DYLAN JONES-EVANS

WALES NEEDS NEW FIRMS NOT WHITE ELEPHANTS

2012-01-23T09:00:00.000Z

As governments around the World look to reignite their economies, there is increasing interest in developing policies to encourage greater entrepreneurship. This is not surprising given that a range of studies have demonstrated the impact of both new and small firms on the economic prosperity of many nations.

Earlier this week, a major study from the European Commission showed that 85 per cent of net new jobs created in Europe between 2002 and 2010 came from small and medium sized enterprises (SMEs), far higher than their 67 per cent share of total employment. That, in itself, shows the vital importance of small firms at this critical time for Europe.

However, the one statistic that screams out for politicians to take notice and reach out for new policies immediately is the finding that all net employment growth has been generated by newly born SMEs (i.e. those aged up to five years old). In fact, the number of jobs created by new firms – 17.5 million - more than compensated for the 8.9 million jobs lost through business failure.

In contrast, employment in businesses over ten years old declined by seven per cent over the same period.This is a critical finding and demonstrates unequivocally that entrepreneurship, rather than large firm expansion, is key to the job creation potential of the Welsh economy.More importantly, entrepreneurial activity is not limited to a small number of people.

According to the latest edition of the Global Entrepreneurship Monitor (GEM) released on Thursday, it is estimated that 388 million entrepreneurs were actively engaged in starting and running new firms in 2011.And who are these entrepreneurs?

The average profile of the individual running new businesses remains largely unchanged from previous GEM studies. Through a survey undertaken in fifty-four countries, the results showed that most were often young to middle-aged (25-44 years) although there is a tendency toward younger entrepreneurs in many developing economies.In terms of gender, they tend to be overwhelmingly male although it does vary by nation.

For example, Singapore and Switzerland have comparatively high levels of female participation in entrepreneurship whilst only one in four of the entrepreneurs in France and the Republic of Korea are women.

The GEM study also confirms the findings of the European study in that new firms are job creators, with 141 million early-stage entrepreneurs expecting to create at least five new jobs in the next five years. Given this, it is not surprising that a proportion are also innovative and export-driven - 69 million new firm creators are involved in developing new products and services and 18 million sell at least a quarter of what they produce to international markets.

So what does this mean for policymakers in Wales and the UK?Certainly, it is time for politicians to start walking the talk if the economy is going to recover from its current doldrums during the next 12-18 months.

The Westminster Government should continue with programmes such as UK Start-Up to encourage a greater number of new businesses.But there needs to be more urgency to ensure a greater focus by legislators on reducing red tape and simplification. In particular, ensuring that the needs of new and small firms are taken into consideration when any laws or regulations are developed is critical.

There is also a desperate requirement for better long-term finance for new firms, something that has been sadly missing since the banking crisis despite the efforts of the Coalition government through the Merlin project.In Wales, the recently published report on micro-businesses is a step in the right direction and some of the recommendations could make a real difference. But whilst it is a valuable study in itself, it mainly deals with the issues of firms already in existence rather than addressing how a greater number of new businesses can be created and supported.

And as this blog has been stating time and time again during the last eight years, Wales, through its Entrepreneurship Action Plan (EAP), already has the structure and strategy that is light years ahead of anything else globally in terms of driving forward the creation of an enterprise culture. Through the implementation of that plan between 2000 and 2004, the number of new firms increased considerably in Wales and, not surprisingly, so did private sector employment.

And this was not done by concentrating on a ‘picking winners’ strategy of focusing on high growth start-ups, as the Welsh Government has recently adopted but by developing an enterprise culture in which more people would be encouraged to start a new business.

Unfortunately, the EAP was abandoned in 2005 by a Government that was more in favour of a “Fields of Dreams” strategy which focused on building expensive white elephants such as Techniums rather than having a comprehensive approach to developing an entrepreneurial nation rich in new employment opportunities.

And whilst attracting inward investment is of some importance to Wales, encouraging more entrepreneurs is more critical to the nation’s future, an issue that the Institute of Welsh Affairs seems to have singularly ignored as part of the theme of its third Welsh Economy conference in March.

More importantly, if the new Minister, as she has stated on numerous times, is focused predominantly on creating new jobs, then with the evidence showing that the vast majority of these come from start-ups, it is surely time for the resurrection of the EAP to create more new firms, and therefore more wealth and prosperity, in the Welsh economy.

DIFFERENCES IN PERCEPTIONS OF ACCESS TO FINANCE BETWEEN POTENTIAL MALE AND FEMALE ENTREPRENEURS

2012-01-20T09:00:00.000Z

Another paper has been published from the research undertaken by the Global Entrepreneurship Monitor research team for Wales.

The paper "Differences in perceptions of access to finance between potential male and female entrepreneurs: Evidence from the UK" has been published in International Journal of Entrepreneurial Behaviour & Research(Vol 18, No 1).

The purpose of the study is to examine whether being female increases the probability that an individual feels difficulty in obtaining finance is a barrier to starting a business. The study aims to extend this to examine if a pure gender effect exists or whether it is the interaction of gender with demographic, economic and perceptual characteristics that plays the most important role in the perception of financial constraint. Although actual financial barriers faced by female entrepreneurs have been extensively studied, this is one of the first studies to focus on the concept of perceived financial constraints faced by potential female entrepreneurs.

The data within this study are drawn from the Global Entrepreneurship Monitor (GEM) adult population survey between 2005 and 2007. The first stage of the study splits male and female respondents into separate sub-samples and runs individual regressions on each portion of the sample. The second stage of the study combines the male and female portions of the sample to directly examine the differences in perceived financial constraint between genders.

The results suggest that a greater proportion of women are solely constrained by financial barriers than their male counterparts. The gender of the respondent was also found to interact with a number of other personal characteristics in a significant manner.In terms of practical implications, this finding suggests that policymakers should be encouraged to market the availability of start-up finance from various sources to encourage women to attempt to obtain the necessary finance rather than being discouraged at the first hurdle.

IS BEING LEADER OF THE OPPOSITION THE WORST JOB IN BRITISH POLITICS?

2012-01-18T09:00:00.000Z

Daily Post column 16th January 2012

During last week, it may have dawned on Ed Miliband that being Leader of the Opposition is probably the worst job in British politics.

At a time when the economy is struggling and the UK government is managing a massive reduction in public expenditure, his popularity should be at an all-time high.

Yet, not only have the Conservatives overtaken Labour in the polls but, following a series of gaffes reported in the press, even Nick Clegg is rated higher than Mr Miliband.

As cartoonists continue to draw him as Gromit, there are already whispers of plots to replace him only fifteen months after he narrowly won the Labour Party leadership.

And when you start to become a comic caricature, then it becomes difficult for the public to consider you otherwise. In fact, other leaders of the opposition have faced the same problem in recent times.

Michael Foot, one of the great political thinkers of his generation, was reduced to comparisons with a tramp for wearing a donkey jacket to a cenotaph ceremony.

Neil Kinnock saved his party from becoming an extreme left wing irrelevance but once he had been labelled the “Welsh windbag”, fallen into the sea at Blackpool, and let his exuberance get the better of him at a pre-election rally, most of the public simply couldn’t envisage him as Prime Ministerial material.

The same was true of William Hague, lampooned for wearing a baseball cap at a theme park, and Iain Duncan Smith for his unwitting self-parody as the ‘quiet man’, although both have subsequently rehabilitated themselves as key members of the Coalition Cabinet.

As Shakespeare wrote, “Some are born great, some achieve greatness and some have greatness thrust upon them”.

And it is the latter category, that includes leaders of the opposition, that face the biggest obstacles.
Rivals who desperately want their job and have enough time to stab them in the back before the next election surround them.

There is the danger, in trying to show inclusivity, that they abandon people who helped them win in the first place, not only losing the trust of those who gave their support but creating enmity where none existed before.

Indeed, there is the temptation to inject so-called new blood by appointing the wrong people to senior positions of trust and, as Ed Miliband has found out with Lord Glasman, they end up being an embarrassment to both him and the party.

And in an election that was close, as with the Labour Party in 2010, many supporters will then think “What if?” What if we had realised, right at the beginning that he was never up to the job of leader? What if we had supported the other main candidate, in this case, Mr Miliband’s brother?

And then the whispering campaigns begin, encouraged by rivals and fuelled by newspaper editors whom they have alienated through ill-thought responses aimed at shoring up their authority.

So what is Mr Miliband to do?

Certainly, he must become a more effective public communicator to connect with his MPs and his party. He must also build on the faith of those who supported him in the first place, remembering that, in politics, it is as important to keep your friends close as courting your rivals within the party. That is what David Cameron did so well in building an inner circle of advisors in opposition who are still with him today in Downing Street.

Finally, he must also look to develop policies that resonate with the wider public and not just the Guardian reading intelligentsia who will be the first to turn on him once his star begins to wane.

If he does not, then the four to one odds of him resigning as Labour leader during 2012 may seem very generous indeed.

UKTI AND WELSH FIRMS

2012-01-17T09:00:00.000Z

Over the weekend, I had a twitter dialogue with Rhuannedd Richards, currently chief executive of Plaid Cymru.

She was responding to a comment by the First Minister that having access to the UK Government's international division, UKTI, was one advantage that Wales had as being part of the UK.Rhuannedd noted that she was "Surprised that Carwyn Jones used how Wales "benefits" from UKTI to justify continuation of UK. Wales has never been important to UKTI".

I am wondering where she received this information as it is certainly different to what I was told by UKTI in a meeting a few weeks ago. Indeed, I was informed that UKTI had supported 376 Welsh firms to internationalise their activities even though this should be a devolved matter. Indeed, more crucially, I wonder how this compares to whatever services are now offered by the Welsh Government, especially given that it was Ieuan Wyn Jones, when economic development minister, who abolished IBW (International Business Wales) which previously had responsibility for all internationalisation activities?

So what can UKTI offer to Welsh businesses?

The UKTI’s Overseas Market Introduction Service is a flexible business tool that lets British companies commission the services of trade teams located in overseas missions across the world. The Market Visit Support programme also provides assistance to new-to-export or new-to-market SMEs visiting overseas markets as part of their trade development process. However, in this respect, UKTI also provides some direct funding to the Welsh Government to support their own mission programmes.

UKTI also works in partnership with other organisations to deliver internationalisation initiatives. For example, the Export Marketing Research Scheme is an initiative run by the British Chambers of Commerce as a contractor to UKTI. It provides advice and co-funding (at up to £5k per project) for eligible companies to carry out their own market research overseas. The Chambers can also provide support for an Export Communications Review, which examines a company’s strategic communications approach to trading overseas.

But the First Minister should not just quote the example of UKTI when it is politically expedient if the Department for Business in Wales, as I have been reliably informed, is doing little to ensure a closer relationship with this body.

And if the economy is important to the Welsh Government, then more could, and should be done to help businesses take full advantage of exporting opportunities. In fact, Welsh firms still only account for 2.6 per cent of all UK exporters despite a growth in the value of exports since 1999, which suggests considerable potential within the Welsh business community for further overseas expansion if only the right support and advice was available.

However, that can only be achieved if there is better co-ordination and co-operation between the Welsh Government’s international branch and the UKTI in 2012. Not only could this begin a long overdue entente cordiale between the two administrations but, more importantly, should benefit the Welsh economy at a time when businesses need every help they can get.

ROBERT OWEN, CO-OPERATIVES AND THE WELSH ECONOMY

2012-01-16T09:27:00.000Z

Western Mail column 14th January 2012

The picture of Wales globally is one that is normally a mixture of coal, male voice choirs, daffodils and rugby.

Yet, it is easy to forget that one of the greatest gifts that this small nation gave to the World originated with an ironmonger’s son from Mid-Wales.

Born in 1771 in Newtown, Robert Owen was the creator and inspiration behind the co-operative movement where the business is owned and operated by a group of individuals for their mutual benefit.

Although most of his work in this area took place in New Lanarkshire in Scotland rather than the country of his birth, his legacy lives on not only in Wales but also in many other countries across the World.

For example, one out of every four people in Germany belongs to co-operatives whilst 30,000 co-operatives provide more than 2 million jobs in the USA. In New Zealand, 22% of the country’s wealth is generated by co-operative enterprises, especially in the food industry where they have 95% of the export dairy market and 70% of the meat market. The South Korean fisheries co-operative has a market share of 71% whilst a Canadian co-operative is responsible for 35% of all world production of maple syrup. In India, over 239 million people are members of the co-operative movement.

Therefore, the whole business of co-operatives is not a marginal activity but one that has a significant economic and social effect in both the developed and developing World. Indeed, with the United Nations estimating that the livelihood of half of the World’s population is dependent, in some way, on co-operative enterprises, this august institution has deemed 2012 as the International Year of Co-operatives.

So what about the co-operative movement in Wales?

According to a new publication by the Bevan Foundation, co-operatives – which include credit unions, housing co-operatives and worker co-operatives - are contributing more than £1 billion to the Welsh economy. They currently employ more than 7,000 people in a variety of sectors, with nearly three quarters were to be found in retail.

Whilst many may think of co-operatives as being organisations that do not make any money, it is estimated that Welsh co-operatives generated a total pre-tax profit of £19m, which is then distributed to members or reinvested in the business. Indeed, the co-operative movement across the UK recorded pre-tax profits of £715 million in 2010, an increase of 25 per cent since 2006.

Therefore, co-operatives are real businesses and nowhere is this exemplified more than by the John Lewis Partnership, which owns the John Lewis Department stores as well as the upmarket Waitrose. Currently, it is the third largest privately owned businesses in the UK with annual profits last year of £432 million.

In Wales, one of the real success stories within the emerging cleantech field has been the renewables firm Dulas, which employs 100 people and currently has an annual turnover of over £22 million. This Machynlleth-based workers’ co-operative, the second largest in the UK, has appeared on the Wales Fast Growth 50 listing for the last three years and is developing a global reputation in a fast growing and expanding market.

Given this, is the co-operative movement the way forward for the future of businesses in an age where politicians are increasingly wary of predatory profit-seeking capitalists?

Certainly, the Bevan Foundation report makes a strong case for the co-operative movement, suggesting that their focus on creating sustainable jobs, generating community benefits and protecting the environment is the business model that all organisations should follow. They also make a persuasive case for the Welsh economy, indicating that co-operatives are innovative, profitable and, more importantly, are anchored in Wales.

Yet, I still believe that the model, whilst it works for some organisations, is not necessarily the one that should be pursued by all businesses. In fact, it could be argued that, despite exceptions to the norm such as John Lewis and Dulas, many co-operatives lack the entrepreneurial drive necessary to become growing and prosperous businesses in key sectors of the economy.

Certainly, I cannot imagine Apple, Virgin, Microsoft and many other successful businesses would have become the success that they are the vision and drive of key individuals such as Steve Jobs, Richard Branson and Bill Gates. Perhaps the real triumph of the co-operative movement is its innate philosophies, many of which have been adopted by successful firms.

During the last few years, we have seen businesses increasingly sharing their profits with their employees, investing heavily in local communities and making a real effort to reduce their environmental impact.

And that, perhaps, is where the real triumph of Robert Owen can be found – not in that every organisation is a co-operative but, 240 years after his birth, having more and more businesses across the World adopting his philosophies for sustainable growth. I believe that if he were alive today, this fact, more than anything else, would make this visionary businessman and reformer very proud of what he created.

12 CRUCIAL CONSUMER TRENDS FOR 2012

2012-01-10T09:00:00.000Z

The main consumer trends for 2012, as identified by trendwatching.com.

View more documents from trendwatching.com

WHAT ARE THE TRENDS THAT WILL AFFECT YOUR BUSINESS IN 2012?

2012-01-06T09:00:00.001Z

Fascinating slides on the global themes that affect every type of business, regardless of country in 2012. How will you take advantage of these over the next 12 months?

Next week, a list of 12 Consumer trends for 2012.

WELSH HIGHER EDUCATION POLICY AND THE BRAIN DRAIN

2012-01-05T08:09:00.001Z

The Western Mail today leads with an important story on how a so-called “brain drain” is affecting the nation.

The main data for the story is taken from an excellent report, entitled Welsh Graduate Mobility and undertaken by the Welsh academics Dr Gillian Bristow, Dr Madeleine Pill, Rhys Davies and Dr Stephen Drinkwater.

The study “seeks to establish the extent to which Wales retains its graduate labour in employment; to estimate the labour market outcomes for “Welsh‟ graduates (i.e. those born in Wales) and to investigate whether and how these may change and what factors may become more significant over time.

In so doing, the report focuses on analysing the location and employment outcomes of successive “young” graduate cohorts since the 1992 expansion of Higher Education.However, it would seem that one of the more controversial findings of the report, and one that undermines the whole basis of the current Welsh Government higher education policy, has been missed in the Western Mail’s story.

According to the authors, this research has reinforced the clear link between migration to study and migration of graduates to work. This link seems particularly strong in Wales where, as has been demonstrated, ‘locals’ represent the most significant source of graduate labour. Thus, encouraging locals to study and stay in Wales is more likely to have an impact on graduate retention rates than seeking to either retain those who come to Wales to study, or to attract those who have no prior Welsh home or study links”.

This, of course, is in complete contrast to the current tuition fee policy that has been established by the Welsh Government. Unlike Scotland, Welsh students will get a tuition fee reduction regardless of where they study in the UK, leading to fears that the brightest students will inevitably go over the border to the best universities in the UK and, as the report suggests, stay there in the future to develop their careers.

As the authors point out in their conclusions on page 75, “current Welsh Government policy on HE fees could be regarded as incentivising Welsh student migration. This highlights interesting tensions between what policy might clearly be desirable as far as individuals are concerned and what might be better for a region in economic terms”.

In other words, whilst Welsh students individually may well benefit from a regime where they get subsidised to study anywhere in the UK, the economy of Wales may well be the loser in the long term.

Did the Welsh Government did examine in any detail the economic impact of restricting tuition fee subsidies to Welsh institutions, as has happened in Scotland or, as opposition spokespeople have suggested, this entire policy was drawn up on the back of “fag packet”? Certainly, judging from the responses from Welsh higher education in today's Western Mail, that particular elephant in the room continues to be conveniently ignored.

It is not only the long-term economic benefits that are critical here.

With around 16,000 Welsh students studying in English universities in 2009-10, if this level of cross border flow remains, then the Welsh Government will be transferring nearly £90 million from the Welsh budget to the English Higher Education system every year, a figure that would make even John Redwood’s eyes water.

Will this transfer be compensated by the full fees of £9,000 that will be paid by the 25,000 English students who currently study in Wales? It is a balancing act on which the political credibility of the current Government may depend and, some may say, the equivalent of crossing the Niagara Falls on a tightrope.

If, English students, as the Bristow report suggests, choose to stay and study in their local universities during the next few years and there is, for example, a ten percent drop in numbers from across the borders, then it could see a hole of £23 million in the finances of Welsh institutions annually.

Is this likely? Well, the latest data from the admissions agency UCAS suggest that it could be the case - applications from England are down 8.3 per cent, while those from Scotland and Wales have dropped 0.8 per cent and 1.9 per cent respectively. The picture on applications should become clearer at the end of January, when final figures are announced.

Will the Welsh Government make up this funding shortfall? I doubt it given other priorities. In fact, I can already see the blame being placed firmly on Welsh universities for not doing enough to market themselves properly to English students rather than on the policy itself.

But this is all conjecture. As the Welsh Government has itself admitted, I don’t think anyone really knows what will happen until the students arrive for the next academic year, which is hardly the best way to develop and implement government policy.

At best, nothing will change and the continuing inflow of English students will compensate for supporting reduced tuition fees for Welsh students. However, if they do not materialise in sufficient numbers and if there are any reductions which will have a significant impact on the financial position of Welsh institutions, then accusations of policymaking on the back of a fag packet will return, but this time with far more serious consequences.

DID CARWYN GET IT WRONG? HOW IMPORTANT IS THE EU FOR WELSH EXPORTS?

2012-01-04T07:05:00.000Z

Given the recent spats between the devolved nations and the UK Government over the decision by David Cameron to exercise the UK veto over the EU treaty in December, there have been numerous statements on how this will have an effect on Welsh trade with the European Union.

According to a recent statement from the First Minister of Wales, "some 50% of exports from Wales are to the EU". Yet recent data from the Welsh Government's own statistics suggest that it is considerably less than that, as figure 1 below shows. In fact, only Scotland had a lower proportion of exports with the EU in the third quarter of 2011.

Will this mean that any downturn in the eurozone will affect Wales less than the majority of other UK regions?

Certainly, as figure 2 demonstrates, there has been a gradual long term decline in the proportion of Welsh exports that go to EU countries since 1999. The export profile of Wales has changed considerably since devolution and whilst Europe is still a key partner, the fact that we have moved away from a dependency of 75 per cent on the EU back in 2002 to 40 per cent in 2011 shows that, thankfully, we now have a far more balanced exporting economy.

A further piece of good news is that the relative importance of exporting has grown in Wales, and now accounts for 4.6 per cent of all UK exports as compared to 3.7 per cent in 1999. Europe has played a minor part in this growth - the total value of EU exports has only increased by 16.6 per cent during 1999-2011 whilst overall Welsh exports have gone up in value by 107.3 per cent over the same period.

Yes, the EU remains a major trading partner but thankfully, exports to other parts of the World are also becoming important to the future of the Welsh economy. Perhaps that, and the growth in overall exports, is what the Welsh Government should have been celebrating last month rather than trying to score political points against David Cameron.

More on this in today's Western Mail.

Figure 1: Exports to the EU as a percentage of total exports, by UK region, quarter 3 2011.

Table 2: EU exports as a proportion of total Welsh exports, 1999-2011

Figure 4. Welsh exports, by region, quarter 3, 1999

Figure 4. Welsh exports, by region, quarter 3, 2011

HALF FULL OR HALF EMPTY? PROSPECTS FOR THE UK ECONOMY IN 2012

2012-01-03T09:00:00.000Z

Often, it is far easier to be pessimistic about the prospects for the UK economy which, given the fragile state of business and consumer confidence, ends up being a self-fulfilling prophecy.

With official sources suggesting that the UK economy's growth will be just 0.7 per cent in 2012, it is not surprising that many commentators are queuing up to talk down the economic prospects of the nation.

The latest organisation to support this view is the Chartered Institute of Personnel and Development (CIPD), which predicted that the number of people out of work would reach 2.85 million by the end of next year, with the unemployment rate for the UK rising to 8.8 per cent, the highest figure since 1994.

Of course, it is not only what is going on within Britain itself that is important to our economy and it will be events elsewhere that will probably have the greatest influence on the nation’s recovery during the next twelve months.

The one thing most economists agree on is that the greatest danger to any recovery, regardless of any internal policy decisions by the Coalition government, is the eurozone's debt crisis. Whilst nearly all have predicted that the eurozone could return to recession in 2012, there remains some slight hope and optimism that this will be brief and that growth would follow in 2013 if those eurozone members can finally get their act together over the next few months.

And the potential good news for the UK is that once there is greater certainty over in the eurozone, it is likely that British firms, which are currently hoarding £70 billion of cash, will finally release that money for critical investment later in 2012, creating hundreds of thousands of jobs in the economy (and there was fascinating article yesterday in the Financial Times on this theme).

Whilst Europe remains likely to be in the doldrums for most of 2012, there is better news across the Atlantic in the USA. Not only is confidence growing amongst US consumers but economic figures seem very positive. The growth in GDP for 2011 has been better than predicted and American businesses have been creating more than 150,000 positions every month since September.

And if the World’s largest economy is set to grow next year, then as the USA is our largest export market by country, then it can only be good for British firms.

Therefore, as we begin what could be a tumultuous New Year for the UK economy, is there any hope for optimism, however small?

It is difficult to see any improvement during the first six months of 2012 in the UK economy but if we look beyond that, there are a number of indicators that suggest that we are not in as bad a shape as some would lead you to believe.

Let’s look at inflation, which has led to increased pressures on households during the last few months.Analysts are now predicting that the consumer price index will continue to fall during 2012, resulting in lower prices and hopefully, encouraging greater consumer spending that could help the economy recover towards the end of the year.

Within British industry, there are signs that the gradual rebalancing of the economy could well be reaping dividends in the long run.Take, for example, the car industry, which is undergoing a major renaissance as companies such as BMW, Jaguar Land Rover, Nissan and Toyota have announced £4 billion of investment into British plants, resulting in predictions of record exports for this year. Indeed, according to the Society of Motor Manufacturers and Traders, car exports will be 19 per cent higher in 2011 and will break all records next year. And it is exactly the type of industry that it needed within the UK, developing highly skilled engineering jobs that are producing high value exportable goods.

The aerospace industry has also being doing well in 2011 with Airbus, which manufactures its wings in North Wales, securing orders for nearly 1400 new planes by the end of November, nearly twice as many as its main rivals Boeing.

But it is not only large businesses that are having a positive effect.

Barclays Bank recently released data that showed that nearly 480,000 new businesses had been created over the last 12 months. In addition, the proportion of the self-employed that makes up the labour force is now at its highest level for 75 years. Now those who look through half empty glasses would suggest that people are starting their own businesses because of necessity i.e. that there is no other alternative employment available.

However, those of us who are more optimistic would suggest that this is the beginning of an entrepreneurial renaissance within the UK and one that is long overdue.And here, more than anywhere else, is where government can play a more direct role in these uncertain economic times. Not only can efforts be focused on providing the vital business support and mentoring to get these entrepreneurs through the difficult first two years of the business but they can also ensure that banks, especially those that remain in public ownership, are providing the necessary capital to enable people to start their own businesses as opposed to remaining unemployed.

So, whilst there remain serious challenges, the economic picture may not be as bleak as some would like to paint. Indeed, there is some hope that by the end of 2012, we could finally see the beginning of a revival in the UK’s economic fortunes.

Blwyddyn Newydd Dda, Happy New Year!

A NEW DAWN FOR WELSH MANUFACTURING?

2011-12-29T08:00:00.000Z

WESTERN MAIL ARTICLE DEC 23RD 2011

Over the last year, the manufacturing sector, ignored for so long by politicians, has now become a favoured industry again.

With the UK Government partially pinning its hopes on an export led recovery, policymakers are looking to refocus their efforts on manufacturers, especially those in high technology sectors. In fact, whilst manufacturing only accounts for 10 per cent of the UK economy, it generated some £205bn in exported goods in 2009, representing approximately 53 per cent of total UK export by value.

This refocusing on the manufacturing sector could be particularly good news for Wales, especially as the industry is mainly located outside the south east of England and any growth in the sector will have a disproportionate effect on the less prosperous parts of the UK, such as the Welsh economy.

As the First Minister said recently, “Manufacturing is vital to the economy in Wales and should be considered at least as important as financial services at a UK level.” This echoes an earlier call by the innovator Sir James Dyson, who noted in a report for the Conservative Party that it was critical for the UK economy to rebalance itself away from financial services and propertyBut successive governments in both Westminster and Cardiff Bay have hardly covered themselves in glory when it comes to developing the manufacturing sector here in Wales.Let’s take, for example, the relative contribution of manufacturing to the UK economy since 1997.

An analysis of the latest GVA (Gross Value-Added) data on the sectors of the UK economy shows that manufacturing accounted for 25 per cent of the Welsh economy in 1997 but by 2009, this has plunged to only 15 per cent of the economy.To put this into context, the contribution of public sector services had increased from 22 per cent to 27 per cent over the same period.In absolute terms, the cash contribution of manufacturing to the Welsh economy had fallen from £7.1 billion in 1997 to £6.7 billion in 2009. This in itself, is not surprising, given that low level manufacturing operations have been switched from Wales to cheaper countries overseas, most notably in parts of Central and Eastern Europe.However, it does demonstrate the lack of any strategy to support the development of knowledge-intensive products in Wales and, more relevantly, the service provision around such products, all of which add far higher value to the economy.

In this context, it is also worth comparing the relative fall and rise of employment in manufacturing and the public sector since 2001. The data shows that the numbers employed in manufacturing has declined by 26 per cent (a fall of 55,000 jobs). In contrast, the numbers employed in the public sector has increased by 57,000 over the same period.Nevertheless, there remains real potential within the manufacturing sector in Wales that can be built upon, from global giants such as Airbus, Toyota, Sony and Tata to thousands of small companies producing specialist goods across the nation.

And the new advanced manufacturing and materials sector panel set up by the Welsh Government has made its intentions clear to develop an approach that embraces globalisation, encourages R and D in innovative products and processes, matching education provision to meet the demands of the 21st century manufacturing workplace, developing new finance packages for growth and building capacity by targeting investment in a sustainable business environment.

However, the Welsh Government cannot and should not do this in isolation. For example, much of the real value added support and expertise for innovation rests in national non-devolved bodies such as the Technology Strategy Board and NESTA whilst the vast majority of R and D funding for universities operating in fields relevant to manufacturing is still controlled centrally by the UK Research Councils.There is also billions of pounds worth of funding support for exporters available through UK Export Finance whilst UKTI, the UK Government’s trade arm, can help develop international links through its global reach in embassies and consulates throughout the World.

Given this, could 2012 herald a new dawn for manufacturing in Wales? There is no reason why this should not happen, especially if our businesses have the right management, the right products and the right skills in place and, more importantly, the appropriate support is provided by governments in Wales and Westminster.

WELSH LABOUR - PLAYING THE MAN NOT THE BALL

2011-12-23T07:57:00.000Z

I inadvertently forgot to publish this article on the blog last month as I was away travelling. Still, better late than never.

DAILY POST COLUMN 28th November 2011

Is the Labour Party in Wales in danger of believing that it has almost a divine right to rule in the Assembly?

That seems to be the impression one would assume from the recent spat between Welsh Labour and the Electoral Reform Society (ERS).

The argument all stems from the announcement earlier this month that Labour wants to have a first past the post system for all Assembly seats if there are boundary changes to Wales.

This would mean that if Labour had its way, there would be two seats for each of the thirty new constituencies. This would, according to a report from the ERS, give Labour 70 per cent of the seats with only 40 per cent of the vote.

Such a democratic imbalance would perturb anybody and it is only right that an organisation such as the ERS, which believes in a more proportional electoral system, would commission academics at the world renowned Department of International Politics at Aberystwyth University to examine the consequences of such a policy.

But, of course, in today's Wales, anyone who offers an alternative opinion to the Labour Party seems to do so at their own peril.

Almost immediately after the publication of the report, Labour wheeled out their "senior sources" to rubbish the ERS report, one of whom went so far as to question the professional integrity of the authors, stating that "this research by a Plaid Cymru-supporting academic is nothing more than guess work”.

Of course, debate and discussion are the lifeblood of a democratic society but when personal attacks are made on the academics who wrote the report and the independent body that commissioned it, then you know that the politics of Damien McBride remain alive and well in Wales.

Mr McBride, if you remember, was the special adviser to Gordon Brown who was caught trying to smear Members of Parliament.

His exposure, and subsequent sacking, shocked many outside of politics who had never thought that such underhand behaviour could be possible.

You would have thought that adopting an approach to attack individuals had disappeared from the Labour Party then but it would appear that some of Mr McBride’s disciples remain in Wales.

In fact, for someone within the Labour Party to accuse an academic from one of the most respected politics departments in the UK of being biased in his research is scraping the bottom of the barrel.

You wonder why the First Minister is allowing himself to be associated with this style of politics?

In the absence of any apology for such a slur, it reinforces the impression that whenever anyone in Wales offers an opinion or judgment that differs from the edicts laid down by the Labour Party, it is open season to attack them personally.

In fact, such behaviour demonstrates exactly why we shouldn't have an electoral system where the Labour Party gains an automatic majority every four years.

I have often had my opinions in my Daily Post column challenged by Labour MPs such as Albert Owen but that is an expected part of the democratic debate and I welcome it.

The great French philosopher Voltaire is famous for uttering that one line that encapsulates decent democratic debate in any modern society, namely "I disagree with what you say, but I will defend to the death your right to say it"

That particular line seems to have passed some of the members of Welsh Labour by and I would suggest that before attacking anyone who disagrees with them in the future, they should repeat Voltaire’s dictum one hundred times and remember that we live in a society where free speech is not only a privilege, but a right for every citizen of this nation.

START-UP SAUNA

2011-12-21T09:00:00.000Z

Given my love for all things Finnish, this is one new programme that policymakers could and should be emulating.

The Aalto Venture Garage, part of the newly formed Aalto University, is a co-working space and seed accelerator in the Nordics and Baltics, providing a free 700m open space for hackers and startups. It operates from a big industrial hall whose interiors have been optimised for entrepreneurs to work together. Shipping containers have also been brought in to create extra rooms, with even their roofs being transformed into office space, with stairs leading to the top and onto a maze of chairs and tables.

Its programmes include the Startup Sauna, which claims to be the leading open sourced seed accelerator for early-stage startups in Northern Europe and Russia. Startup Sauna pushes the selected startups develop to a stage where they are ready to take over the international markets, using coaching from some of the region’s best serial entrepreneurs, investors and other professionals.

THE DECLINE OF MANUFACTURING AND THE RISE OF THE PUBLIC SECTOR IN WALES

2011-12-20T09:00:00.000Z

They say a picture can take the place of a thousand words.

Below is the relative contribution of the manufacturing industry and the public sector to the Welsh economy for the period 1997-2009.

And the graph below is the overall monetary contribution of the manufacturing industry and the public sector (in £million) to the Welsh economy for the same period.

THE RELATIVE PROSPERITY OF WALES 2010

2011-12-19T09:00:00.000Z

Last Wednesday, the latest GVA (Gross Value Added) data was released by the Office for National Statistics.

It showed that this measure of prosperity had, following the recession of 2009, increased in all UK regions.

The good news for Wales is that, along with the East Midlands, it had the fastest growth in GVA/head of population in 2010 at 3.3 per cent. Before anyone gets excited about this news, it can probably be explained by the fact that both regions are the most manufacturing intensive in Britain and that the brief export led recovery experienced in 2010 was beneficial, at least in the short term.In fact, the bad news was that Wales is still the poorest part of the UK with a GVA/head of £15,145. In contrast, the richest part of the UK – London – had a GVA per head of £35,026.

And if we look at the growth of London since 1999, the year of the establishment of the National Assembly for Wales, the economic prosperity of Britain’s capital city has grown by 73 per cent. In contrast, the Welsh economy had only increased its wealth by 48 per cent.

So what has been happening by industry, where data lags regional GVA by one year? It shows that, despite the fact that Wales is still one of the main regions for manufacturing, its importance has decreased from being 22 per cent of the Welsh economy in 1999 to 15 per cent in 2009. In contrast, the public sector has grown from 23 per cent to 27 per cent over the same period.And ironically, given the way that the First Minister suggested this week that financial and insurance services was only important to the City of London, it is this sector that has experienced the largest growth in Wales since 1999, expanding by 125 per cent during this period.

What about the different parts of Wales? Has growth been even over this period? As many of you are no doubt aware, two thirds of Wales of Wales has qualified for around £4 billion of European Structural Funding since 2000 as one of the poorest regions in Europe. The aim of this funding was to close the prosperity gap.

The question is whether this has happened?

Unfortunately not, at least compared to the UK economy, with West Wales and the Valleys declining from 65 per cent of the UK average prosperity to 63 per cent since 1999. That is not to say that the difference between the richest and poorest parts of Wales has not been reduced. It has, but that is only because the growth in East Wales, which includes Cardiff, Newport, Wrexham and Flintshire, has been slower.

On a more local level, the good news is that Anglesey is no longer the poorest part of the UK. Unfortunately, it has been replaced by the Gwent Valleys, which now has a GVA/head of £10,654 in 2009 as compared to a UK average of £20,000.

So what does all this tells us.

Obviously, it shows that Wales remains the poorest part of the UK despite billions of pounds in additional European funding and a so-called devolution dividend.Not surprisingly, there remains the argument that the Welsh economy has suffered from long-term structural issues for decades, especially in relation to manufacturing.

Yet, the evidence suggests that the decline in this important industry, so critical for high value activities such as exporting, has actually declined at a faster rate in Wales since 1999 after actually growing during the early 1990s.There is also the issue of whether the Welsh Government could have done more or whether all the economic levers lie with the UK Government?

Certainly, some will look enviously at the growth rate of the Scottish economy, which has expanded by 60 per cent whilst Wales has demonstrated the lowest growth of any of the four nations.Critics may also argue that most of the effort of politicians and civil servants has been equivalent to shuffling deckchairs on the Titanic, bringing in a new economic document every few years rather than taking a long term view of how to truly transform the economy.From “A Winning Wales” in 2002, to “Wales: a Vibrant Economy” in 2005 to the “Economic Renewal Programme” in 2010, what we have seen is policymakers tinkering at the edges of economic development rather than coming up with a real vision for the future of the nation’s prosperity, one that truly changes the way that this country’s economy is managed.

Certainly, the lack of real and consistent strategy has had a major impact on the nation’s economic potential and, consequently, much of the billions of European Structural Funding, as well as the money available from the Welsh Government’s own funds, has been largely squandered, despite having the highest proportional spend of any region on economic development.

Back in 2001, the then Assembly Government under the leadership of Rhodri Morgan set targets to increase Wales's GVA to 90 per cent of the average for the UK by 2010.Unfortunately, we have gone nowhere near that target with Wales’ prosperity being 74 per cent of the UK average in 2010.

Rather than writing yet another grand document, what is now needed is real action to drive forward entrepreneurship, innovation, productivity, exporting and skills to ensure that, in the next decade, the Welsh economy can make some major strides towards closing the prosperity gap and finally get off the bottom of the UK economic league table.

PREDICTIONS FOR SMALL FIRMS IN 2012

2011-12-13T09:10:00.001Z

With a difficult year coming to an end, there will be a host of predictions over what will happen to the economy in 2012.

Here is a list from one of my favourite magazines, Entrepreneur, which tries to work out not only what the economy will look like but, more importantly, what trends will affect the small business sector.

Yes, it is US-orientated but how many of these will also apply here in the UK?

1.Volatility ahead. With Europe now teetering, economic uncertainty will remain the big issue for every small business owner, with 44 percent of owners naming it the "one thing that stands between where you are today and growing your company," a Guardian Life Small Business Research Institute study found. Winners will have flexible long- and short-term plans so they can shift gears quickly.

2."Right-time" multichannel marketing. Watch for new tools that will help business owners better analyze complex customer behavior and comments on various social-media platforms. Then, you'll use that data to monetize your business's social-media presence with tailored marketing campaigns that reach the right customer at the right time with the right message.

3.More cheap online ads. Marketing will center around a move to low-cost online tactics such as paid search, says Kenneth Wisnefski, founder/CEO of the SEO firm WebiMax. "Merchants and retailers who chose innovative and less-expensive advertising channels including social media and paid search were rewarded well during the Thanksgiving weekend," he says in reference to the spike in online sales.

4.Customers in charge. More businesses will involve customers directly in merchandise and marketing decisions, Susan Reda writes in STORES magazine. How? Here's a hint: If you aren't doing online customer polls yet: Facebook makes those insanely easy to set up.

5.Mobile purchasing grows. "Those retailers not optimizing their website for mobile phones need to start as soon as possible," says Diane Buzzeo, CEO of ecommerce-software provider Ability Commerce. Research firm eMarketer adds that m-commerce more than doubled this year to $6.7 billion, and expects it to quadruple again by 2015.

6.Credit gets easier. Business owners may finally get the capital they need, says Odysseas Papadimitriou, CEO of the credit-card portal CardHub. Underwriting standards relaxed this year and will continue to loosen up in 2012, he says.

7.Services head offshore. Service-sector businesses will be in demand overseas, Elance forecasts. This year, U.S.-based contractors exported their services to more than 140 countries through Elance's freelance portal.

8.Daily deals die down. Experts agree: The daily-deal space is oversaturated with competing offers. Also, many business owners lost money doing daily deals. Expect a shakeout, both in the number of deal companies and in the types of deals offered.

9.Retail-format experimentation picks up. From pop-up stores to smaller-format Wal-Marts to food trucks, expect more retailers and restaurateurs to experiment with their store layouts. As the economy slumbers, retailers will look for ways to make cheaper, smaller footprints work, the Booz and Company's "2012 Retail Industry Perspective" report says.

10.More collaboration. This one's my prediction: the small businesses that stay afloat will be the ones that reach out to complementary businesses in their town or their industry and find ways to help each other.

BUSINESS BIRTHS AND DEATHS IN WALES 2010

2011-12-12T09:00:00.000Z

As those who read this blog regularly are no doubt aware, I believe passionately in entrepreneurship as the main vehicle by which the global economy can recover again after the worst recession since the 1920s.

In my opinion, the passion, creativity, innovation, perseverance and sheer hard work of entrepreneurs are the vital ingredients needed to get economies moving again.

Given this, I was hoping that the latest data on business births and deaths, published by the Office for National Statistics last week, would have some good news for the Welsh economy and show that it was on the road to recovery.

Unfortunately, my optimism was misplaced.

Instead, the official statistics showed that the situation in Wales was worse than expected, especially compared to the other devolved nations.

For example, the data released showed that in 2010, there were 7,505 enterprise births in Wales as compared to 8,325 in 2009. This represented a decline of 9.9 per cent, the worst performance of any region in the UK. In contrast, the number of new enterprises increased by 16.4 per cent in Northern Ireland and by 5.5 per cent in Scotland.

Only Cardiff, out of all the counties in Wales, showed any increase in new business starts.
In terms of business closures, the statistics are also depressingly bad for the economy. The number of business deaths has increased by 9.5 per cent with only London and Yorkshire and Humberside performing worse in terms of the number of businesses that have closed down during the period 2009-2010.

This means that the total stock of businesses in Wales continues to decline (see graph below). Given that the average turnover of all businesses in Wales is around £100,000, this means that, in the last year alone, a minimum of £300 million has probably been lost to the Welsh economy.

Therefore, Wales seems to be losing ground in terms of entrepreneurial activity to other parts of the UK. This is despite having tens of millions of pounds of additional European Structural Funding available to support new business creation, funding which seems to be having little effect on increasing the number of start-ups, especially in our poorer regions.

For example, the most recent results from the European Structural Funding Programme show that the number of new businesses being created in the more deprived parts of Wales is well behind target. Instead of 3,439 firms being set up by October 2011, only 1,140 had been established i.e. only a third of the expected output.

Something is clearly going wrong in terms of encouraging greater numbers of new firms in Wales and as I have emphasised many times in this column, I believe this is down to the lack of vision and a comprehensive strategic approach to develop entrepreneurship as the poorest region of the UK.

Of course, it was not always this way and Wales once had the world's first regional enterprise strategy, namely the Entrepreneurship Action Plan for Wales (EAP). Whilst managed by the Welsh Development Agency, it was the private sector, universities and voluntary bodies that led its design and implementation.

And, more importantly, it worked, as the evidence on start-ups clearly shows.

During the period 2002 and 2004, the number of new enterprise births in Wales went up from 8,970 to 11,525, an increase of 28 per cent. In contrast, after the EAP was abolished, the number of new firms created in Wales fell by 28 per cent between 2004 and 2009, thus reversing the success of the programme, a trend that has sadly continued as the recent statistics have clearly shown.

In fact, if Wales had kept the same level of business creation as at the height of the EAP, then an additional 13,500 new businesses would have been created during the last six years, with considerable impact on employment and prosperity in Wales.

As governments around the World struggle to develop comprehensive strategies to deal with the current economic crisis, Wales already has a tried and tested approach that has already been proven to make a real difference to the economy by releasing the entrepreneurial potential of the Welsh population.

Therefore, policymakers at the Department for Business, Enterprise, Science and Technology could do worse than to dig out an old copy of the Entrepreneurship Action Plan for Wales and study it carefully.

This would not only create an understanding of how to arrest the decline in new business starts, but might also help ensure that our entrepreneurs are again driving forward employment growth and prosperity in the Welsh economy.

TURKEY AND THE DIGITAL ECONOMY

2011-12-05T09:00:00.000Z

Last week, I was honoured to be speaking at a conference in Istanbul on the future of the digital economy in Turkey.

Attended by around 500 businesspeople, the event brought together speakers from government, academia and industry to discuss how this fast growing sector was having an impact on the economy.

Unlikely as it seems, Turkey has been one of the rare economic success stories of the last couple of years as the rest of the World emerges from recession.

Led by its charismatic leader, President Recep Tayyip Erdoğan, the country’s relative wealth grown by six per cent in 2011 whilst its neighbours to the west have been in the doldrums. In fact, whilst much of the European Union looks set to fall back into recession next year, the Turkish economy looks set to grow again in 2012, albeit at a rate of three per cent.

There are numerous reasons to explain this growth, such as the fact that the country has a diversified industrial base, a fairly stable political environment and a strong domestic market.Of course, there remain a number of key factors that could be a drag on the Turkish economy if they are not resolved. These include limited access to capital, especially for young people, as well as a lack of an entrepreneurial culture. There are also difficulties in hiring and firing, with Turkey ranking among the most difficult countries in this element of business.

Despite these issues, the digital economy continues to grow in Turkey, and whilst the e-commerce market in 2010 was worth £10.4 billion, it had already hit £6.8 billion in the first six months of 2011. In addition, the twenty largest Turkish e-commerce companies have grown by an average of 60 per cent in the last twelve months.

And investors are beginning to take notice of Turkey as a fast emerging market in this area after years of neglect. For example, online specialists eBay recently acquired 93 percent of Turkey’s largest auction site, GittiGidiyor, in a deal which valued the company at £137 million.

The microchip maker Intel has also made its first investments in Turkey this year, backing a leading online media company Nokta as well as the shopping site Grupanya. In addition to corporate takeovers, venture capitalists and business angels are also taking a closer look at the Turkish economy. Kleiner Perkins, one of Silicon Valley’s major venture capital firms, recently invested £17 million into Trendyol, a large private shopping site whilst social gaming site Peak Games, seen as company to watch by analysts, attracted £8 million from various investors.

So why is this all coming together now?

First of all, Turkey has around 35 million Internet users, ranking the country as twelfth in the World and the fifth largest in Europe, after Germany, UK, Russia and France. In addition, not only do Turks spend more time online than the average European, they are also more interactive when they get online, being the fourth most active in the world on Facebook and the eighth most active on Twitter.In terms of online shopping, the availability of credit and easy logistics are key to the development of one of the fastest growing sectors of the digital economy.

In Turkey, there is 62 per cent credit-card penetration rate among consumers, second only to the UK in Europe, and there is a group of shipping firms is already active that can deliver products anywhere in a radius of more than 350 miles around Istanbul within 24 hours.More importantly, it is expected that the digital economy will continue to develop at a faster rate than many other nations in this country of 73 million people.

Consider the fact that half of Turkey’s population are under the age of twenty eight, ensuring that a digital culture where social media is part of the majority of the population’s everyday lives will become embedded very quickly. It is also worth noting that despite the relative lack of broadband penetration, the use of the social networking has developed at a rapid pace.

With plans for considerable investment in the country’s high-speed communication capability over the next few years, the demand for new products and services will grow even further.With the relentless march of social media affecting everyone’s daily lives, the digital world is changing quickly and who would have thought that a country at the edge of Europe would be seen as being one of the leading advocates in embracing the new opportunities of the future.

Certainly, Turkey will be an economy to watch over the next few years, not only as a political exemplar to those nations emerging from the Jasmine Revolution in the Arab World but also as a place where a major digital revolution is taking place. I can only hope that Welsh business will take advantage of this and develop trade links with a vibrant nation that is making great strides in the development of its economy.

WHERE DO ENTREPRENEURS GET THEIR MONEY?

2011-12-02T09:00:00.000Z

The latest sketchbook from the Kauffman Foundation, this time on the sources of funding for entrepreneurs from their own funds to venture capitalists.

ISTANBUL NOT CONSTANTINOPLE

2011-12-01T09:20:00.002Z

Another week, another continent!

However, I am really excited to be here in Turkey for the very first time to speak at the Digital Economy e-commerce summit, to be held over the next couple of days in Istanbul.

There are over 300 delegates at this conference and, given Turkey's economic growth and the fact that it is in the global top ten of internet usage (with 27 million internet users), the event should be one that creates considerable debate as to how this nation develops in the future.

I am particularly looking forward to the speech by David Rowan, editor of Wired magazine, on the ten trends that are going to change the digital economy in the future.

Also, as I am sharing the stage tomorrow with Zafer Çağlayan, the Turkish Minister for the Economy, it will also create an opportunity to see whether we can link in Welsh fast growth firms into this growing economy.

More on this later.

STEVE JOBS AND NEXT - A RARE VIDEO

2011-11-29T09:00:00.002Z

Hat tip to the fantastic Brainpicker website which has found a rare video of a 1986 PBS documentary known as The Entrepreneurs.

It offers "a rare glimpse of Jobs’ original vision with NeXT, from his aspirations for higher education and simulated learning environments to his decision-making process on price point and product features to his approach to company culture and motivational morale".

Watch and marvel.

CAMBRIDGE PHENOMENON - LESSONS FOR WALES

2011-11-28T08:35:00.001Z

Last week, Sir Terry Matthews announced the establishment of the Welsh version of his bootcamp for technology entrepreneurs via the Alacrity Foundation.

Based in Newport, the scheme will take on ten graduates to develop products in information technology, eventually creating companies in Wales by the end of the year in which the recruits will have a 25 per cent stake.

Such a scheme is long overdue and may finally begin to address the innovation deficit that has plagued Wales for too long when compared to other parts of the UK.

In fact, the challenge in developing a growing knowledge-based economy were demonstrated by a report released this month on one of the great success stories when it comes to maximising regional innovation potential.

The city of Cambridge in East Anglia has long been seen as one of the major innovation hotspots not only in the UK but in the World. The development of this success was first documented by the seminal 1980s publication, “The Cambridge Phenomenon”, which demonstrated how technology-based firms had been developed around one of the World’s top universities.

The new report, entitled “Cambridge, from the lab to the limelight” picks up the story twenty-six years later on the continuing growth of the region.

Despite being a small educational city with a third of the population of Cardiff, it is estimated that there are now 1,500 technology firms situated in Cambridge itself with around 40,000 employees. Contrast this to 1984, when the Cambridge Phenomenon report identified 300 firms employing 15,000 people.

However, if we look at the greater Cambridge region itself (20 mile radius), there are currently 27,500 firms, employing more than 700,000 people, mostly in high skilled industries. Their contribution to the local economy is estimated to be around £12billion per year, which is roughly a fifth of the annual GVA of the entire Welsh economy.

In fact, seven billion dollar businesses have been developed in the Cambridge area during the last fifteen years including Autonomy, which was recently sold to Hewlett Packard for $12billion.

And the effect of this can be seen in the wider economic statistics. The unemployment rate in Cambridge is 2.1 per cent (as compared to 9.3 per cent in Wales) and the number of jobs in the research and development sector is eighteen times the national UK average.

So what are the reasons for this success?

Obviously, it has one of the World’s top universities with around 7,000 graduate students every year but both Oxford University and Imperial College London are also regularly in the top ten global institutions and have nowhere near the track record of Cambridge in developing technology-based firms.

Some have suggested whilst the University itself is the source of knowledge on which new companies are based, the commercialisation potential is magnified through the presence of a strong innovation ecosystem.

These includes a small but significant network of institutions and associations that foster innovation and support entrepreneurship working alongside a group of successful entrepreneurs who have become the angel investors that fund the new high technology companies in the region.

It is also worth noting that the Cambridge economy isn’t about picking winners but about supporting commercialisation of ideas from wherever they emerge. That is why some of the leading companies are not limited to one or two sectors but are based across a spectrum of industries ranging from biotechnology to gaming to medical technology to materials.

Is the Cambridge Phenomenon unique or can such success be replicated?

In Wales, perhaps the biggest problem is that there still seems to be a disconnect between the different actors in the private and public sectors when it comes to developing a similar approach in Wales, especially in terms of innovation support.

Certainly, the failure of the Technium programme to have any real impact on changing the innovation ecosystem and developing any significant cluster of high technology companies shows that there must be greater partnership and interaction between government and business if such ambitious projects are to succeed.

Of course, there are also problems in Cambridge that can be instructive to Welsh policymakers.

For example, a recent study suggested that one of the key issues is the lack of facilities for new R and D firms to move from pure research into production or manufacturing, which then results in those firms leaving the region or even the country altogether. It is certainly something that urban planners in Wales need to consider carefully if there is to be a focus on stimulating greater numbers of spinouts from the University sector or via the Alacrity Foundation, especially as Wales is the only region in the UK which does not have a proper science park.

Therefore, I am sure that there are lessons to be learnt from the Cambridge experience, especially by those who are working hard to develop Cardiff, Swansea and Newport, all of which have aspirations to become cities based on the knowledge emanating from the local university sector.

Sir Terry’s bootcamp programme is certainly a step in the right direction but there is a real need to consider what other key factors are necessary within the Welsh economy to not only develop the successful technology companies of the future, but to grow and retain them here in Wales.

THE SINGAPORE ECONOMY - WILL IT CONTINUE TO GROW?

2011-11-24T09:00:00.000Z

Arrived in Singapore yesterday afternoon for a four day jetlagged visit.

Given the fact that the island economy is still seen as one of the growth regions of the World, it is always revealing to examine what has been going on in recent months.

Certainly, growth has been outstripping that of the UK, with the Straits Times reporting that Singapore's economy is expected to grow by around 5 per cent in 2011.

Despite this good news, the expansion of the economy is not expected to last and is expected to slow down next year - growth is estimated at anywhere between 1 and 3 per cent. The last time Singapore experienced such weak growth was in 2008 when the economy expanded by just 1.5 per cent (although it contracted by 0.8 per cent in 2009).

However, in calculating the state of the economy in 2012, the Ministry for Trade and Industry has not factored in downside risks to growth, such as that of a worsening debt situation leading to a full-blown financial crisis in the advanced economies. In fact, the outlook for Singapore's export-dependent economy seems volatile, with some economists even warning of a contraction if global demand continues to falter, especially following a 16 per cent drop in non-oil exports in October, double what the market had expected.

With non-oil domestic exports to the US falling by 51 percent and to the European Union by 31 percent, it demonstrates that the Asian economy is still affected by what goes on in the old economies of the World.

However, Singapore remains a growth centre with which other nations are keen to do business, which is not surprising given that it was ranked first in the World for employment in knowledge-intensive industries, innovation linkages and export performance by the Global Innovation Index (and third overall in the World).

Take, for example, the France-Singapore Innovation Days programme, put together to facilitate greater linkages between the two nations, which included showcasing five French companies and four Singaporean companies at different stages of development. Certainly, I would like to see the Welsh Government trying to do more to support linkages, especially in linking up our university sector with both higher education and industry in Singapore.

GOOGLE AND STANFORD - A STORY WORTH LISTENING TO

2011-11-22T09:00:00.003Z

Google founders Larry Page and Sergey Brin talk about the influence of Stanford University as a catalyst for university-industry interaction.

ENCOURAGING ENTREPRENEURSHIP AMONG YOUNG PEOPLE

2011-11-21T09:00:00.001Z

For a man who is not shy in courting publicity, it is not surprising to see Sir Richard Branson in the business press again this week.

Yet his audacious purchase of Northern Rock, soon to be merged with Virgin Money, may have overshadowed another more important development namely the publication of a report sponsored by Virgin Media entitled “Control Shift: the Rise of Young Entrepreneurs”.

Through the Control Shift campaign, hundreds of young entrepreneurs have been consulted by Branson’s team on what can be done to develop and encourage a new generation of businesspeople in this country.

By challenging current thinking, they have developed a set of proposals that are a wake-up call to all politicians and policymakers who want to reinvigorate the economy.

For too long, entrepreneurship has been seen as a last resort policy by many to economic development and unemployment. Yet there is overwhelming evidence that start-ups are the job creators of the economy and whilst entrepreneurs need courage, conviction and commitment, they also need investment and, more importantly, support.

So what do young people themselves believe could be done to help develop a more entrepreneurial climate amongst their peers?

First of all, they propose that the way that entrepreneurship is taught in schools should be transformed to ensure that self-employment is promoted as a viable career option for students. This can be done through increased exposure to real life businesses and utilising local businesspeople as mentors.

Secondly, a greater culture of collaboration should be encouraged in enterprise support for young people so that information is not split amongst different organisations, thus creating confusion and duplication for those wishing to start a business. Instead the public, private and voluntary sectors need to work more closely together so that potential entrepreneurs can be supported effectively and efficiently.

Thirdly, big business should be encouraged to support new start-ups by adjusting their processes and making smarter use of their assets, such as better procurement, using staff as business mentors and opening up office space for new firms.

Fourthly, society should look at the way it invests in young people. Whilst it is relatively easy for an 18 year old to get a student loan to go to University, it is almost impossible to get a loan to start a business. Government could change this by ensuring that the student loan company makes start-up loans available to young people on the same terms as student loans.

Finally, young people should be encouraged to do it for themselves. Whilst most of the news is about the rising unemployment and the lack of job opportunities, there is a requirement for everyone to encourage young people to take full advantage to explore and exploit the opportunities in the market.

At a time when unemployment amongst 16-24 year olds has passed the one million mark in the UK, it is critical to support those young people who want to start up a business and contribute to the economic wealth of this nation.

With the right advice and support, they could develop the next big thing and many of the superstar companies of the last decade were developed not by experienced managers but by young people. Sergei Brin and Larry Page were both in their mid twenties when they established Google and Mark Zuckerberg was only nineteen when he launched Facebook in his dorm at Harvard University.

Even Branson himself started off his entrepreneurial career in his teens by establishing a student magazine whilst at school.

However, whilst the vast majority of young people have a strong entrepreneurial spirit and display incredible drive and enthusiasm, they still need support on their business journey. If government, as well as large firms, would do more to help nurture young entrepreneurs and maximise their potential, then the UK can emerge from this austere era into one of opportunity, enterprise and growth.

THE WORLD OF SOCIAL MEDIA IN 2011

2011-11-17T11:32:00.000Z

If you thought the impact of social media couldn't get more pervasive, it is worth having a look at this presentation.

WALES AND CHINA - SHOULD WE BE FOCUSING OUR EFFORTS ON THE SMALLER INNOVATIVE CITIES?

2011-11-16T08:13:00.000Z

The First Minister of Wales recently visited China to sign an agreement with Chongqing, a major city in the west of the country.

This commits Wales to furthering economic development links and continuing to work together with this municipality in the fields of science, technology, culture, health, education, agriculture, forestry management, environment, governance and tourism.

Whilst a visit by the First Minister to China to develop further links is to be welcomed, this is hardly groundbreaking progress.

In fact, this latest relationship merely builds on an earlier memorandum of understanding (MOU) between the Chongqing Municipal Government and the Welsh Assembly Government, signed by Rhodri Morgan in 2006 in which they agreed to collaborate and co-operate in a number of areas.

As regular readers of this blog will know, I am an avid supporter of Wales going out to the World to not only trade with different nations, but to form important relationships that can help change the way we work and live.

However, I find it disappointing that in twelve years of devolution, the Welsh Government has made little progress beyond reaffirming an existing arrangement with a single Chinese City.

One would have thought that as a small trading nation, we would be choosing our partnerships carefully, especially as much of the focus of the recent trade missions was in building links between universities and businesses in both countries.

In fact, it is worth noting that according to the influential business periodical, Forbes China, Chongqing was not rated as one of the twenty five most innovative cities on the Chinese mainland this year.

Ranking	City	Administrative Levels	Province	Innovation Index
1	Shenzhen	City with separate budgets	Guangdong	1
2	Suzhou	Prefecture-level	Jiangsu	0.998
3	Shanghai	Municipality	-	0.992
4	Beijing	Municipality	-	0.978
5	Wujiang	County-level	Jiangsu	0.950
6	Wuxi	Prefecture-level	Jiangsu	0.949
7	Hangzhou	Provincial capital	Zhejiang	0.945
8	Kunshan	County-level	Jiangsu	0.922
9	Changshu	County-level	Jiangsu	0.920
10	Zhangjiagang	County-level	Jiangsu	0.919
11	Dalian	City with separate budgets	Liaoning	0.892
12	Dongguan	Prefecture-level	Guangdong	0.889
13	Nantong	Prefecture-level	Jiangsu	0.879
14	Ningbo	City with separate budgets	Zhejiang	0.876
14	Shaoxing	Prefecture-level	Zhejiang	0.876
16	Yixing	County-level	Jiangsu	0.864
17	Zhongshan	Prefecture-level	Guangdong	0.861
18	Wuhu	Prefecture-level	Anhui	0.847
19	Guangzhou	Provincial capital	Guangdong	0.838
19	Hefei	Provincial capital	Anhui	0.838
21	Taicang	County-level	Jiangsu	0.814
22	Tianjin	Municipality	-	0.803
22	Foshan	Prefecture-level	Guangdong	0.803
24	Yangzhou	Prefecture-level	Jiangsu	0.784
25	Changzhou	Prefecture-level	Jiangsu	0.781

Not surprisingly, the number one city on the list was Shenzen in South East China (across from Hong Kong) where the total output value of high-technology products reached 1 trillion yuan (£100 billion) in 2010.

Therefore, if Wales is to build international links that benefit our universities and the technological capacity of our business community, then surely policymakers should consider innovation hotspots like Shenzen.

But given the size of Wales, perhaps it should not be large cities like Shenzen or Chongqing that should be the focus of the Welsh Government, especially as they would also be developing partnerships with other economies looking for trade links with the most populous areas of China.

For example, businesses from Sheffield have also recently taken part in a trade mission to Chongqing as they seek out international trade opportunities. And in the same week that Carwyn Jones was signing his new MOU, the Belgian port of Antwerp was entering into agreements with the city for training purposes and to create trade partnerships.

So where should Wales focus its effort on building stronger links with China?

It is worth noting that more than half of cities on the list of the most innovative in China are far smaller than Chongqing.

Indeed, of the top ten, four have a population of less than two million and are located less than two hours’ drive from the business giant that is Shanghai.

Given their small size, perhaps these are the cities that Wales has more in common with and, more importantly, would be more willing to have a closer relationship than the one we currently enjoy with Chongqing.

The Welsh Government remains determined to focus all of its efforts on one Chinese city, but surely we should start to build links with some of the smaller innovative cities in China?

At the very least, it would enable universities and businesses to identify new opportunities and establish a more direct and less competitive route into one of the World’s fastest growing economies.

HOW APPLE IS ORGANISED - LESSONS FOR OTHER ORGANISATIONS?

2011-11-11T09:00:00.000Z

Should Universities be organised like Apple?

In fact, could you imagine a higher education institution being managed without a single committee?

I could.

COMPARING SCOTLAND AND WALES ON ECONOMIC ADVICE

2011-11-10T08:15:00.000Z

Yesterday the Welsh Government's Council for Economic Renewal met to discuss the way forward for the Welsh economy.

Formerly known as the Business Partnership Council, it provides advice to help inform economic and business policies in Wales.

Under the Government of Wales Act 1998, the Government has a statutory duty to consult with businesses where the exercise of its functions impact on them.

This duty to consult was strengthened by the Government of Wales Act 2006, which required Welsh Ministers to make a Business Scheme setting out how they proposed to consult with business.

The Council for Economic Renewal is made up of a range of business, social enterprise and trade union representatives and is chaired by the First Minister.

According to today's Western Mail, leading members include :

PAUL BYARD: Head of external affairs for manufacturing employers’ organisation EEF in Wales. Said earlier this year that the group’s membership had shown optimism that there would be future growth.
JULIE COOK: Wales TUC national officer. Has been critical of public sector job cuts, particularly for its perceived disproportionate effect on women.
HEATHER EASON: Policy adviser at Wales Social Partners Unit. Also a freelance translator who speaks fluent Esperanto.
IAN GALLAGHER: Policy manager for south-west England and Wales at the Freight Transport Association. Has called for a cut in tolls on the Severn crossing.
ALAN GARLEY: GMB regional secretary for Wales. Was prominent in the campaign to keep the Burberry factory in the Rhondda Valley open.
RICHARD HOUDMONT: Director for Wales and Ireland for the Chartered Institute of Marketing. A well-known business commentator and advocate of greater innovation.
RICHARD JENKINS: Director of FMB Wales. Has called on the Welsh Government to make stronger representations to Westminster for a reduction in the rate of VAT levied on repair and maintenance work.
MARTIN MANSFIELD: General Secretary of the Wales TUC. Recently reiterated his belief in the value of collaboration to help businesses through economic difficulties without job losses.
PHIL ORFORD: Chief executive of the Forum of Private Business. Said this year that small firms would continue to experience tough times due to reduced public spending, increased costs and late payments.
RICHARD PRICE: Planning and policy adviser for Wales for the Home Builders Federation. Said last week that many housebuilders were concerned about a eurozone fall-out.
NON RHYS: Policy manager for the Federation of Small Businesses in Wales. Said earlier this year: “Our members have told us that they want to employ, but do not have the resources”.
ANDY RICHARDS: President of the Wales TUC. Has described public sector cuts as an “assault on our class designed to shift the blame for the economic crisis to the public sector”.
DAVID ROSSER: The director of CBI Wales, who has joined the Welsh Government on a six-month secondment. He is taking up the position of director of innovation and anchor companies within the Department for Business, Enterprise, Technology and Science from January.
DEREK WALKER: Chief executive of the Wales Co-operative Centre. Has argued that employee-owned businesses can enjoy a “real competitive advantage in tough economic conditions”.
GARETH WILLIAMS: Chairman of the Institute of Directors in Wales. Called on the Welsh Government earlier this year to promote Wales internationally

A fuller list of normal attendees is available on the Welsh Government website. However, it is worth comparing this group to the Council of Economic Advisers which the Scottish Government has put together:

SIR GEORGE MATHEWSON (Chair) One of the most eminent Scottish businessman of his generation. His period as Chief Executive and then Chairman of the Royal Bank of Scotland inspired the transformation of the bank into a global success story. Sir George previously also spent 6 years as the chief executive of the Scottish Development Agency.
CRAWFORD BEVERIDGE, Executive-Vice President and Chairman of Sun Microsystems in Europe, the Middle East and Africa. From 1991 to 2000, Crawford Beveridge served as Chief Executive of Scottish Enterprise. He brings a wealth of international business experience.
FRANCES CAIRNCROSS - Rector of Exeter College at Oxford University. Previously she worked for 20 years on 'The Economist' magazine. She chaired the Economic and Social Research Council for six years until 2007 and is a well respected author whose works include 'Costing the Earth' and 'Green, inc'.
PROFESSOR ANDREW HUGHES - Hallett Professor of Economics and Public Policy at George Mason University in the US and visiting Professor of Economics at the University of St Andrews. He specialises in international economic policy and has acted as a consultant for the World Bank, the IMF, the Federal Reserve Board, the UN, the OECD, the European Commission and central banks around the world.
PROFESSOR JOHN KAY - A leading economist and author. The author of several influential books, Professor Kay is a regular contributor to the Financial Times. He is a fellow of St John's College, Oxford and served as Director of the Institute for Fiscal Studies. He has served as a Professor at the London Business School and the University of Oxford. He is currently a visiting professor at the LSE.
PROFESSOR ALEX KEMP - Schlumberger Professor of Petroleum Economics at the University of Aberdeen. He is a leading energy and taxation expert who has advised the World Bank, the United Nations, and individual governments around the world. In recent times, Professor Kemp has expanded his research to include the economics of renewable energy and how best to foster carbon capture.
PROFESSOR FINN KYDLAND - Henley Professor of Economics at the University of California, Santa Barbara. He was awarded the Nobel Prize for his work in dynamic macroeconomics in 2004.
JIM MCCOLL - Chairman and Chief Executive of Clyde Blowers - a company transformed under his leadership into a portfolio of global engineering companies. He also serves as Chairman of the Welfare to Work Forum which has seen 15,000 Scots enter employment.
PROFESSOR SIR JAMES MIRRLEES - Professor Emeritus at Cambridge University and distinguished professor-at-large at the Chinese University of Hong Kong. Sir James was awarded the Nobel Prize for his work on economic models and equations about situations where information is asymmetrical or incomplete.
PROFESSOR FRANCES RUANE - Director of Ireland's Economic and Social Research Institute previously an Associate Professor of Economics at Trinity College, Dublin. She is widely published in the area of international economic and industrial development.
THE LORD SMITH OF KELVIN - Chairman of the Weir Group and Scottish and Southern Energy. He also serves as a non-executive director of 3i Group, Standard Bank Group and Aegon UK. Lord Smith chairs the Glasgow 2014 Commonwealth Games Organising Committee, and also chairs the Smith Group, a group of dedicated educators and business and civic leaders who are determined to offer more opportunities to young Scots

With respect to all the individuals on the Council for Economic Renewal involved who are merely doing their job and have been invited by the Welsh Government to represent their organisations, this is like comparing Porthmadog Town FC with Man Utd or an X-Factor finalist with Bruce Springsteen.

In fact, I am at a loss to understand why the Welsh Government would set up a system to take economic advice from a group made up largely of business representatives/lobbyists and trade unionists rather than a forum of leading businesspeople and international thinkers. Indeed, with the honourable exceptions of Gareth Williams of the IOD and Phil Orford of the FSB, there is not one individual on the Council for Economic Renewal who has operated at the coalface of business outside of Wales.

Does this merely reflect the lack of ambition in Wales compared to our Celtic Cousins? Why do we continue to be inward looking in everything that we do and revert back to the old committee style approach to everything?

Surely we are better than that?

Wales could and should have developed a completely new way of thinking in providing economic advice to the government. In fact, if we need innovative new ideas and entrepreneurial plans to grow the economy during the next few years, then we should bring together entrepreneurs, business leaders and innovators to achieve this. Indeed, on this blog, back in December 2006, I did suggest that:

“the First Minister should urgently convene a summit of our leading businesspeople and entrepreneurs - such as Sir Terry Matthews, Sir Christopher Evans and Henry Engelhardt - to get their views on what is needed to kick start the Welsh economy.”

And for the first time this week, Ieuan Wyn Jones can't blame the current Labour Government for this state of affairs as he himself, as the Minister for Economic Development, put together this new Council for Economic Renewal by essentially using the same people who had sat on the Business Partnership Council for years rather than doing something creative and innovative.

I understand that there is statutory requirement to consult with business groups but can't that be done in a separate form? If not, then the Council for Economic Renewal should have all the chairs of the nine industry panels - all leading business people in Wales - represented and reduce the trade union and lobbying groups representation to two seats each.

Perhaps then we can finally come up with a more positive approach to sorting out the problems of the Welsh economy rather than the defeatist approach put forward by the First Minister yesterday.

STEVE JOBS AND BUSINESS SUCCESS

2011-11-09T08:08:00.000Z

REGIONAL GROWTH FUND AND ITS EFFECT ON THE NORTH WALES ECONOMY

2011-11-08T09:00:00.000Z

DAILY POST ARTICLE 7TH NOVEMBER 2011

Last week, the UK government announced that it would be looking to award £950 million to boost the economy through the second round of its Regional Growth Fund.

This is a £1.4 billion fund that aims to stimulate private sector investment by providing support for projects that offer significant potential for long-term economic growth and the creation of additional sustainable private sector jobs.

Sounds fantastic for the economy but the bad news for Wales is that the Regional Growth Fund is based in England only and, as a result of devolution, the Welsh Government will need to find its own funding for such economic development levers What is more worrying though is that increased spending across the border on economic development may well have a knock on effect on North Wales.

Certainly, the neighbouring area of the North West of England is one of those regions that has benefited with funding of £227m awarded to 39 projects, some of which are going directly to private businesses and others that are supporting key new infrastructure projects.

For example, Burnley Council's bid for £8.8m will reinstate 500 metres of rail track that, in turn, will halve the train travel time between Burnley and Manchester. It will also help to regenerate a collection of former mill buildings along the Leeds-Liverpool canal.That will certainly help the area become more attractive to potential investors.

In addition, Energy Coast West Cumbria has been awarded £5.5m to help firms maximise opportunities in nuclear and renewable-energy supply chains, a move that could have serious implications for Anglesey’s bid to become one of the key centres for the energy sector in the UK.

In the private sector, one of the companies that has individually benefited from the fund is Cheshire-based Bentley, which received a £3m grant to support the development of a new engine plant, safeguarding more than 200 jobs.

So, whilst the North West of England has access to funding for projects that will create over 47,000 jobs, what is happening here in Wales?As many businesses are no doubt aware, the last Welsh Assembly Government decided to abolish grants to businesses, replacing it with the Economic Renewal Programme (ERP).

Yet, according to data released last month, only 16 firms have been helped by the ERP in the first six months of 2011.But what about the billions of European funding available to the poorest parts of Wales, including Anglesey, Conwy, Gwynedd and Denbighshire?

Despite the Welsh Government having already committed over £1.5 billion to 236 projects since 2007, only 256 jobs have been created in Anglesey, only 46 new businesses created in Conwy and only 254 participants have gone on to further learning through European funded training schemes in Gwynedd.

That is a woeful performance and there are real worries that the effect of the Regional Growth Fund along with those enterprise zones already established in the North West of England, will place North Wales at a serious disadvantage at a time when support for private firms is critical.

But this should not be surprising, as the private sector has been largely excluded from direct participation in European funding schemes in Wales, with the vast majority of projects going to Welsh Government or local authorities.In contrast, there is now an emphasis on greater partnership between the public and private sectors in England, with council and business groups coming together to bid for projects, as they did for enterprise zones.

That is something that has been sadly missing in Wales over the last decade and I fear that the billions of European funding that could, and should have made a real difference, as the Regional Growth Fund will do in the North West of England, will have little effect on the transformation of the North Wales economy.

FEMALE ENTREPRENEURSHIP - HOW CAN IT BE ENCOURAGED FURTHER IN WALES?

2011-11-06T09:00:00.000Z

Western Mail Article 5th November 2011

Last month, a campaign was launched to increase the number of women entrepreneurs in the UK by 100,000 over the next decade.

Everywoman, the largest female business community in the UK, has linked up with the Federation of Small Businesses (FSB)'s Real Life Entrepreneurs Campaign to help encourage more women to set up new ventures in the UK.

Their argument is simple, namely that an extra 150,000 start-ups would be created per year if women started businesses at the same rate as men. This is not surprising as, according to the last Global Entrepreneurship Monitor report for the UK, female early-stage entrepreneurial activity in 2010 was 4 per cent of the adult population as compared to 9 per cent for men i.e. the ratio of female to male early-stage entrepreneurial activity was 44 per cent.

As well as a focus on encouraging more women, the FSB's campaign will also promote enterprise amongst young people, the over-50s, those with disabilities, ex-armed forces personnel and those who are currently living on benefits.

This strategy by the FSB should be widely applauded but for those of us who have been involved in entrepreneurship in Wales, it has a sense of real deja vu, given that, over a decade ago, there was a particular focus within the Entrepreneurship Action Plan for Wales on encouraging more starts-ups amongst women, minority ethnic groups, social enterprise and young people.

In fact, I remember that, thanks to the promotional campaigns managed by the Welsh Development Agency and the various start-ups programmes targeted at women, female entrepreneurship in Wales in 2004 was at three quarters that of the male entrepreneurial activity, one of the best gender balances in the whole World. By focusing on issues such as blocked mobility in the workplace and the issue of the so-called glass ceilings, more women in Wales were encouraged to start their own business.

Since the demise of the Entrepreneurship Action Plan in 2005, the targeting of enterprise support towards women has also died a death. In fact, there is now a policy by the Welsh Government that all new businesses are exactly the same and, as a result, there is no specific support to encourage more women to start their own businesses.

Indeed, there is an expectation that women should conform to male behaviours despite overwhelming academic evidence that female experience and practice can differ significantly to those of male entrepreneurs.

For example, there is strong evidence that women start businesses with fewer resources, restricted access to business clients, and slower and less reliable delivery of orders from suppliers. In terms of finance, there is also a widespread belief that women face greater difficulties in obtaining funding for a business start than their male counterparts, with female entrepreneurs starting off with lower levels of cash in the business.

Unlike what is happening in Wales, research shows that enterprise training courses should focus on addressing the weaker financial position that many women start from, given the reluctance of women to take on debt at start-up, which has long term implications for the development of their business. In addition, there should be greater use of training materials that feature successful women entrepreneurs in a variety of industries. Such role models expand the horizons and stimulate the aspirations of potential female entrepreneurs.

Women are a key part of any enterprise economy, and with female unemployment at its highest for twenty three years, there could, and should, be a focus on encouraging greater numbers of female run businesses if Wales is to emerge from the economic downturn as a more entrepreneurial nation.

So what could the Welsh Government do?

According to the Women’s Enterprise Policy Group, policymakers could introduce a number of measures to realise the multi-billion pound opportunity which growth from female-led enterprises can bring to the economy. These include the appointment of a women’s enterprise champion within government to raise awareness of economic benefits of encouraging more women to start and grow businesses. There should also be investment in business growth programmes for existing female entrepreneurs and doubling the number of women entrepreneurs using mentors and/or networking opportunities by promoting activities amongst networking groups. Finally, given the importance of higher and further education in economic development, government should ensure that current university and college entrepreneurship support is attractive and useful to young women, closing the gap between the numbers of young men and young women starting businesses.

Whereas very little is being done in Wales, the same is not true elsewhere in the UK. For example, a new £5.5m Women’s International Centre for Economic Development in Liverpool has just opened to provide a range of services focused on women’s start-up businesses and small and medium-sized enterprises. This includes ’incubation’ units for new and high growth women enterprises and an international research and knowledge centre focused on women’s enterprise and wider economic development issues.

The first woman to hold the business and economic development portfolio in the Welsh Government has hit the ground running with the creation of taskforces which are examining everything from micro-businesses to city regions to business rates.

Given this, isn’t it time also for this government to also look closely at the massive entrepreneurial potential that exists amongst half of the Welsh population and do something positive to encourage more female entrepreneurs in Wales?

BROADBAND IN WALES

2011-11-04T08:41:00.000Z

Ofcom have yesterday released a series of maps that show that homeowners and businesses in Wales have some of the slowest broadband speeds in the UK.

Below are a series of digital communications coverage maps which show the state of the UK's broadband availability.

The ranking for each category is colour coded.

Overall broadband coverage

Each area has been ranked on how they score on four broadband metrics, on a scale of 1 to 5, with 1 the highest or fastest, and 5 the lowest or slowest. The individual scores have been combined to provide an overall view of broadband in each area.

Average broadband take-up

Each area has been ranked from 1 to 5 on the number of broadband connections as a percentage of the total postal addresses in the area.

1= 80% or more
2= 70% - less than 80%
3= 60% - less than 70%
4= 50% - less than 60%
5= less than 50%

Percentage receiving less than 2Mbit/s

Each area has been ranked from 1 to 5 on the percentage of broadband connections that have modem sync speeds of less than 2.2Mbit/s.
1= less than 5%
2= 5% - less than 10%
3= 10% - less than 15%
4= 15% - less than 20%
5= 20% or mor

Superfast broadband availability

Each area has been ranked from 1 to 5 on the percentage of residential and non-residential premises where either Virgin Media cable, Openreach Fibre-To-The-Cabinet or Digital Region networks are available.
1= 90% availability or more
2= 70% - less than 90%
3= 50% - less than 70%
4= 30% - less than 50%
5= less than 30%

Average modem sync speed

Each area has been ranked from 1 to 5 on the average modem sync speed which is the speed at which a customer's broadband modem communicates with their Internet Service Provider's equipment in the exchange.
1= 16Mbit/s or faster
2= 10Mbit/s - slower than 16Mbit/s
3= 8Mbit/s - slower than 10Mbit/s
4= 6Mbit/s - slower than 8Mbit/s
5= slower than 6Mbit/s

THE REGIONAL GROWTH FUND

2011-11-03T07:37:00.000Z

This week, the government announced that it would be lookingto give out £950 million to boost the economy further through the second round of its Regional Growth Fund.

Based in England only, this is a £1.4 billion fund that operatesover three years (2011 to 2014) with the aim of stimulating private sectorinvestment by providing support for projects that offer significant potentialfor long term economic growth and the creation of additional sustainableprivate sector jobs.

In particular, the fund aims particularly to help supportthose areas and communities that are currently dependent on the public sectorto make the transition to private sector led growth and prosperity.

To qualify for support from the Regional Growth Fund,projects should demonstrate that they:

create additional sustainable private sector growth;
rebalance the economy in those areas currently dependent onthe public sector;
would not otherwise go ahead without support from theRegional Growth Fund;
offer value for money
be state aid compliant.

Similar to the Enterprise Zones in England, the Regional GrowthFund is competitive and only those bids that best lever private sectorinvestment, meet the fund objectives and criteria and offer the best value formoney will be supported.

On Monday, the UK Government announced the 119 successfulbids in the second round of the Regional Growth Fund. But it is also worthnoting the expected impact of the first round of funding, as shown in the diagram below.

According to the UK Government,

there were 464 bids for a total of £2.78 billion of funding with two thirds of the funding requests was for finance of between £1m and £5m.
Half of the bids came from three regions, namely the West Midlands, the North West and the North East and only 4 per cent from London
There were 50 successful projects in Round 1 for £450m which were expected to create 27,549 direct jobs and a further 96,654 indirect jobs in the English economy.

According to Regeneris Consulting, the real winners were the West Midlands - capturing 25 per cent of R1 funding including a £70m grant to Jaguar Land Rover and the North East of England, which had 14 successful bids across the region, capturing around 13 per cent of the funding.

In contrast, the perceived losers were London and South East England – which submitted 52 applications and got 1 approved. The North West of England also lost out, only capturing around 6 per cent of round 1 funding with no projects in either Cumbria or Lancashire.

The jobs to be created are merely projections by the companies, as we used to have with the old Regional Selective Assistance grants in Wales. The cost per direct job is slightly higher for Round 1 (at £16,334 per job) but this would be expected given that a significant number of the projects are supporting R&D and innovation. However, it is far lower than the estimated cost per job for the European Convergence Programme for West Wales and the Valleys of around £44,000 per job.

The UK Government also seems to be focusing on using large companies to leverage further investment into these regional economies. Indeed, as Regeneris Consulting point out, SMEs did poorly out of the first round of funding, with the majority going to investments in larger firms to expand facilities, increase R&D and increase employment. Only time will tell whether this will work, given that studies have consistently shown that SMEs are more effective at using such grants.

One final issue, which is more to do with the transparency of policymaking. In Wales, the Economic Renewal Programme is the closest equivalent of the Regional Growth Fund and yet it would seem that it is not performing as well, with the Welsh Conservatives claiming that only 16 firms have been helped in the first six months of 2011. In contrast to the detailed data presented by the UK Government, the biggest problem in assessing the effectiveness of Welsh Government policy is the reluctance to publish regular data on its economic programmes, something it used to do regularly to the old Economic Development Committee in the first and second Assemblies.

Perhaps this is something that Nick Ramsay, the new chair of the Enterprise and Business Committee within the National Assembly for Wales, should restore so that at least the Welsh Government is held accountable for its policies in business and economic development.

SUPPORTING GROWTH BUSINESSES - THREE FAST GROWTH 50 FIRMS MAKING THEIR MARK INTERNATIONALLY

2011-11-02T09:00:00.000Z

HSBC has established a new programme to find and reward the UK's best and most ambitious business thinkers.

Business Thinking is the bank's new initiative to find and reward the UK's best business thinkers. Through a series of networking events, it will enable businesses to exchange ideas, create new contacts and challenge their thinking.

This includes visits by the companies to international "Thought Exchanges" to Hong Kong, New York, Sao Paulo, Dubai and Paris where they will get the chance to network, meet local businesses, learn from thought leaders and explore international business potential.

I am pleased to say that three of the six Welsh finalists companies are Fast Growth 50 firms, namely Excelerate Technology (fastest growing firm in knowledge and creative industries 2011), TBDUK (Sustainable Growth winner 2009 and 2010) and Epitiro (Sustainable Growth winner 2010).

The overall winner will be announced at the end of the year and let's hope it's a Welsh company in 2011.

THREE THINGS ENTREPRENEURS DO FOR THE ECONOMY

2011-11-01T09:00:00.000Z

Another "sketchbook" video from the Kauffman Foundation, this time about the important role entrepreneurs play in innovation, job creation, and economic growth.

STEVE JOBS

2011-10-31T09:00:00.000Z

On October 5th 2011, one of greatest entrepreneurs that this World has ever seen passed away in his California home at the age of 56, leaving an enormous legacy of brilliance.

For those of us who study entrepreneurship, there are many who are put on pedestals as people who have changed the World around them.Josiah Wedgwood, Edwin Land, Henry Ford, Walt Disney, Richard Branson and Bill Gates are all individuals who made a difference to specific industry but is there anyone who, in such a comparatively short lifetime, did more than Steve Jobs to change the way we work, play and communicate with each other?

Let’s look at the evidence.

In the 1970s, he created the Apple II, the World’s first personal computer, with his best friend Steve Wosniak. He then went onto to develop the Macintosh, which began the home computer revolution and created the desktop publishing industry.

When he left Apple after a management dispute, he joined forces with John Lassiter at Pixar to create a whole new phenomenon of digital animation through films such as Toy Story, Monsters Inc. and Finding Nemo.

Then when he returned to Apple eleven years after his departure, he not only developed the new generation of computers, such as the iMac, but revolutionised the information and communications industry through a range of innovative products such as the iPhone, which turned mobile phone into music, photography, video, email and web devices; the iPod, which changed the way we listen to music; and the iPad, which created the first real platform for digital newspapers, magazines, books and videos.

He also established iTunes, which many have suggested rescued the music industry from what was then a spiral of decline. In promoting the development of applications for his devices, he created a whole new generation of content creating entrepreneurs.

Most importantly, Apple itself became a byword for a new type of business, a company that was a trailblazer for the those that followed Jobs in the 21st century such as Google, Twitter and Facebook.The life of Steve Jobs is an amazing story, which is why I was delighted to buy the new biography of Jobs by Walter Isaacson earlier this week.

It is an incredible story, more so for the fact that Steve Jobs co-operated fully with the author up to a few weeks before his death and yet was not interested in reading the final version. The result is not only a detailed picture of an incredibly complex individual but a history of entire industries that spawned up around him and his business over the last thirty five years.

Whilst it is enjoyable to read about the triumphant return of Steve Jobs to Apple in 1996, the sections I appreciated the most are the early history of Apple and the challenges he faced in getting the business off the ground.For example, how he struggled to get finance from banks to develop the first Apple computer, eventually relying on a loan from his father to buy the parts to get the business off the ground.

Of course, as with the apocryphal tales of those record company executives who turned down the Beatles, there are also examples of experienced executives who refused to support the new company. One of these was Nolan Bushnell, founder of the games company Atari who first employed Jobs as a young engineer. According to the book, Steve Jobs asked the Atari chief whether he would put in $50,000 for a third of the company. As Bushnell is quoted “I was so smart, I said no. It’s kind of fun to think about that, when I am not crying”.

There are also instances where Steve Jobs goes against the wisdom of what was then conventional business thinking. For example, the adage of ‘never compromise’ when it came to the product, a philosophy that would make and nearly break Apple during the early years as his quest for perfection nearly ruined the business.Or on being asked back in 1982 whether he thought Apple should do some market research to see what customers wanted and answering no because “customers don’t know what they want until we’ve shown them’, as the consumer hysteria over both the iPad and the iPhone has shown in recent years.

However, what the book emphasises time and time again is Jobs’ incredible ability to see beyond his own narrow sphere and the foresight, from the early days of Apple, in marrying the worlds of humanities and science to create products that were world class in both design and technology.

Steve Jobs’ life is a story that is worth reading and this book captures perfectly the life and soul of the unique individual. He could be a cruel and cold leader, often humiliating people publicly if he didn’t like their work, and admitting in his final interviews that he was harder on people in his company that he needed to be.Yet through sheer drive and willpower, he created a business where, as the book states, “imagination was nurtured, applied and executed in ways so creative that it became the most valuable company on the planet”.

In fact, the real lesson for entrepreneurs, according to Jobs, is that most are “unwilling to do the work it takes to build a real company, which is the hardest work in business. That’s how you make a contribution and add to the legacy of those who went before. You build a company that will still stand for something a generation or two from now.”

And how should Steve Jobs be remembered?

To me, it is Apple’s ‘Think Differently’ commercial in 1997, which had the strapline “that the people who are crazy enough to think they can change the World are the ones who do”.

That statement, more than any other, is a fitting epitaph for Steve Jobs - entrepreneur, genius and a man who changed our lives forever.

FAST GROWTH 50 AND THE FAST TRACK 100

2011-10-28T09:00:00.000+01:00

Last month, we published the thirteenth edition of the Wales Fast Growth 50 (FG50) supplement, which is the only list of the fastest growing firms in Wales.

There is also a UK-based list - the Virgin Fast Track 100 - that is one year older and is published in the Sunday Times. However, it rarely features Welsh-based companies, with the vast majority being found in the South East of England.

Funnily enough, having seen the Inc 500 list in the USA, I had thought of developing a national list for Ireland back in 1996 when I was working at the Michael Smurfit Graduate School of Business in Dublin but left before I got round to it.

After I had come back to Wales to take up a chair in entrepreneurship at the University of Glamorgan, Dr Hamish Stevenson had already established the Virgin Fast Track 100 as the UK equivalent in 1997. So, I decided to concentrate on developing a list to focus attention on the growing impact of entrepreneurial firms in Wales.

So is there a difference in the methodology used to identify growth companies in the Fast Growth 50 as compared to the Virgin Fast Track 100?

In both competitions, companies are:

identified either by research (through business information databases) or nomination (the latter is used because an increasing number of companies do not divulge their turnover in their annual accounts published in Companies House)
ranked by their compound annual growth rate (CAGR) and confirmed by their latest audited accounts
have year on year sales growthsales of at least £250,000 in the base year

However, the Virgin 100:

ranks companies over three years – FG50 decided to do it over two years in 1999 to identify those that were growing quickly over a shorter period of time
enables companies to have two base years – we stick to one base year
only lists companies with sales of at least £5m and ten or more employees in the latest year – in Wales, that would exclude a high number of growth firms with real potential
excludes companies with sales of over £500m – FG50 did restrict the list to SMEs only for a decade but has opened it up to larger firms because of the potential impact they could have on the economy
only lists companies that are profit-making in the latest year – we do collect this data but do not make it a condition

Of course, as with any lists with arbitrary definitions, there will be differences in the companies identified. Over the last few years, the tendency has been for the Wales Fast Growth 50 to identify more Welsh companies than the Fast Track 100, probably because of the localised research that we undertake with key stakeholders such as accountants, banks and law firms.

As mentioned earlier, the main similarity is that both lists are modelled on the Inc. 500 in the USA. More importantly, the focus is on giving attention to home-based entrepreneurs, something that the Fast Growth 50 and the Fast Track 100 have done successfully since the late 1990s.

The next Virgin Fast Track 100 is published on December 4th 2011 in the Sunday Times.

CONNECTED - THE FILM

2011-10-27T12:43:00.000+01:00

Earlier this year, I had honour of meeting Tiffany Schlain and her husband, Ken Goldberg, at their home in California.

Honoured by Newsweek as one of the “Women Shaping the 21st Century,” Tiffany is a filmmaker, artist, founder of The Webby Awards, co-founder of the International Academy of Digital Arts and Sciences and a Henry Crown Fellow of The Aspen Institute. Ken is Professor at Berkeley and, frankly, an incredible individual. Hopefully, we will be working with both soon.

In the meantime, have a look at a preview of Tiffany's new film on the connected world we all live

"Have you ever faked a restroom trip to check your email? Slept with your laptop? Or become so overwhelmed that you just unplugged from it all? In this funny, eye-opening, and inspiring film, director Tiffany Shlain takes audiences on an exhilarating rollercoaster ride to discover what it means to be connected in the 21st century. From founding The Webby Awards to being a passionate advocate for The National Day of Unplugging, Shlain’s love/hate relationship with technology serves as the springboard for a thrilling exploration of modern life…and our interconnected future. Equal parts documentary and memoir, the film unfolds during a year in which technology and science literally become a matter of life and death for the director. As Shlain’s father battles brain cancer and she confronts a high-risk pregnancy, her very understanding of connection is challenged. Using a brilliant mix of animation, archival footage, and home movies, Shlain reveals the surprising ties that link us not only to the people we love but also to the world at large. A personal film with universal relevance, Connected explores how, after centuries of declaring our independence, it may be time for us to declare our interdependence instead."

BREAKING THE TRAIN RECORD BETWEEN CARDIFF AND LONDON

2011-10-26T13:00:00.000+01:00

As you read this, I will be sitting on a non-stop train between Cardiff and Paddington which is attempting to break the record for the fastest time between our capital city and London.

The train left at 12.21pm and was expected to be in London before 2.00pm - a time of around 90 minutes as compared to the normal time of over two hours. Of course, it would not be stopping at Newport, Bristol, Swindon and Reading,

The reason for the journey is to demonstrate what a new electrified line could bring to Wales as the time to be taken will be roughly the same.

However, I would hope that it may also give First Great Western pause for thought regarding the development of a capital express train service running both ways (one in the morning and one in the evening) which would make the journey (and communications) far easier between the two cities, given that electrification is some years away.

FAST GROWTH 50 FIRM CREATES 30 JOBS

2011-10-26T08:30:00.000+01:00

One of this year's Fast Growth 50 firms, the Transport Broker Group, is set to create 30 new jobs at their brand new offices over the coming months, with positions available for customer service personnel, sales team members, and team leaders.

This comes a few weeks after the Transport Broker Group was named the 30th fastest growing Welsh business at the Fast Growth 50 business awards at a gala dinner in Cardiff’s Holland House Hotel.

Building on its impressive growth over the last few years, the company has purchased brand offices which is double the size of their previous premises and will allow the Transport Broker Group to further expand its workforce.

As a result, the Transport Broker Group is planning to double its number of employees over the course of the next 12 months, with staggered intakes of new workers over the course of the year. Fifteen new sales staff were signed up earlier this month, and another thirty vacancies have just been opened as the Transport Broker Group looks to add again to its growing workforce.

The Transport Broker Group is a conglomerate comprising of the UK’s leading limousine rental provider, Limo Broker, coach hire operator, Coach Broker, and the luxury transport brokerage, Cars for Stars. From the company’s Cardiff based call centre, the Transport Broker Group is able to coordinate transport hire services in all parts of the UK through their network of approved agents.

The Wales Fast Growth 50 is the definitive barometer of Welsh entrepreneurial firms and is published annually by the Western Mail.

NEW OPPORTUNITIES FROM AMERICA?

2011-10-25T08:00:00.004+01:00

Finally back in Wales after four excellent days of hard graft at MIT and Harvard.

At this stage, I can't divulge exactly what we discussed as the University will want to make a major announcement in the near future.

However, the trailer below of a new film "Rescue" gives a taster of the sort of work that a new and exciting multi-university global centre could be working on in the very near future.

Watch this space.

AER LINGUS AND THE GATEWAY TO AMERICA

2011-10-24T09:00:00.000+01:00

With the University of Wales concluding a significant research agreement with a number of US universities this week, I was invited over to Boston to discuss the next steps forward with partners from Harvard University and the Massachusetts Institute of Technology (MIT).

My previous visits to the USA have always been out of London Heathrow with Virgin Atlantic but this time, I decided to give Aer Lingus a go.

Why the Irish airline you may ask?

Well, the main reason is that, in conjunction with their regional partner Aer Arran, there is a service out of Cardiff that connects to the East Coast of the USA via Dublin.

There are a number of advantages to the flight, not least avoiding the three hour train journey to Heathrow followed by the two hour check in period.But it also means I can roll up at a relatively quiet Cardiff Airport around three quarters of an hour before departure, go quickly through security and start the journey relatively stress-free.

The Cardiff-Dublin flight took off at 1130am, landing 60 minutes later, giving me around an hour and a half before the connection to Boston.

Whilst I had looked forward to a smooth transition, there were a number of small problems. For example, there was was no-one at the transit desk at Terminal 1 to give me my ticket for the second leg of the journey as promised in Cardiff, so I decided to go over to the shining new Terminal 2 building at Dublin Airport and check in directly. Fortunately, my bags had already been checked through to Boston (or so I thought) so I could stroll through to my connecting flight.

Of course, one of the key advantages of flying through Dublin is that you go through US immigration in Ireland. And as anyone who has landed in any American airport will know, if you are unlucky, you could wait a further two hours to get through customs. In Dublin, it took around 15 minutes to do this, or would have done if my bags had turned up.

Apparently, US customs need to have a picture of your luggage before they can be put onto the plane as it is treated as US domestic flight. Unfortunately, the bags hadn't turned up so in the transit area so I had to wait, along with the other passengers travelling from Cardiff, in a holding area for about around half an hour.

About ten minutes before we were due to leave, a message came through that, thanks to a cock-up back in Wales, the luggage was still in Cardiff but would be sent through to us as soon as possible. That could have been the cue for a stream of complaints but the Aer Lingus staff were so apologetic that I felt guilty about asking when it would be arriving in Boston. And it has taught me to take carry on luggage the next time I go away for a four day visit.

However, on boarding the brand new Airbus 330-300, the staff couldn't do enough to help and the service was excellent and comfortable. More importantly, the cost was half of the normal price out of Heathrow.Landing seven hours later at Logan Airport in Boston, I walked straight out of the customs hall without going through immigration and I was in my hotel at 5pm local time. So the whole journey from my home in Cardiff to my hotel in Boston had taken 12 hours and I must admit was one of the more stress-free journeys I had taken to the USA, thanks to the relative efficiency of the connections and the excellent service on board.

Of course, it wasn't entirely trouble free given the loss of luggage but I have had that happen to me on numerous occasions previously on domestic flights. Also on booking the flight, Aer Lingus could have given better information on connections on arrival at Dublin but applying a bit of common sense solved any issues on that front. However, those are issues that can be easily managed in the future.

So does South Wales now have a proper link to the USA?

As readers of the business section of the Western Mail have no doubt noted, there has been some discussion on whether the Welsh Government should be subsidising a direct flight to America.Yet, as I discovered this week, there is a hidden jewel of a connecting route through Aer Lingus.

Certainly, if I were the managers at Cardiff airport, I would be promoting this option to businesspeople across South Wales and working with the airline to ensure a seamless service to the East Coast of America.

The Welsh Government, rather than paying millions of pounds to subsidise another airline to come to Cardiff, could also be promoting this route as a Gateway to Wales. In fact, why aren't the powers that be working with Aer Lingus to publicise this as the Celtic flight, linking both Dublin and Cardiff to major US cities including Boston, New York, Chicago and Orlando.

There can't be any harm in trying and I have certainly recommended this to our new academic partners in Massachusetts and Florida as the preferred route when visiting Wales in the future.

HOW DO WE MAKE ENTREPRENEURS MORE SUCCESSFUL?

2011-10-20T09:00:00.000+01:00

That's the subject of "Magic Sauce", the latest animated video from the Kauffman Foundation in the USA.

Kauffman CEO Carl Schramm points out that nearly 700,000 new businesses start every year, but the failure rate is high and many of them are not creating jobs. Schramm asks, "How do we make those firms more successful at the outset?"

Watch and enjoy.

FEMALE ENTREPRENEURSHIP - WHAT SHOULD WALES DO?

2011-10-19T08:40:00.002+01:00

Yesterday, a campaign was launched to increase the number of women entrepreneurs by 100k over the next ten years.

Everywoman, the largest female business community in the UK has linked up with the Federation of Small Businesses (FSB)'s Real Life Entrepreneurs Campaign to help encourage more women to set up new ventures in the UK, arguing that 150,000 start-ups would be created per year if women started businesses at the same rate as men.

This is not surprising, as according to the last Global Entrepreneurship Monitor report for the UK, female early-stage entrepreneurial activity in the UK in 2010 was 4 per cent of the adult population as compared to 9 per cent for men i.e. the ratio of female to male early-stage entrepreneurial activity was 44 per cent.

There were also considerable variations amongst the four home nations (see below).

As well as a focus on encouraging more women, the FSB's campaign will also promote enterprise amongst young people, the over-50s, those with disabilities, ex-armed forces personnel and those who are currently living on benefits.

This strategy by the FSB sounds excellent but for those of us who have been involved in entrepreneurship in Wales, it has a sense of real deja vu, given that there was a particular focus on encouraging more starts-ups amongst women, minority ethnic groups, social enterprise and young people within the Entrepreneurship Action Plan for Wales a decade ago.

In fact, I remember that thanks to the promotional campaigns managed by the Welsh Development Agency and the various start-ups programmes targeted at women, female entrepreneurship in Wales in 2004 was at three quarters that of the male entrepreneurial activity, one of the best gender balances in entrepreneurship in the whole World.

Since the demise of the Entrepreneurship Action Plan, the targeting of enterprise support towards women has also died a death.

The question is whether Wales, which is in dire need of more entrepreneurial activity, will continue with its non-specific generalist approach to start-ups or again adopt a focus on key groups such as women?

EDUCATION IN WALES - LEARNING FROM THE FINNISH WAY

2011-10-18T08:00:00.020+01:00

There is a great debate going on about the state of education in Wales not only at the university level, but also at primary and secondary levels as well.

As many have pointed out, there seems to be one particular country that Wales could learn from and that is Finland, the international trailblazer in the field of education.

As a regular visitor to Finland for the past 15 years, I have experienced, at first hand, the high quality of university student coming through the system. Yet, it is only recently that other nations have begun to sit up and take notice of what is going on.

One excellent point of reference for the so-called Finnish Way is the work of Pasi Sahlberg. His writing and lectures on this subject are worth having a look at, such as this presentation on what a Canadian province can learn from Finland in the field of education.

Essentially, Sahlberg argues that the rest of the World is trailing Finland in five key areas of education, namely:

Teaching core subjects vs Broad and creative learning
Standardisation vs Personalisation
Test-based accountability vs Professional responsibility
Market-based management vs Educational leadership
Data and control vs Collaboration and trust

As he said on his blog yesterday, "The Finnish education system has progressed steadily since the 1980s because we prepare teachers to improve their students’ learning as well as their own work in collaboration with their colleagues. We see teachers as knowledge workers, not technicians who implement instructions or standards mandated by someone else. The Finnish Way is unique also because it has been able to accomplish educational excellence and equity simultaneously".

The video below also demonstrates the state of education in Finland.

The question, of course, is whether the Welsh Government will even look at this proven model as a way forward in revolutionising the educational system in Wales over the next few years? Certainly, that is where Finland started, by learning from other countries. As Sahlberg himself points out "An important lesson from Finland is that its educational success is a result of deliberate and continuous learning from other education systems, their practitioners, policy-makers and researchers". Perhaps that is the most important lesson of all for Wales educationalists and policy-makers from the Finnish Way.

THE UNDERPERFORMANCE OF STRUCTURAL FUNDING?

2011-10-17T08:00:00.003+01:00

Last week, the BBC’s Dragon’s Eye programme revealed that despite billions of pounds of European funding, West Wales and the Valleys have become poorer during the last decade.

According to the programme, the latest official figures show that GDP per head in the region has fallen from 66.8 per cent of the EU average in 2000 to 64.4 per cent in 2008, the latest year for which figures are available.

The only other parts of Europe to see a drop in their relative prosperity over this period are Malta, two regions of Portugal and four regions of southern Italy.

Every other region that has received the highest level of European funding, including those in Greece, Latvia, Slovakia and Spain, have become wealthier over the same period.

This is a shameful indictment of the use of this vital funding package to turn around the Welsh economy during the last decade.

Defenders of the policies of successive Assembly Governments trot out the line that the first round of funding, known as Objective 1, was not focused enough and spread around too many projects. They then say that the current round of so-called Convergence funding, which will have fewer strategic projects, will make a bigger difference.

However, the facts from the Welsh European Funding Office (WEFO) that administers and manages the funding for the Welsh Government paints a very different story.

According to their latest data, the main Structural Funding programme – known as the European Regional Development Fund – has so far paid out £213 million in grants to various organisations.

And what are the outputs from this funding?

Well, as of May 2011, 4,849 gross new jobs had been created, which equates to a cost per job of £44,000. Believe it or not, this is higher than the amount received by LG during the ill-fated inward investment project.

Worst still, WEFO had estimated that, at this stage of the funding round, 7,348 jobs should have been created, so less than two thirds of the new jobs expected have come to fruition.

And if we look at what has happened geographically, we see that the European fund has had little impact on some of the poorest areas in Wales during the last five years.

For example, in Anglesey, only 246 new jobs have been created as a result of European funding, with 255 jobs created in Blaenau Gwent and 178 in Merthyr Tydfil.

With unemployment in Wales recently rising by 16,000, surely there should be a greater impetus within the programme on job creation.

However, it is not only in terms of new jobs that the programme is behind its targets.

During a month when the Assembly Government has appointed six new entrepreneurship champions, the number of new businesses being created through European funding is also well behind target. Instead of 3,019 firms being set up by May 2011, only 1,105 had been established i.e. only 36 per cent of the expected target.

The other major programme for learning and training – the European Social Fund – has also underperformed in key areas. For example, there are 44,000 fewer participants on European funded training programmes than expected. Of those who are have benefitted from taking part in education and training opportunities, only 32% of those estimated to enter employment are doing so.

Worst of all, there are 12,500 fewer young people being trained through the European Social Fund, which should not be surprising given that WEFO has only paid out £14.2 million to project sponsors against a commitment of £95 million. This is at a time when we have record unemployment amongst young people in Wales.

If WEFO was a business and such targets were being reported to the board of directors, there would be alarm bells ringing throughout the organisation and heads would roll.

Yet if you read the monitoring reports produced for various committees by officials, there seems to be no urgency to address this worrying set of results. In fact, the impression is that those in charge of the funding are more focused on spending the money so as to avoid clawback rather than on generating outputs that can positively benefit the Welsh economy.

This is simply not good enough. It is shameful enough that Wales will have to apply for a third round of funding. However, the woeful underperformance of the current funding programme is, frankly, unacceptable when businesses need vital support to grow and create jobs.

So what is to be done?

The new Minister for Business has made her mark with the business community during the last three months and, given her straight-talking no-nonsense style that is focused on delivery, I would expect that she would be appalled at such complacency.

Certainly, if this continues and no action is taken, I would expect the opposition parties to call for a full investigation by the National Audit Office into the performance of WEFO and the failure to hit key programme targets.

At a time when we have this additional money available to make a difference to the economy, it simply isn’t good enough to perform so dismally in terms of job creation, enterprise development and training for young people.

Wales, and the Welsh economy, deserves better.

Western Mail column 15th October 2011.

ENTREPRENEURSHIP IN DEPRIVED URBAN COMMUNITIES - THE CASE OF WALES

2011-10-13T09:00:00.001+01:00

I am really pleased that a new article, "Entrepreneurship in Deprived Urban communities - the case of Wales "- has been accepted for publication in the Entrepreneurship Research Journal (ERJ) from the Berkeley Electronic Press.

ERJ is an an international journal committed to publishing the very best scholarly research. It encourages a scholarly exchange between experts from all fields which demonstrate the vital role that entrepreneurship plays in determining the quality of lives, societies, and economies. The scope of the journal is unique in that it seeks to disseminate both theoretical and empirical evidence research that will facilitate the development of entrepreneurship as a field of study today, and in the future. A scholarly forum for new ideas that have the impact on broadening the traditional business model, the journal recognizes experts and their contributions from all fields including economics, business, psychology, sociology, anthropology, political science, engineering, physical and life sciences.

The paper was co-written with Piers Thompson of UWIC and Caleb Kwong of Essex University.

As it is always difficult to get a paper into an American-based journal. I am doubly pleased at this positive news because ERJ is a new publication that aims to be the leader in its field over the next few years - one of the editors is Chandra Mishra, who transformed the Journal of Small Business Management between 2001 and 2010, and both Howard Aldrich and William Baumol are on the advisory board.

More importantly, the study examines Wales as its case study to determine the potential of entrepreneurial activity for rejuvenating deprived communities.

Utilising data from the Global Entrepreneurship Monitor (GEM) in conjunction with the Welsh Index of Multiple Deprivation (WIMD), the paper examines the relationship between early stage entrepreneurial activity, entrepreneurial attitudes and attributes, with the different domains of deprivation.

Whilst it found some evidence that those living in the most deprived communities were less likely to be involved in early stage entrepreneurship, most of this could be accounted for by the individual characteristics of those living in these areas.

Interestingly, the lack of existing businesses or public services appears to play little role in dissuading prospective entrepreneurs and it would appear from this that there is no need to establish a critical mass of businesses to encourage new business starts within the deprived areas of Wales, as the attraction of low competition appears to play a role in encouraging new business.

Controlling for the endogeneity of the choice of location does not alter the results relating to early stage entrepreneurship, but after separating the ‘choice’ of living in a deprived area and the presence of entrepreneurial attributes, it is found that entrepreneurial social capital and the perceived presence of start-up skills are negatively associated with a number of domains of deprivation as might be expected. The results relating to the perception of good opportunities is mixed with some positive and some negative influences, although this potentially relates to the fact that whilst demand will be suppressed as in a prosperity pull style effect, the absence of competition also provides opportunities.

The paper finds that areas do have an effect, but so do individual characteristics, and since it is these selfsame characteristics that result in many choosing to live in the deprived areas, as well as creating the low social capital, bridging ties, and adverse peer effects, the three components are intrinsically interwoven.

This means that policies to help under-represented groups within these communities may be more appropriate than general business advice and support to overcome help firms grow in weaker economic conditions, but pinning hopes on this alone rejuvenating the area is perhaps asking too much given the role that in and out migration play. Bearing in mind that migration may result in little long term benefit for a deprived area, this does not mean individuals may not benefit.

Therefore, the question is whether enterprise is the most cost effective method of helping this minority of beneficiaries, especially if aspiring entrepreneurs are held back by their environment? A lack of role models, due to a large extent by a lack of tradition of entrepreneurship, is a considerable problem. One method of overcoming this would be through the provision of forums for interaction between entrepreneurs and the public.

The negative area effect on the perception of opportunities would also be tackled by instigating such fora with individuals being made aware of the possibilities open to them rather than being dissuaded by the lack of economic activity present in the area. Training programmes to provide general enterprise skills would be beneficial to not only help develop entrepreneurs but ensure that a greater number of the population are provided with the broad range of entrepreneurial skills suitable for working in small firms.

It is unclear from this study the extent to which specific finance provision is required for deprived areas, as those with lower household incomes have a lower propensity to start businesses although no further significant influence is found for income deprivation. This would imply that policies to help those out of work or on low incomes to start businesses will be adequate although raising entrepreneurship artificially in this manner could impact on the quality of entrepreneurial activity in an area.

The paper will be published in 2012.

LEARNING FROM IRELAND - THE GLOBAL IRISH ECONOMIC FORUM

2011-10-12T09:00:00.001+01:00

Whilst it seems, after Saturday's enthralling quarter final in the rugby World Cup, there is very little that Ireland can teach Wales in terms of modern rugby, the same is certainly not true in terms of how to get everyone working together to revitalise an economy.

On Saturday, I wrote about the sterling work of the Irish Technology Leaders Group (ITLG) and mentioned the upcoming Global Irish Economic Summit that was to take place over the weekend in Dublin Castle.

Following this prestigious event, at which former US President Bill Clinton and a host of others spoke, there are a number of recommendations that have already been announced in the last couple of days. These include:

Private sector expertise - ITLG has offered to put together a group of Irish technology leaders to sit on the boards of semi-state companies without charge to help the country weather the current economic storm. They would initially offer to work for free to help run various state bodies until 2016. Once a list of 100 leaders has been completed, it will be made public and handed to the Government, which will be asked to match the executives to positions on the state bodies
International placements - 1,000 Irish business graduates are being offered placements with companies, business colleges and language schools in Asia - a number of global companies have now offered funding to sponsor this programme
The Gathering - a global Irish “homecoming” which has been billed as the biggest tourism initiative ever staged in Ireland, will be a year-long event in 2013 which aims to attract as many as 325,000 extra visitors into Ireland. This would add €220 million to the Irish economy.

In addition, President Clinton has agreed to play a key role in the fight-back by Irish business and host a New York Irish summit next year to kick start Ireland’s economic recovery with the aid of American investment.

So, there is a lot of activity going on across the Irish Sea and, more importantly, there is a sense of optimism and hope that the Irish economy can be turned around if everyone works together.

Surely, there is no reason as to why business and government in Wales could not do the same to take advantage of the experience and expertise of the "Cymru ar Wasgar" - the Welsh diaspora.

If there are any doubts about how this can make a difference, then Welsh politicians and policymakers should listen to some of the views of Denis O' Brien, one of Ireland's most successful businesspeople, on how he believes a small economy can be developed in these difficult times.

THE IRISH DIASPORA - LESSONS FOR WALES

2011-10-11T08:00:00.000+01:00

Last week, I was delighted to be invited to Dublin for the fourth Annual “Silicon Valley Comes to Ireland” conference, organised by the Irish Technology Leaders Group’s (ITLG).

This is a regular event in which senior executives from the world’s innovation hotspot come over to Ireland to engage with more than fifty Irish technology companies in a series of private investor workshops.

Earlier this summer, the University of Wales Global Academy opened an office in ITLG’s Irish Innovation Centre in San Jose, the capital city of Silicon Valley, to give Welsh firms access to the region’s investors and universities.

So this was a real opportunity to catch up with John Hartnett, the President of ITLG, and see the effect that his team is having on delivering a more innovative economy. As John suggested during the event, their aim is to help Ireland focus on enlarging its indigenous high-tech sector to drive economic recovery as there is significant opportunity for growth created by these firms.

And despite the previous gloom surrounding its economy, John believes that there has been a real sea change during the last few years in which there is a greater “go for it” attitude amongst new entrepreneurs in Ireland.

I certainly can understand what he was talking about, having attended a ‘Dragon’s Den’ style University Challenge organized by ITLG and sponsored by Cisco, in which three companies spinning out from the Irish higher education centre competed on stage at Dublin City University for a €100,000 prize.

To be honest, the three presentations, from Pilot Photonics (Dublin City University), ALR (University of Limerick) and InfiniLED (University College Cork), were far above the standard normally seen on the BBC programme and the usual panelists would have been falling over themselves to invest in these companies.

InfiniLED, the eventual winner, has developed a next generation Light Emitting Diode (LED) technology which produces light more efficiently than conventional LEDs and has the potential to make massive inroads into a market worth billions of over the next few years.

In the picture, from left, are John Harnett, president of ITLG; Joe O’Keeffe, InfiniLED and Richard Stokes of DCU.

As I wrote earlier this year, the link between Silicon Valley and Ireland is beginning to pay real dividends by bringing together experienced investors to Ireland to engage directly with emerging Irish technology companies and further ten young high technology firms will be showcased in Stanford University in 2012. I can only hope that, through our office at the Irish Innovation Centre, we can also start introducing Welsh companies to the opportunities available.

Of course, the real advantage that Ireland has is the fact that all the senior executives in Silicon Valley visiting this week have Irish roots and want to come back to help their economy in its hour of the need. The ITLG itself has over 3,000 members with chapters in Wall Street, Silicon Valley and Hollywood to bring together the three critical worlds of money, entertainment and innovation.

The support that the diaspora can provide has clearly hit home with Irish politicians and policymakers who have organized a Global Irish Economic Forum, which is being held at Dublin Castle this weekend.

With 270 delegates from 40 countries attending, including former US President Bill Clinton, the event will see the world of business and government discuss practical initiatives that can help the economic recovery in Ireland, including ways of generating foreign direct investment, promoting culture as well as increasing export and tourism figures.

Some of the planned debate topics include "Ireland's image abroad: communicating the message" and "Making Ireland more competitive in new and emerging markets".

But this is not only a talking shop - the fifteen working groups at the forum have been asked to come up with two or three ideas which Irish embassies around the world will then be charged with implementing. In fact, the idea of the Irish Innovation Centre came from the first summit held back in 2009, an idea that has been put into practice with outstanding results.

Certainly, there is no reason why Wales could not do the same to bring together the outstanding talent that is out there all over the world. The Irish are happy to help and, more importantly, are enthusiastic about our chances of success.

As John Hartnett and I concluded over a pint of Guinness late on Wednesday night, imagine being in a room where you had Michael Moritz, Terry Matthews and Howard Stringer discussing how to get the Welsh economy back on track.

That would be very special and could be the very spark needed to create a new innovative Wales and the entrepreneurial and competitive economy we all hope we can achieve in the future.

Western Mail column, 8th October 2011

WILL EUROPEAN REGULATIONS SCUPPER WELSH HIGHER EDUCATION POLICY?

2011-10-10T07:46:00.001+01:00

Yesterday evening, I received a phonecall from a good friend asking me if I had read the Sunday Times that day.

I hadn't and so he directed me to a story which, if true, could have serious implications for one of the Welsh Government's flagship policies.

Unfortunately, due to the Sunday Times' web policy, I cannot provide the necessary link to the story (which may be why no-one seems to have picked up the article in the Welsh press).

Essentially, the story suggests that the Welsh Government will have to pay the difference in fees for thousands of EU students wishing to study at English.

According to the Sunday Times, "The loophole allows Europeans to exploit a decision by the Welsh government to pay any fees above £3,465 for students from Wales who attend courses in England from next year".

It would seem that under EU laws, Wales is not permitted to offer a better deal to its own students than it offers to those of any EU state outside Britain.

This potential problem had been picked up by the Scottish Government which, like Wales, had considered paying fees for its students to study at universities in England. However, as a source quoted in the newspaper noted:

“Our legal advice was that if we were to start paying for students from Scotland to study in England that would be considered a breach of EU law unless we paid for other EU students as well.”

The suggestion therefore is that tens of thousands of EU students could demand that the Welsh Government pays the difference in fees (around £5.5k per annum) for them to study at all English Universities. For example, this would give some EU students a £16k scholarship to study at institutions such as Oxford, Cambridge and Imperial, three of the top ten universities in the World.

It sounds an incredible turn of events and I cannot believe this could happen. Of course, one can only assume that the legal implications of the policy must have been throughly considered by Welsh Government officials and the Higher Education Funding Council for Wales over the last 12 months since its announcement. It is also worth finding out the view in Scotland and I will ask a few friends with links to the Scottish Government to try and discover more later today.

Nevertheless, the story does seem credible and with changes to fees being implemented in less than a year's time, clarification is needed quickly from the Welsh Government over this issue as Welsh students will already be considering where they will be studying, with a significant number already having chosen universities in England.

REBOOTING THE BLOG

2011-10-09T17:06:00.002+01:00

The last six months have been exceptionally busy on the day job, which is why I haven't been blogging as often as I should have.

More relevantly, I never had any time in the evenings to look after the management of the blog itself, which is why I decided to stop accepting comments altogether in April as moderating them took so much time (and I just never got round to changing the settings back on blogger).

With Welsh political coverage on the BBC being reduced, could the death and influence of the blog have been exaggerated? Fortunately, I am pleased to note that the Welsh blogosphere remains a healthy place for political, economic and social commentary on vital matters of the day.

There is the Uber-blog known as WalesHome but also blogging veterans from across the political sphere such as Glyn Davies, Valleys Mam, Borthlas, Peter Black and Blog Menai, all of which make a real contribution to debate and discourse. There are also newer ones who are as good as anything you find across the border, such as Syniadau, A Change of Personnel, Jac o' the North and the Druid of Anglesey.

God damn it, I even miss Welsh Ramblings!

So, I have decided to make one last effort at keeping this blog up and running. The look has changed slightly but the comments are now open.

The views are all mine, as usual, and if you don't like them....

GLYNDWR - AN INNOVATIVE UNIVERSITY?

2011-10-04T08:00:00.000+01:00

Earlier this year, the Higher Education Funding Council for Wales (HEFCW) put forward the suggestion that Glyndwr University should work under an umbrella of higher education institutions led by Aberystwyth and Bangor Universities.

Recently, a group of MPs, led by the local Wrexham MP Ian Lucas, had objected to this proposal, suggesting that HEFCW had “displayed a woeful ignorance of the needs of north-east Wales and the importance of a university led from within our region”.

They were supported last week by Flintshire County Council, which noted that the move could be potentially damaging for the region as the university has built strong links with the business community.

I am not surprised that there is growing sympathy for Glyndwr University’s current dilemma.

With Wrexham and Flintshire being very much one of powerhouse regions of the Welsh economy, one would have thought that the Welsh Government would have seen the development of Glyndwr University as a key part of the strategy for turning Wales into a “small clever country”.

Yet, some within higher education are finally realising that Glyndwr has actually had very little visible support from policymakers, especially compared to other universities.For example, whilst there are now an additional 1800 full time undergraduates at Bangor University as compared to a decade ago. Glyndwr has only been given an additional 690 in a market that is strongly controlled by the funding council.

Whilst money was recently granted for £5m centre for the creative industries at Glyndŵr University, questions are still being asked why HEFCW would then give Bangor £15 million for what seems to be an identical, and competitive, project?

And despite this alleged favouritism over the last decade, Glyndwr has, to its credit, simply got on with the business of developing its potential as a very different type of academic institution that the region’s economy needs.

Given recent evidence from one of the great management thinkers, its current approach could well turn out to be the one that the rest of academia may well follow in the future.

In his latest book, the Harvard guru Clayton Christensen (along with Henry Eyring) suggests that traditional universities are facing a major crisis.In the race to constantly make themselves bigger and better, they have steadily driven up costs and, as a result, are now overstretched, overcommitted and no longer responsive to the needs of learners.

In contrast, the innovative university that will form the new model for higher education will not focus on getting bigger, but on what they do best to educate the students they wish to serve, a sentiment that is at the core of Glyndwr University’s vision for the future.

Yet the ‘big is best’ approach through consolidation and economies of scale is the only one currently under review by the Welsh Government, even though a variety of different institutional strategies may be more relevant.

For example, Bangor and Aberystwyth Universities are two traditional institutions that are almost identical in their approach to higher education and a merger between these two bodies may well make sense in the long term. However, to bring in Glyndwr, which is different in so many ways, into such a group because of geographic expediency simply defies common logic.

Certainly, the great and good of the North East of Wales need to persuade the Welsh Government to support an entrepreneurial university which is based in one of the our nation’s industrial heartlands.

Frankly, it has nothing to lose in doing so and everything to gain.

And instead of treating the institution as an afterthought as compared to Bangor and Aberystwyth, those in charge of education policy should consider how this innovative university can make a real impact on its local economy and provide the resources necessary for it to grow and prosper.

GETTING THE ECONOMY GOING? A NEW INTERNATIONAL AIRPORT FOR SOUTH WALES?

2011-10-03T08:00:00.000+01:00

WESTERN MAIL COLUMN 1ST OCTOBER 2011

Earlier this month, I was invited to a conference exploring the importance of Cardiff to the Welsh economy. Entitled ‘Serving Wales – Building a Capital and Prosperous Wales’ and organised by the Cardiff Business Partnership, the event included contributions from the First Minister and David Stevens, chief executive officer of Admiral PLC.

It was a timely conference, coming a week and a half before the announcement of the Welsh Government’s strategy for the next five years, a strategy dubbed as a roadmap for the Welsh economy by Carwyn Jones but as "meaningless" and too vague by Opposition leaders.

Certainly, there is little, beyond the Welsh Jobs Fund that employers can point to as being of any direct impact from the five year plan, and that will only create 4,000 six month long placements for young people rather than any meaningful long term employment.

Perhaps the main problem with the Government’s plan is that it lacks a clear vision for what can be done with the Welsh economy.

This was a point made by the CBI’s Rudi Plaut at the Cardiff conference, when he suggested that whilst various initiatives were worthy in themselves, they would not turn around the Welsh economy overnight. Instead, what was needed was some major infrastructure projects that would have a real impact and create tens of thousands of jobs.

With plans moving ahead quickly for a second nuclear power plant for Anglesey, it would seem that North Wales has its big hitting project.

But what about South Wales?

The Severn Barrage seems, for now, to have been put on hold for the foreseeable future but is there another major project which could make a real difference?

Exactly five years, I described the potential development of a new major international airport to the east of Newport that would serve the whole of the Wales and West England region.

Certainly, the evidence at the time was compelling – a previous white paper on the future of air transport had stated that by the year 2020, the number of passengers per annum in the UK would rise from 180 million to 501 million, despite the increasing worries about climate change.

Not surprisingly, any plans to cope with this increased traffic has focused solely on what can be done around the London complex of airports. Witness the plans to build a new runway at Heathrow and Boris Johnson’s call, earlier this year, a new international hub airport to be built in the South East of England.

Yet, apart from the fact that such an infrastructure project is not needed to boost employment within one of the more prosperous parts of the UK, there are concerns that increased concentration around London will increase air misses and have a considerable impact on the environment.

Yet as I noted back in 2006, a proposed Wales and West International Airport (WWIA) could cater for a catchment area of up to 30 million passengers per annum. Indeed, there would be little reason for individuals who live or have business in the Wales and West England region, and who require intercontinental facilities, to use one of the London airports and, in doing so, travel an average surface travel distance of 130 miles.

With the WWIA, this would be reduced to an average of 40 miles, thus creating an attractive option for many passengers. More importantly, with the M4 and the newly electrified Swansea-London railway line adjacent to the proposed airport, links into the UK road and rail network would be quick and easy.

The benefits for the South Wales economy could be enormous, especially for the Gwent Valleys region which is the second poorest area in the UK - it is estimated that a new airport could create up to 45,000 direct job opportunities and generate at least £1.25 billion for the local economy.

It would also, as far as an airport can do, minimise the environmental impact of the growing air traffic over the next decade. For example, transferring Trans-Atlantic flights from London to the WWIA would save an estimated 6 million tonnes of air fuel every year.

In terms of construction, the landside operation of the WWIA could be built on brownfield land and no part of the sites of special scientific interest in the Severn estuary would be affected by the development. The airside operation would consist of an offshore runway in the Severn estuary and therefore no person would live under the flightpath or within the noise impact footprint.

Therefore, the proposal to develop a new modern green airport equivalent to that of Manchester or Gatwick for Wales seems very compelling, especially as it would bring all the economic benefits that the Mayor of London is so keen to retain for his city.

Five years ago, I urged the Welsh Government to have the courage and the vision to put together a feasibility study and present it to the UK Government for consideration.

Now that we have gone through the worst recession in living memory, I would urge the First Minister to revisit this idea and address any unanswered questions about this development.

At the very least, it could assess the potential impact of a major infrastructure project that could become a magnet for international travellers, directly cut unemployment in Wales by over a third and finally get the economy moving.