with the Nobel Prize for Economics on my mantelpiece!
However, I simply don't understand where on earth they got the evidence dismissing a policy of creating a high number of start-ups as all the academic research in this area shows otherwise.
Perhaps members of the committee haven't read the Global Entrepreneurship Monitor reports which has been examining the relationship between entrepreneurial activity and economic growth for over a decade.
Indeed, it is not a matter of choosing one policy over the other and both approaches complement each other - creating more start-ups leads to more growth companies.
It is the old football adage of more shots on goal, more goals.
Simples really....
Comments
That might be fine in order to create competition but if you put too much public money into start-ups all you do is restrict the growth of long-standing companies because they have to compete with the 'up-starts'.
However, my point is that it is not an either/or strategy that is needed. Instead we should increase the number of start-ups, especially those in new sectors, AS WELL AS focusing on growing businesses. Given the massive underspend in business support, I think we can do both.