TWEETING AT CHRISTMAS

As I have been stuck in bed with a gammy foot for the last few days, I have already broken my promise not to go on the computer.

Apart from watching the whole series of Porterhouse Blue on See Saw TV, what I have been doing is playing around with twitter, something I have been reluctant to do before now.

However, as a number of my friends say I should link up all my social networking sites such as facebook, the blog and linkedin, twitter seems a natural progression and one which, honestly, I should have joined months ago.

My twitter address is simple: @dylanjonesevans

By the way, if any one has any advice on tweeting, then it would be most welcome.

MERRY CHRISTMAS

As I haven't has a break since July, I am taking a whole two weeks off with no writing, blogging or work. 

May I take this opportunity to wish everyone who reads this blog a very Merry Christmas and a prosperous New Year.

Nadolig Llawen a Blwyddyn Newydd Dda!

A VISIT TO SWEDEN

Currently in Linkoping, Sweden, acting as an external examiner for a Ph.D entitled “The Dynamics of Innovation and Knowledge-Based Regional Development”.

It examines how geographical regions as diverse as Silicon Valley, California and Linköping, Sweden have been the sources of new technology and endogenously created innovations. In particular, it studies the dynamics of specific regions or clusters of businesses in developing the capability to engage in more innovative activities and new business formation and to experience higher employment growth than others.

This dissertation’s main findings are that

(a) regional leadership involving the building of alliances with triple-helix actors (government, industry, academia) is crucial for initiating a knowledge-based regional development process
(b) a consensus space is a catalytic mechanism for ensuring the speed and effectiveness of regional development
(c) lowering the barriers for the actors involved boosts participation and the rate of innovation, and
(d) users’ perspectives are essential for social, institutional and commercial innovation.

This dissertation’s main implications are that knowledge-based regional development’s initial stages require leadership that:

(a) builds alliances and establish an arena for the triple-helix actors
(b) analyses the regional barriers to the commercialisation of knowledge
(c) utilises both endogenous and exogenous resources.

Obviously some implications for the Welsh economy and where we can get such leadership which is sadly lacking at the moment. I look forward to discussing this more detail later.

...and yes, it is bloody cold!

NORTH EAST WALES - A MANUFACTURING POWERHOUSE IN DECLINE

Flintshire and Wrexham, the two counties in the North East of Wales, have always been seen as the industrial powerhouse of the Welsh economy.

With global companies such as Toyota, Airbus and JCB located in the area it has, in the past, been rightly described as one of the main manufacturing regions of the UK. However, the region has performed the worst of all the areas in Wales over the last decade.

If we examine what has happened to the prosperity of the region since 1999, we find that the relative GVA/head has fallen from almost parity (99.3 per cent) to 84.6 per cent in 2008.

That is the largest drop in GDP/head of any part of Wales.

Not surprisingly, overall GVA has grown by only 31 per cent during 1999-2008, the worst performance of any part of Wales. In contrast, the overall Welsh economy grew by 47.2 per cent over the same period.

So what has happened?

Back in 1999, the production sector accounted for 47.2 per cent of the Flintshire/Wrexham economy as compared to 27.8 per cent of the Welsh economy. By 2008, this had fallen to 37.4 per cent. Whilst nearly twice the level for the Welsh economy, this decline has not been matched sufficiently by growth in other sectors.

Most notably, it would seem that whilst being the most populous part of North Wales, there has been very little growth in the public sector within the region. For example, whilst the contribution of the public sector to the overall Welsh economy grew from 26.9 per cent to 30.7 per cent between 1999 and 2008, the relative contribution in North East Wales grew from 18.3 to 19.3 per cent.

Therefore, whilst the rest of Wales benefitted from the largesse of the Labour Governments in Westminster and Cardiff Bay, Wrexham and Flintshire did not.

Of course, the real question is whether the area is still sustainable as a manufacturing base or will it continue to decline? Certainly, the fact that, during this period, the area did not qualify for the highest level of European grant probably made it more difficult to attract other inward investors to the region.

At the same time, it does demonstrate a failure by WAG to capitalize on the strong manufacturing base already within the region and ensuring that it not only stayed but actually expanded. Certainly, the powerhouses that were the Deeside and Wrexham Industrial Parks are a shadow of what they were in the 1990s.

The question for WAG is whether it should designate North East Wales as a “manufacturing zone” for Wales and look to develop a coherent strategy for its growth and development. Certainly, with nearly 40 per cent of the economy dependent upon production industries, there is at least a base from which it can grow, and if the UK Government is serious about the revitalizing the manufacturing industry, then there is no reason why Wrexham and Flintshire shouldn’t be at the vanguard of such a policy.

NUCLEAR POWER - IS SMALL BEAUTIFUL?

With the development of a second nuclear power station at Wylfa in Anglesey almost guaranteed, it is worth reading this article in this week’s Economist, which looks at whether “big is best” in the nuclear industry?

In fact, the article suggests that the multi-billion pound cost of large nuclear power stations may be prohibitive to private investors in the long run and that the industry is now looking to new approaches.

And rather than relying on huge, traditional reactors costing billions, it is turning to small, inexpensive ones, many of which are based on proven designs from nuclear submarines or warships.

There are clearly challenges, as the article points out in some detail, but the greatest disappointment from reading the article is that the UK seems to be out of this technological race, with most of the development taking place in the USA, which has not seen a nuclear plant come on stream for fourteen years.

Could this concept work?

Well, it would seem that none other than Bill Gates is backing a US firm called TerraPower, which is working with Toshiba to design a small reactor based on a “travelling wave” design. According to the report “Once kick-started with a tiny amount of enriched uranium, it would run for decades on non-enriched, depleted uranium, a widely available material. This will be possible because the nuclear reaction, eating its way through the core at the rate of about one centimetre a year, would gradually convert the depleted uranium into fissionable plutonium—in effect “breeding” high-grade fuel and then consuming it.

According to the Microsoft owner, nuclear power has historically been dogged by five worries: safety, proliferation, waste, cost and fuel availability. “This thing is a miracle that solves all five,” he says in the report.

And if Bill Gates is backing this technology, how many would bet against the concept working? More importantly, is the UK nuclear industry geared up to take advantage of this new cheaper alternative?

THE DECLINE OF WEST WALES AND THE VALLEYS

There has been some discussion on the state of the Welsh economy following the release of the GVA data. Much of this has been on the state of the overall Welsh economy, although given my academic interest in regional economic development, I am starting to examine the data for West Wales and the Valleys which, unfortunately, is only available to 2008.

Two of the more interesting long term findings are discussed here.

As suggested last week, West Wales and the Valleys is the only region previously in receipt of Objective 1 funding which has seen its relative prosperity decline during the last decade. In contrast, Cornwall has now overtaken the region, despite being well behind us in 1999 and is continuing to grow.

The question is why?

In 2003, I was appointed as a special adviser to the Welsh Affairs Select Committee to examine European Structural Funds. At the time, the committee took evidence from representatives from the other three  regions on how they were managing the funds and, if my memory serves me right, what stood out from the Cornish evidence was the way that they were fully interacting with the private sector.

Could it also be that Cornwall demonstrates that a more local approach to the spending of European funding works better i.e. at a county level. I have made this point on several occasions - that the majority of the next round of Convergence funding should have been allocated on a  county basis in Wales rather than managed centrally by WAG. Unfortunately, it was ignored.

Perhaps the question is why the prosperity of West Wales and the Valleys which grew between 2004 and 2005, began to decline again after this period. Could it be that this is linked directly to the decision to abolish the WDA back in 2004, especially as the WDA were responsible for many of the support programmes at that time?

Certainly, it may be time for another inquiry into the spending of European funding by the Welsh Select Committee (although I doubt that I will be asked to advise this time round!)

Secondly, if we look at what has actually happened to the components of the West Wales and the Valleys economy between 1999 and 2008, we see that the overall regional economy has grown by 46.6 per cent, or £7.7 billion. However, we must not forget that a quarter of that growth would have come directly from the £2 billion of European and match funding provided for the Objective 1 programme.

Indeed, if we look at the impact of the public sector components as a whole during this period, they account for 40 per cent of the total growth in the West Wales and Valleys economy. Whereas the public sector was 25 per cent of the region's economy in 1999, this had grown to 29 per cent by 2008. This is despite the fact that Objective 1 was predominantly available to grow the private sector.

The region, of course consists of the largely rural West Wales and the industrialised Valleys, both very different areas economically. In the rural areas, there has been a catastrophic decline in agriculture of 75 per cent during the period 1999-2008. Compare this to a growth of 22 per cent in the agriculture sector in Cornwall during the same period.  Whilst hotels and restaurants have grown by 41 per cent, this is still below the growth of the region despite the funding available through the Wales Tourist Board and European grants.  In Cornwall, this sector grew by 60 per cent despite contributing far less to the economy as compared to West Wales and the Valleys (which may surprise many given the Rick Stein type image of the Cornish resorts).

Manufacturing has declined by 2.5 per cent during this period in West Wales and the Valleys. Whilst some may point to the long term decline of manufacturing being reflected in this data, it must be pointed out that, across the UK, manufacturing GREW by 2.5 per cent during the same period. However, given that the European Structural Funds largely ignored the sector during this period, that should not be surprising.

More analysis later this week as I go through the data (if the Ph.D exam in Sweden doesn't take too much time!)

THE ECONOMIC STATE OF POWYS

Earlier this year, I made the economic case for Powys, noting that it had fallen behind the rest of Wales during the last decade and should have been included as part of the Convergence region that qualified for £2billion of European funding.

The data that has emerged from the Statistics Office last week has reinforced this view even more.

In 1999, the GVA relative to the rest of the UK for Powys was 75.0 per cent, as compared to 77.3 per cent for Wales.

Fast forward to 2008, and we see that Powys now has a relative GVA of 63.1 per cent as opposed to 74.1 per cent for Wales.

Therefore, whilst the Welsh economy has grown by 47 per cent for the period 1999-2008, it has only grown by 31 per cent in Powys. Agriculture, in particular, has been hit hard, with a 75 per cent reduction in its contribution to the local economy.

If, as some politicians have stated, West Wales and the Valleys is to receive a third round of funding, then there is now a clear an unequivocal case for Powys to be included as part of this region.

ANOTHER INTERNET SOLUTION FOR WAG?

Yet another company is looking to break the monopoly of the large UK telecommunication businesses in providing access to superfast broadband.

According to a recent press release, Arqiva has teamed up with Alcatel-Lucent to conduct a high speed (50Mbps+) trial of next generation Mobile Broadband technology in West Wales.

The trial will deploy LTE technology in the Preseli Mountains using 800MHz radio spectrum, which has been freed up as part of a Digital Switchover from the old analogue TV spectrum. It mirrors an almost identical trial on the Caradon Hill area of East Cornwall, which is being conducted by Clear Mobitel.

As Preseli Mountains communities are dispersed and have low population densities which can't be reached economically through existing fixed line ISP networks, the trial aims to demonstrate the economic and technical viability of a neutral-host wireless network (i.e. it will offer wholesale access to ISPs) as a route to extending broadband coverage into 'NotSpot' locations.

Given that WAG is currently exploring how it will spend the £240 million on superfast broadband infrastructure, this is yet another solution that could, and should be considered.

THE BEGGING BOWL MENTALITY?

It is incredible to consider that some Welsh politicians actually went on record yesterday to shamefully state that qualifying for a third round of money as one of the poorest regions in Europe as "good news".

For crying out loud, should any self respecting Welsh person really believe we should be in this position after a decade of devolution?

More relevantly, have any of them stopped to think why, despite spending the billions of pounds of European money over the last decade, the Welsh economy continues to go backwards?

The fact that the private sector, mainly for narrow ideological reasons, has been largely excluded from developing projects during the last two rounds of European Structural Fund projects is probably one of the key reasons why very little economic progress has been achieved during this time.

For example, one of the major investments during the Objective 1 period was the Technium programme and much has been written about the so-called "Fields of Dreams error"  that was made in committing money to this scheme i.e. if you build it, they will come. I know because I have consistently been one of those critics of the way this project was developed.

Yet the simple fact of the matter is that if you let a red-tape obsessed Welsh Assembly Government run by civil servants with no commercial experience develop and manage an incubator unit, what do you think is going to happen?

The same applies to scores of other projects from business support to regeneration projects.

Rather than being seen as an investment to generate further wealth and jobs, European money has been merely been seen by public bodies as a bonus to their budgets with no real thought given as to whether that funding would generate long term sustainable growth.

More detailed discussion on this issue next week but, for the weekend, let me leave you with the following table, which shows which UK sub-regions have grown (or not grown) during the period 2000-2008 when West Wales and the Valleys received £1.3 billion of Objective 1 funding and a further £700 million of public matched funding.

As the table below shows, the relative prosperity of West Wales and the Valleys went down by -3.1% during this period, despite the fact that around £2 billion of European and public money was spent in the region.

Compare this to the performance of the other regions that were in receipt of European Objective 1 funding at the time and their performance. Cornwall increased its relative prosperity by 9.0%, South Yorkshire by 1.9% and Merseyside by 0.3%.

Can anyone try and explain why this is the case - that other regions in receipt of Objective 1 funding managed to grow their economies whilst it has declined in West Wales and the Valleys?

However, the real concern, and the one that Welsh politicians should really be worried about, is the fact that the prosperity of East Wales has declined by -5.2% over the same period.

In 2000, the region was almost at the same prosperity level as the UK economy. By 2008, it had declined to 94% of the UK's average prosperity. This is despite the so-called "devolution dividend", a doubling of the Assembly's budget and responsibility for economic development being firmly in the hands of our own Minister in Cardiff Bay.

Therefore, if the economic powerhouses of Cardiff, Wrexham and Flintshire are one of the five worst performing sub-regions of the UK, then the Welsh economy is in serious trouble.

More importantly,  if anyone still thinks that the naive document that makes up the Economic Renewal Programme is the answer to this decline, then god help us.

GOING GOING.....

I had a couple of phonecalls yesterday suggesting that the Director General for the Department of Economy and Transport was about to stand down from his position and was being moved sideways to oversee a "special project". 

There have been no official confirmations yet from the Welsh Assembly Government but given the way the jungle drums are beating loud and clear, there is little reason to believe that this rumour is not true. 

Given the criticisms that have been levelled at the senior management within the Department of Economy and Transport, including this article on Saturday, this revelation would not be a surprise. 

It may even justify awarding Andrew Davies the AM of the Year title at Monday's Welsh Political Awards!

One can only hope that Ieuan Wyn Jones now has the courage and foresight to avoid recruiting the successor from the rest of the senior management team in his department and will go out to open advert to fill one of the most important jobs in the Welsh civil service. 

Unfortunately, I very much doubt that will be the case.

THE GVA DATA

As I have been in London all day, I missed this morning's announcement regarding the GVA figures for Wales, which showed that we remain firmly rooted to the bottom of the UK prosperity league table.

Having the detailed tables now to hand, I need to spend some time analysing the data before posting anything substantial on the figures and as I am currently reading a Ph.D dissertation that I am externally examining in Sweden next week, it is not a priority!

However, the following table does demonstrate the regional disparities that exist in the UK and how the situation has become comparatively worse in recent years in Wales whilst improving in Scotland and Northern Ireland.

TO MERGE OR NOT TO MERGE? THE DILEMMA FACING WELSH HIGHER EDUCATION

The term "deja vu all over again" may be a famous US sporting quotation, but that is exactly the feeling within the upper echelons of higher education in Wales at the moment as talk of consolidation and mergers permeates the senior common rooms of Welsh universities.

Take, for example, this article from the Guardian in 2000 looked very carefully at the scenario developing in Wales at that time.

A decade later, we now have a Minister for Education in Wales who is still carrying the torch for mergers, but in a far more forceful way than his predecessors. 

The interesting aspect is whether the advice being given at the time by the top civil servant in the Department of Education still holds true in the Assembly Government today namely "They are independent institutions - we can't make them do things." Given the speeches emanating from DCELLS over the last few months, probably not! 

Of course, Wales is not the only part of the UK to look at mergers as a way of increasing efficiency within higher education. 

The University of Manchester and the University of Manchester Institute of Science and Technology (UMIST) formally merged in 2003 to become the largest university in the UK. However, the merger was generally supported by both institutions and funded by £65 million of extra funding secured from government and regional bodies, money that is now probably not available from the Higher Education Funding Council in Wales (HEFCW) or the Welsh Assembly Government for the 3-4 mergers that may be on the cards. In fact, this paper on the process in Manchester may have important lessons for any potential mergers in Wales and I sincerely hope that advice is currently being taken from those who, at the time, put together a very difficult marriage in the North West of England.

A year earlier, there had also been talk in the air about a potential merger between UCL and Imperial to create an academic powerhouse in London and there was much debate about this move amongst commentators in the sector. One of the most coherent notes on the subject was that produced for the Independent by the Oxford academic Alan Ryan who suggested that bigger universities did not necessarily mean better universities. As he wrote back in 2002:

"How big are the best American universities? Harvard has 6,500 undergraduates, Princeton 5,000, Stanford 6,600; Oxford 11,000, ditto Cambridge, ditto UCL. Imperial looks much the same size as Harvard, with 6,700 undergraduates and 2,700 graduates, although Harvard is overall much bigger than Imperial – its professional schools in law, education, business, government, medicine and dentistry add another 6,000 students....The best undergraduate teaching in the US is at places like Williams College – where there are 2,000 undergraduates and a devoted faculty. Williams has an endowment of £900m, and charges £17,000 a year in fees; so does Stanford, with £6bn in the endowment and a £1.2bn turnover.

Alan Ryan's argument that size is not related to academic excellence still holds true today. 

Harvard - the best university in the World - currently has 6,700 undergraduates (Harvard College) and 14,500 graduate and professional students. The second best university - Caltech - enrolls approximately 950 undergraduate and 1,200 graduate students and employs about 300 professorial faculty. MIT, third on the world list, enrolled 4,232 undergraduates and 6,152 graduate students for 2009–2010. Of course, all three (and Stanford and Princeton) are private universities but the point remains valid in the context of "big is beautiful". Indeed, a large number of my colleagues in Cardiff University still bemoan the fact that a top ten research position was sacrificed on the corporate altar of getting a medical school (University of Wales College of Medicine) and, as a result, membership of the Russell Group. As a report in the Times Higher back in 2009 noted "The University of Cardiff insists that there is a simple explanation for its slide down the Times Higher Education Table of Excellence - its merger with the University of Wales College of Medicine in 2004. This year's rankings, a spokesman said, simply did not compare "like with like". The University of Wales College of Medicine was 48th in the table at the time of the 2001 RAE. If the two institutions had been combined back then, "we would, we believe, have been 22nd - exactly the same position as we are now in the table in 2008", the spokesman said."

Therefore, it may be difficult to argue that mergers will necessarily lead to better universities in Wales, as other forms of collaboration (such as joint research centres) could have the same result. 

Another point being made about the potential Welsh HE merger is in relation to access. i.e. that mergers will open up greater opportunities to those from deprived backgrounds. However, I came across a fascinating article that highlighted a study showing that students from disadvantaged backgrounds and those entering higher education from state schools are less likely to drop out if they are studying in a small university or college.

GuildHE – the body representing these smaller institutions - has argued that the more intimate and supportive environment of smaller universities and colleges such as those represented by is better suited to students from disadvantaged backgrounds and those who may be first in their family to enter higher education. The level of support provided makes these students less likely to drop out than they would be if studying in a larger institution.

So is there a case for mergers within higher education in Wales? 

To date, much of the arguments have been about political imperatives rather than on securing a structure that is best for the future of the Welsh university sector. 

Fortunately for the Assembly Government, the accountancy group PWC has only recently developed a position paper that examines the merger debate in Higher Education. According to the company, mergers tend not to be popular within the HE sector because they: 

• have usually occurred in response to crisis, and not in pursuit of the strategic prize that might be available 
• are often associated with a loss of institutional identity and there may be a perceived trade-off between the greater scale that comes with merging, and the pursuit of the core institutional mission
• are complex, difficult to plan and execute successfully and there have historically been relatively few large scale mergers among universities and therefore inevitably the knowledge that resides within the sector is limited.

Indeed, PWC do offer a number of options for HEIs to work more closely together (see below) and these range from informal collaboration to full merger. 

One could ask whether any of these models might work just as effectively for the Welsh HE sector and, more relevantly, whether any studies have been undertaken by HEFCW to examine all the strategic options.

Fortunately for those wanting greater change, the paper does present a clear roadmap for higher education mergers, describing the potential benefits to universities that go through the process. These include:

• Securing cost efficiency - The economies of scale achievable from combined functions, adoption of common processes, and the removal of duplication within back office administrative functions. For example, property and infrastructure efficiencies; synergies from subject/module analysis, which eliminates duplication; lower stakeholder engagement costs across for example the HE sector, public sector providers and student services; andr educed management costs, including lower costs associated with executive team and governance arrangements.
• Optimising scale of operation - Seeking size and scale may be another factor that underpins merger initiatives in the current environment. In the context of a merger, size and scale may be aimed at gaining scale in specific elements of an organisation’s operations and using these elements to increase competitiveness and might include breadth of subject teaching offering; geographic spread of operations; and research strength and depth.
• Brand leverage - Benefits may be achievable around brand and particularly the greater leverage of brand for the legacy organisations. For example, association with a stronger more established brand may improve market positioning and unlock benefits in terms of attractiveness to students.

Of course, these are all business benefits for the institutions and, as such, it must be up to the individual organisations to determine whether a merger will give the new organisation a competitive advantage in the marketplace.

Perhaps the most important lesson from the PWC paper is that mergers simply cannot happen overnight in response to political imperatives alone.

Over the decades, research has consistently shown that a majority of mergers and acquisitions in the corporate world are considered unsatisfactory by their stakeholders, are outright failures, or fail to match the companies’ previous organic performance. The record in the public sector is no better. The National Audit Office reported earlier this year that over 90 reorganisations including mergers, have taken place in government. The report concluded that given the lack of a co-ordinated and rigorous approach, the success rates for public sector mergers is very low.

Therefore, planning is critical and if mergers are to occur within the Welsh Higher Education sector, they must be carefully planned. In particular, determining a clear strategic rationale is especially important in the context of the HE landscape due to the diverse forms and functions of institutions and the differing levels of underlying performance. 

Whilst mergers may an easy option in terms of political imperatives for higher education in Wales, the actual implementation may be much harder to achieve, especially if there is uncertainty over the actual business case for such mergers, which has yet to be properly made by the Welsh Assembly Government.

As the merger of Manchester University and UMIST has demonstrated, mergers can be undertaken successfully within Higher Education in the UK but the question remains whether that was the exception rather than the norm. The Manchester merger was also driven by the institutions themselves rather than any political pressures. Indeed, the "big is beautiful" argument has yet to be coherently made by anyone within higher education in Wales or, for that matter, by anyone in Government.

The main message for university mergers in Wales is that it simply won't happen overnight. Indeed, there will be an enormous amount of planning that needs to take place if they are to happen, it may disrupt the higher education system in Wales for years to come and, more importantly, there is no guarantee of any success at the end of the process.

If this process is to take place in Wales, then all the evidence from the PWC study shows that considerable time and effort is needed for merger planning, execution and then post merger integration. When two universities merge, then strategic intent, culture, leadership, governance, academic reputation, people and communications will be as crucial as cost synergies, technology and infrastructure support. And even if all that is achievable, can such factors be executed without sufficient funding resources to "oil the deal"?

To date, none of these issues have been discussed in the political arena but if mergers are the only feasible option available to the university sector in Wales, then they are all issues that must be taken seriously by all the stakeholders in Welsh higher education, especially the Assembly Government.

MORE SPIN.....

The article from Saturday seems to have generated a number of emails from the heads of business organisations across Wales.

One alerted me to an article on Friday in the Western Mail on Friday and the comments made by the WAG spokesman, namely 

"The focus on six sectors who will get direct support is one part of the strategy and was developed after extensive consultation with business."

Well, according to this individual, this is "blatantly untrue" and he refers to page 37 of the ERP document where it says

"In 2008, we adopted the recommendation of the Economy and Transport Ministerial Advisory Group that we should align our activities to key sectors of the Welsh economy in order to improve the global competitiveness of Wales". The rest of the section on sectors describes how WAG adopted these recommendations.

According to the note I was sent, it was alleged that

"there was no consultation with businesses at all, and certainly no consultation with my members - think about it, how could you consult with businesses and ask them whether they believe they should get business support or not? What do you think they're going to say? "No, I'm a retailer so believe I shouldn't get anything, it should go to advanced manufacturers instead." Absolutely ridiculous."

This seems to be backed up by the extensive notes I have received on the consultation process. I certainly found little evidence of any demand from the businesses to reduce business support to six sectors.

In addition, the head of another representative group wrote to me to say that his body

"responded with a full and robust view of the economy and  covered many (as we see them) key points about the future direction of both the economy and how it should be supported - we even proposed some novel ways in which to measure performance!  So it was with some excitement that I received the initial 'ERP action plan'…none of the points raised by my membership was to be seen…which leads my board to only assume that dictionaries used within the DET contain an interesting definition of 'consultation'!"

As there are no questions to the Minister for Economy and Transport before the Assembly goes into recess, I can only hope that some of the Assembly Members will raise these issues directly with him in the New Year and that the mainstream press, rather than being its usual acquiescent self, may actually do some detailed research into how the ERP has little support in the business community outside the large companies.

As one commentator noted over the weekend, one only hopes that the Minister has not misled the Assembly over claims that the ERP has been developed in response to the needs of the Welsh business community.

A PROUD UNCLE

Today, before reverting to the usual entry about the Welsh economy and Welsh politics, I am posting as a really proud Uncle after finding out that my nephew Gareth is slowly, but surely, climbing the football ladder.

According to the Caernarfon and Denbigh Herald,

"Porthmadog have boosted their squad with the signing of promising young midfielder Gareth Jones-Evans from Pwllheli.

The 18-year-old has been one of the stand out players in the Welsh Alliance League over the past couple of seasons and was outstanding in Pwllheli’s Barritt Cup final victory over Gwalchmai last May.

"Porthmadog manager Gareth Parry said of him: "He is one of the most promising young players in the area. He has trained with us for several weeks, creating an excellent impression."

A couple of years ago, Gareth came down for trials with Cardiff City but, unfortunately, didn't make the cut.

Hopefully, he will get another chance to shine soon, especially if he gets regular games for Porthmadog doe the rest of the season.

Da iawn Gareth!

ALL SPIN, NO SUBSTANCE

If you believe the spin continuously emanating from officials within the Department of Economy and Transport within the Welsh Assembly Government, then the new Economic Renewal Programme (ERP) is not a product of civil servants’ imaginations but “of months of consultation with businesses, unions and academics”.

In fact, press officers are keen to emphasise, in almost every Ministerial speech, article and public utterance, that the ERP is industry led and supported by the business community.

For example, a recent submission on the ERP noted, “the close collaboration and consultation with partners was strength of Economic Renewal: a new direction”.

Of course, whilst the CBI is a major supporter of WAG’s approach to focusing efforts on large anchor companies, repayable grants and broadband, it does not represent the views of all businesses in Wales.

Indeed, given that WAG boasts that the consultation with the business community was one of the most extensive ever undertaken, then it is worth examining what exactly the private sector considered to be the main economic development priorities.

WAG officials organised various roundtable events across Wales between January and April 2010 to discuss the main priorities of the ERP. More than 250 people attended these events which, according to WAG, were held to encourage further engagement with businesses and other stakeholders, gathering their views about the future of the Welsh economy and what WAG could do to help them meet the challenges and maximise opportunities post recession.

Given this detailed discussion with the business community, one would expect that the conclusion from the private sector reflected the four main changes being implemented by the ERP, namely the abolition of grants, a focus on six key sectors, the removal of business support from the majority of SMEs and the spending of hundreds of millions of pounds of public money on broadband.

Unfortunately, nothing could be further from the truth and thanks to the Department for Economy and Transport, which kindly sent me copies of the entire consultation process, I can now reveal details of what was actually said within the roundtable events which took place around the country.

Let’s start by examining the grant system, which has been at the heart of the new economic approach.

According to WAG officials, the perception is that the business community in Wales no longer requires grants and that any new repayable grant system should be limited to certain sectors.

But the consultation process actually reported the opposite - that grants to business were seen as an essential part of a competitive proposition to business. In fact, the message to government was not for the elimination of the grant system but to ensure less bureaucracy, further simplification and a more efficient process.

Similarly, the overall view regarding business support was that it was too complex and bureaucratic. However, no one asked for the wholesale abolition of help for small firms in Wales, as has currently happened under the ERP. Indeed, there was no call at all for a focus on six specific sectors, with the main request being a simplification of the business support process.

Finally, in terms of provision of broadband, whilst a third of those who responded to the section on 21st century infrastructure demanded faster broadband, there were more positive responses for investment in transport infrastructure. Certainly, there was no overwhelming demand for government to pay for a superfast broadband for all businesses as we have been led to believe.

Therefore, according to the “most extensive consultation exercise undertaken with the Welsh business community”, there is little evidence of demand for the abolition of grants, the closure of business support, the focus on six sectors and increased government expenditure on broadband. Yet the Minister for Economic Development seems to have been sold the line, from his senior civil servants, that these are the very issues that the business community have requested as being critical.

Of course, it is up to the democratically elected Government to decide the direction of travel for the Welsh economy but it is clearly unacceptable for civil servants to try and wrap their policies in the blanket of business respectability when their own consultation process with the private sector suggests a very different approach.

And as if the reporting of the consultation process itself wasn’t flawed, then the Federation of Small Businesses (FSB) which has 10,000 members in Wales, has now suggested that their “members felt that the engagement during the meetings with businesses during the Economic Renewal Consultation period was not genuine, and felt that uncomfortable leading questions were pitched at them regarding choosing between whether they’d prefer investment in infrastructure or direct business support.”

That is a damning indictment of the whole consultation process and there must be doubts as to whether those leading the Department of Economy and Transport can ever be taken seriously again by the business community.

In fact, these revelations follow heavy criticisms of the Department of Economy and Transport by the previous Minister, Andrew Davies, who said that he held senior management and senior civil servants responsible for the effective waste of £100m of public expenditure under the Technium programme.

In addition, an independent report from internal WAG auditors heavily censured the way the department was being run, highlighting management weaknesses that exposed the department to "significant risk".

And last month, the Assembly’s Enterprise and Learning Committee has stated, quite unequivocally, that they are still unclear as to how “delivery of the Economic Renewal Programme will be any different if the Welsh Government’s senior management team will essentially remain the same, albeit within yet another new departmental structure.”

Clearly, these revelations and criticisms should make the current Minister for Economy and Transport consider carefully whether his organisation is truly fit for purpose and the right people are in place within his senior team to take Wales forward out of recession.

Indeed, given the fact that Wales continues to languish at the bottom of the UK prosperity league table, it is the least our business community deserves.

EVERYTHING IN MODERATION?

Tim Montgomerie has referred to a fascinating piece in the New York Times about anonymous commentators, or trolls as blogging aficionados describe such individuals.

As someone who blogs nearly every day,  the main issue is whether comments should be moderated or not so as to have an open and 'live' discussion.

Certainly, this would have encouraged a quicker response to postings, especially over the Economic Renewal Programme which worthy of a wider debate and seems to have at least elicited a response from a number of those interested in the discussion.

However,  during July, I had to resort back to comment moderation because of one individual who felt he or she had the right to print personal abuse that was, to put it lightly, based on some fantasy notion about my good self.

Simply put, it had no place on a forum that has been developed to engender rational discussion about issues that affect every single one of us.

Whether this individual has personal issues, was vindictive or just doing it for fun, was irrelevant but it became a case where I was spending my time having to delete whatever next flight of fantasy this idiot would decide to write. Indeed, it had reached a stage where what he or she was writing had suddenly become libellous and threatening and, as a result, I had no choice but to resort back to comment moderation. As this coward lacked the bravery to say it to my face or phone me (my number can be found on my employer’s website - www.wales.ac.uk - if he bothered to look) then I had little option if these comments were not to pollute the debate.

As Tim notes, there is a currently a wider debate on the use of anonymous comments in the blogosphere.  Recently, Rem Rieder, editor of the American Journalism Review, wrote a column calling for an end to them.

As he said, "The opportunity to launch brutal assaults from the safety of a computer without attaching a name does wonders for the bravery levels of the angry". Earlier this summer, the Boston Globe's Neil Swidey attempted to unmask anonymous posters in his story, "Two cents in the digital age." An interview with Neil is shown below.

In fact, one newspaper in the USA has become the first to ban all anonymous commentating on its website, with those writing in now having to reveal their identities.

Despite understanding why they would resort to such a move, I believe that is a step too far. There clearly has to be a tradeoff between instant comment and ensuring those comments reflect the standard of the publication, be it a personal blog or a national newspaper. That is the choice of anyone who is plying their opinions either in print or on the blogosphere.

For example, I love reading Guido Fawkes and whilst his libertarian approach to comments may not be to everyone’s tastes, it reflects the type of blog he manages. I don’t think such an approach works in the same way on a blog discussing the Welsh economy and I don't want it to.

I will always welcome anonymous commentators, especially those that disagree with me, but I reserve the right to moderate comments and that will now be the policy from this blog.

This is not the Western Mail or the BBC - this is my own personal blog and if you don’t like what I am saying, then you don’t have to visit the site. I will be robustly critical of politicians and I expect a robust reply in return – that is the essence of a democracy – but posting libellous personal comments is one step too far.

Perhaps this is the problem that is faced by those of us who do not use pseudonyms on their website, unlike Valleys Mam, Syniadau or Welsh Ramblings. All three, in their own way, are sites that expound certain views and I understand why they would choose to remain anonymous. However, as this website is a collection of ideas for my newspaper articles for the Daily Post and the Western Mail, it is difficult for me to adopt the same stance. This makes it easy for individuals to make personal attacks on my family and myself.

Of course, as another website noted, "it would be great to have a completely unmoderated site to allow a better flow of debate, without having to wait for comments to be moderated, but unfortunately due to a minority of individuals who post offensive remarks I do not believe this will ever be possible”. 

We'll wait and see.

WHAT'S £35 MILLION DIVIDED BY 100?

Answer: £350,000 per job

Come back LG, all is forgiven......!

MORE EUROPEAN STUDENTS TO COME TO WALES?

In the midst of the announcement on tuition fees yesterday, I thought back to an article from the Guardian last March on the number of EU students coming to the UK. 

According to the report,

"Almost 118,000 students were admitted last year as numbers increased by almost five per cent, it was revealed. Students from European Union states count towards the strict cap on university places imposed by the Government – putting them in direct competition with applicants from England, Scotland, Wales and Northern Ireland. 


The disclosure – in figures published by the Higher Education Statistics Agency – comes amid unprecedented pressure on university admissions during the economic downturn.  In 2009, 588,689 people applied for undergraduate courses – a rise of almost nine per cent – but more than 100,000 failed to get in.


According to figures, the number of EU students increased by 4.9 per cent to 117,660 in 2008/9.Ireland, Germany, France, Greece, Cyprus and Poland sent the most students to UK universities, it was disclosed. Students' places are subsidised by the taxpayer and they are eligible for the same low-interest Government loans as those taken out by British students. 


Competition is expected to be even more fierce this year following an unprecedented 23 per cent surge in the overall number of applications. Demand from EU students is up 33 per cent - fuelled by new member states. Applicants from Lithuania and Latvia have more than doubled, while those from Romania are up by more than 70 per cent. The latest figures come just days after it emerged that many eastern European students were taking advantage of cheap tickets on no-frills airlines to access courses in the UK. Figures earlier this week also showed that more than 5,000 places at Russell Group universities were taken up by EU students last year – an increase of a third in just three years."

Of course, under EU law, Wales cannot discriminate against students from other European countries although it has the right to set variable fees for students at a national (i.e. UK) level.

This means that whilst students from England, Scotland and Northern Ireland will have to pay full fees if studying at Welsh universities, those from EU countries will be treated the same as domiciled Welsh students.

Given that tuition fees in England are set to be around £4000-£6000 higher than Wales, will this result in higher numbers of EU students now choosing Wales if they decide to come to the UK to study?

If so, what effect will this have on the university sector in Wales?

LEADING THE WAY IN BUSINESS SUPPORT

Earlier this month, I wrote about the fact that 70 per cent of all employment growth in Wales during the period 2003-2010, equating to 68,000 new jobs, had come from small to medium sized enterprises (SMEs).

This unequivocally demonstrated that it was SMEs that have driven employment growth in Wales during the last decade, especially within our more deprived communities.

However, as the proportion of employment within large firms continues to decrease within the Welsh economy, it is important that programmes are put into place that can enable the SME sector to become more competitive and, more importantly, to continue to grow and create employment.

As the business community is all too aware, the Welsh Assembly Government (WAG) has largely abandoned support to the SME sector as part of its economic renewal programme, a situation which may, ironically, lead to other organisations stepping up to the mark to fill the gap left by the civil service withdrawal of funding from such activities.

Given the bureaucracy that has bedevilled public sector support schemes over the years, some are now suggesting that the withdrawal of WAG support may not be such a bad thing and that the programmes being developed elsewhere are far more relevant to the needs of Welsh businesses.

Take, for example, the LEAD Wales initiative, which is a focused leadership programme aimed at owner-managers of SMEs.

Originally developed for the North West region of England as a partnership between the North West Development Agency and the University of Lancaster, it was introduced to Wales in 2009 as an £8 million European Social Fund project funded from Wales EU Convergence Funding, with match funding provided from the higher education partners.

It aims to provide leadership development to 700 businesses in the West Wales and the Valleys Convergence region between 2009 and 2015 and is being delivered through Swansea University’s School of Business and Economics, demonstrating the role that university business schools in Wales can play in driving forward economic development.

It is substantially different to many other business support programmes in that it is essentially driven by the needs of the businesses.

For example, the programme includes a learning experience to bring together the companies and build trust between them. It then moves onto a series of half-day sessions designed to stimulate thinking and build awareness in areas of leadership and business growth. These divide into ‘business’ masterclasses led by business school faculty and other external subject experts on themes of interest identified from delegates, and ‘leadership’ masterclasses led by proven leaders from corporate, public and sporting spheres and designed to provide inspiration and opportunity for reflection on leadership style and context.

The programme then moves to deal directly with the individual issues raised by participating companies in which an owner manager presents a personal current business challenge and other entrepreneurs ask open-ended questions to identify new options and actions. Presenters are charged with implementing action plans and reporting updates in subsequent sessions, thus providing each SME owner-manager with a board of temporary non-executive directors.

In addition, the companies are supported through a programme of business shadowing and exchanges and a series of one-to-one mentoring sessions with experienced, professional business coaches.

According to Swansea University, an initial review of the programme suggested that the average turnover of the first cohort of participants had grown by over 30 per cent in the past year. However, what is most interesting is the main factor behind this growth, namely gaining the confidence to win new business, particularly from larger companies. This demonstrates that the intangible benefits of attending such programmes are as important as those targets set by the programme funders.

Therefore, it would seem that a facilitated leadership development programme, with a strong emphasis on action learning and which is light on formal teaching, can be a powerful tool for small business development.

Perhaps the biggest challenge is that the LEAD programme, because of its nature, can only benefit a small proportion of the appropriate population of entrepreneurs although, as research has shown, whilst fast growth companies represent only 6 per cent of all UK firms employing ten or more people, they account for more than half the job growth. More relevantly, if appropriate ‘high growth potential’ entrepreneurs can be recruited, the LEAD programme can help create of a cadre of entrepreneurs to spearhead best practice in small business leadership in a peripheral economic region.

Business support in Wales is currently going through a revolution as government withdraws funding from all businesses except those in certain so-called ‘key sectors’. This will leave a vacuum which can provide new markets for other actors provided they are ready to take advantage of this situation.

Certainly, these changes give business schools across Wales a real opportunity to interact more with their local business community as well as their current focus on attracting overseas MBA students, and the Leadership and Management Wales initiative led by Cardiff Business School will certainly help with this aim.

Indeed, Welsh business schools could, and should, become major providers of leadership and management training to the SME sector in Wales and, as the LEAD programme has demonstrated, ensure that our entrepreneurial businesses not only become more competitive, but grow their capacity to create jobs within their local communities.

A VIEW ON TUITION FEES

Following yesterday's announcement on tuition fees, I have been asked about my views on the subject.

Actually, they have never changed in the last two decades and, regardless of the current Coalition Government. or any Government's policies, I have always made it absolutely clear that higher education is a vital part of any government's economic development toolset and should be considered as such.

That may be naive in the current economic climate but it is something I passionately believe in which is not surprising, given that I have spent 26 years in the higher education sector.

Yes, there are questions about the way universities are managed in Wales, the numbers going to university, the imbalance between undergraduate and graduate education, and their diminishing role in economic development (look at the failure to generate entrepreneurs from the sector for the Technium network as one example).

However, principles are sometimes more important than pragmatism and the whole point of devolution is that, if we want to, we can do things differently. For politicians, it is a matter of choice and they will have to defend that policy, in the same way that they may have to defend cuts in the health spending, an economic strategy or rises in taxation.

Fortunately, I have no political influence whatsoever so my views are unimportant!

Anyway, this is what I said after my appearance on Pawb a'i Farn last March when the subject of increased tuition fees in Wales was debated after the show:

"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 Government. 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."