One of the groundbreaking adverts from the 1980s (and one that was even adopted for a presidential campaign) was Wendy’s “Where’s the Beef” campaign.
After attending the launch of the Economic Renewal Programme (ERP) this morning, I am afraid I feel a little bit like the three old ladies in that infamous clip.
Certainly, it was an uninspiring presentation and a disappointing document overall, with little real evidence for any of the policies that have put forward to renew the economy of Wales, apart from the fact that they ‘had consulted widely with business’.
On reading the details, it would seem that WAG has mainly consulted with the CBI and have adopted, hook, line and sinker their preoccupation with supporting large firms in Wales to the detriment of the SME sector, which seem to be the biggest victim of this shake-up.
Certainly, one would not disagree with one of the central planks of the ERP, namely of moving away a grant culture towards one that is based on repayable loans.
However, as 50 per cent of the grant money (i.e. the £100 million Single Investment Fund) is now being transferred to infrastructure projects, this means that the small business sector in Wales is essentially losing out on £50 million of repayable loan capital.
At a time when bank lending remains weak, it would seem that WAG has reduced the amount of finance that is available to support the growth of the SME sector in Wales.
One also has to question the focus of the remaining business support funds on six key sectors of the economy by WAG.
From my experience of running the Wales Fast Growth 50 project during the last twelve years, it is clear that growth and excellence is not limited to any particular sector but can occur in any company which has the right product or service, the right management team and, more importantly, the access to funds and markets to make it happen.
Successful businesses are not confined to any one industry and in limiting the support available to a limited number of sectors; WAG may be stifling the economic potential of thousands of Welsh businesses.
This document also signals the end of any type of entrepreneurship policy in Wales, which could have serious consequences for the economy.
I am incredulous that at a time when the creation of jobs in the private sector should the key priority of government, policymakers in WAG – who have always had an ambivalence towards entrepreneurship and a bias towards larger firms – have ignored all the evidence that shows that it is small young businesses that create jobs, especially after a recession.
For example, an analysis by the world famous Kauffman Foundation of U.S. Census Bureau data showed that companies less than five years old created nearly two-thirds of net new jobs in the United States in 2007.
And as one of the authors noted,
"This study sends an important message to policymakers that young firms need extra support in the early years of formation so they can grow into viable job creators. Sometimes a single barrier, such as limited access to credit for business growth, can mean the difference between survival and failure. We must create an environment that aids firm formation and growth if we are going to turn employment around."
Shame no-one in WAG bothered to read it.
There are plenty of other issues but having only had time to glance through the document over the last hour or so, I will hopefully be able to digest it in more detail by the end of the week in readiness for my column in the Western Mail.
However, by largely ignoring new and small firms in Wales in favour of an agenda for larger businesses, this economic renewal programme may be taking an enormous risk with the future of the Welsh economy.
Comments
Does this mean BT will be subsidised for rolling out their Fusion programme across Wales?
By cutting the money available in soft loans to small firms, WAG is choking off any economic recovery. Banks will not lend money so where else are the small firms of wales going to get the funds needed to grow and create jobs. Madness!
Where is the beef?
An economy is not one dimensional,unlike the CBI that needs to be humanely put to sleep
If you are going to ask companies to fill in reams of pages to get any type of help, then only the really desperate will apply. If WAG had streamlined their business support system, using professionals rather than civil servants, then their previous approach would have worked.
But whatever the strategy, they still have the same set of civil servants, led by the incomparable Gareth Hall, there to implement it. God help the Welsh economy.
If that international success comes about as expected, we will create jobs here in Anglesey.
If this support is withdrawn, there is the possibility that the company may not survive and jobs will be lost.
Not sure how that adds up to economic recovery ...
Assumptions based on scanty information - such as this proposal from WAG - may be dangerous and should be avoided.
I would urge all SMEs who have received this support in the past to rally round and make representations to as many people as possible to reverse this ludicrous, ill-informed and ill-thought-out decision.
1) The consultation document did not ask for specific policy questions regarding the re-organisation of the DE&T. I'm shocked to see the changes after reading the inital consultation document. The ERP answers questions that were simply not asked in the consultation process.
2) For such big changes within the department, why wasn't there an on-going dialogue with the major players? One consultation response is not enough for such a major restructure. I dont think that the business community expected such changes, and this is poor engagement. Quality not quantity of consultation is the key.
3) The ERP as it stands now should be going out to consultation. There is no formal way to respond, and no period of consultation. Such major change, such as scrapping FS4B, IBW, SIF, should go out to consultation.
4) Where was the consultation when choosing the sectors? The ministerial advisory group seems to work in a silo away from the other players. Where was the engagement with the wider business community when choosing the sectors which will benefit from the ERP.
5) Does the wider business community suppport the new strategy?
6) Where are the details so we can debate the document and reply?
7) Is there a detailed list of what will and wont be changed in DE&T?
the list could go on...
Indeed this is only pointing out some of the failings in the consultation process. As I said, for changes so vast to the DE&T, just to offer a consultation document and no real further engagement is a shambles and a kick in the teeth for all those businesses who will be hit. One consultation document does not make up for the changes that are being made.
I have not got the time to write further or I would comment on the actual document itself. My main point is this.....SMEs are ignored. To take support away from supporting SMEs is shocking. They new approach from WAG is to support big business and hope they drag indigenous Welsh businesses with them. Making larger companies the driver in Wales when they only account for less than 1% of businesses here.
It looks like to me that the CBI have a special hotline to IWJ. Maybe he's scared of David Rosser?!
I don't agree with you, Dylan, very often...but I totally agree with you this time. Well done DE&T for ignoring 99% of businesses in Wales.
There was much more focus on this area 5 years ago and there was proof that the focus worked.