Thursday, January 03, 2013
2013 AND THE WELSH ECONOMY
Whilst it is difficult to predict what will happen, that doesn’t mean that many have not tried to examine the major trends that will be affecting the business world in 2013.
For example, the technology company Ericsson has predicted that cloud computing – where hardware and software is delivered over the internet rather than from your own computer - will continue to develop as one of the most dynamic emerging industries, particularly in the supply of consumer-focused services.
Already, it is estimated that 50 per cent of tablet users and 40 per cent of mobile phone users are already subscribing to such services and the number of those using cloud computing is expected to double to 625 million users in 2013. This will ensure that it becomes an important part of the way we manage data across all our devices and should be an area where there should be a focus by the Welsh Government in supporting new high growth businesses to develop.
Another important growth sector within the computing world will be the continuing rise of big data. According to analysts, there will be countless opportunities for the creation of new businesses to crunch the massive amount of information being generated every day by companies which is simply too big to store and analyse in house. Wales already has a distinct advantage in this area through its £40million High Performance Computing project, although the challenge will be to ensure that this initiative is fully exploited not just as an academic tool but as a driver of this important new industry.
Whilst 2013 should see the development of new sectors in the economy, it should also experience the revival of an industry most of us thought was dead and buried. In the last few years, many have been predicting the death of manufacturing in the developed world. However, 2012 has seen a change in its fortunes that is likely to continue in the next year, especially in the USA. With increases in the price of labour in the developing world, higher shipping costs and a growing awareness by consumers of the importance of buying their economy’s own products, the American economy is likely to see more decisions, like the one Apple made last month, to repatriate its manufacturing operations from countries such as China.
The question, of course, is whether European companies will follow this trend. Certainly, with manufacturing forming a key part of the Welsh economy, it is one that policymakers should be observing closely, especially as trendsetting companies such as Hiut Denim in Cardigan are using the slogan “Our town is making jeans again” to build brand awareness of the benefits of local high quality production.
Another major trend for the revival of manufacturing has been the tumbling costs of 3-D printers, which enable you to create solid, physical objects in your small business or, increasingly, in your home. Again, I would hope that Welsh businesses will not ignore this transformational technology as it is likely to be one which will have an effect on our daily lives in a wide range of industries and sectors.
During 2012, one of the key issues facing small businesses has been access to funding, especially from high street banks. As a result, there has been a growth in creative and alternative sources of funding, such as crowdfunding where capital is raised in small amounts from a large group of people using the internet and social media.
With the number of people starting their own businesses continuing to grow next year, I will expect that alternative sources of funding from such ventures will continue to grow and become and important part of the entrepreneurial ecosystem here in Wales.
One of the key industries identified as important by the Welsh Government is life sciences with £100million in funding earmarked for the sector. However, it is predicted that the main trend for next year will not be in the development of new drugs but in how digital technology can help deliver health solutions remotely.
According to industry observers, the digital health-technology market will be worth £4billion by 2015, with telehealth devices being produced that will enable doctors and nurses to monitor outpatient health in the patients’ homes remotely, thereby avoiding non-critical and costly re-admissions to hospitals. This is in addition to the 13,000 healthcare apps available to members of the public through Android and Apple devices. With the NHS in Wales accounting for two fifths of the entire government budget, investment into this emerging industry will not only create new opportunities for entrepreneurs in the sector, but could also help to reduce costs when public sector finances are stretched.
Therefore, whilst the economic situation still seems fragile to many, there are, nevertheless, opportunities for Welsh businesses during 2013. Let us hope that, with the coming of a new year Wales will be at the forefront of many of these opportunities and that our entrepreneurs will take full advantage of these trends to create wealth and jobs in our economy.
Blwyddyn Newydd Dda, Happy New Year!