THE IMPORTANT IMPACT OF STARTUPS ON THE WELSH ECONOMY
Earlier this week, in association with Wales Week London, we launched the sixth Wales Start-Up Awards which celebrates the success of the best new Welsh businesses every year. It was a pleasure to interview a number of the award winners that are making a real stamp on their industries and markets.
These included Project Blu, overall winner in 2020 which has signed a major multi-million pound deal to sell their environmentally friendly dog products in the USA; Yoello, the Cardiff-based payments specialist which had to pivot during the pandemic but has completed a major funding round to expand their operations substantially; the Goodwash Company, whose innovative approach to their business is putting them on the path to becoming a major UK brand in the next couple of years; and the Enbarr Foundation which is rewriting the textbook on community entrepreneurship through its efforts in Deeside.
Despite all the challenges of the last 12 months, these amazing founders had not only survived the economic downturn but had thrived during the deepest recession in recent history. Their creativity, perseverance and sheer hard work is a testament to all of those individuals who have identified an opportunity, taken the risk and started their own business at the most difficult time ever.
Indeed, data from Companies House shows that over 19,000 new Welsh firms were created in 2020 as an increasing number of individuals decided to set up their own businesses.
Yet, there still seems to be a reluctance by politicians and policymakers in Wales to embrace entrepreneurship as the key driving force behind economic growth and prosperity. This is despite the fact that we all know that it will be new and smaller firms that will be creating the majority of jobs as we come out of recession, not large businesses.
And whilst the Chancellor’s budget was generally welcomed by industry last week, it was noteworthy for the absence of anything specific to support more entrepreneurs, especially in those regions that need levelling up.
Of course, we have been here before and over twenty two years ago, I wrote a paper which called for a co-ordinated regional approach to end confusion regarding the development of support for Welsh entrepreneurs and small businesses.
This eventually led to a recognition that existing initiatives to support new businesses and related action to promote entrepreneurship needed to be brought together under a clear, integrated programme of activity.
As a result, the Entrepreneurship Action Plan (EAP) was launched in 1999 as the first regional enterprise strategy of its kind in the World and whilst it was co-ordinated by the Welsh Development Agency (WDA), it fully involved businesses, universities and local authorities in its design and implementation.
As a result of its activities, Wales bucked the declining UK trend at the time in the creation of new firms and the number of new businesses increased by 28 per cent in the first two years of the plan.
Unfortunately, the EAP was closed down when the Welsh Government decided to abolish the WDA and as a result, the number of new businesses being created in Wales plummeted over the next four years.
Since then, there has been a stop-start approach to supporting entrepreneurship and whilst the Welsh Government created BeTheSpark four years ago as a strategy to drive forward greater awareness of entrepreneurship, there has been almost no activity during the last 12 months and a time when it was needed the most.
Indeed, the fact that the chief executive of the Development Bank of Wales admitted in an interview last week that his organisation had provided financial help to only 83 new firms since April of last year suggests that, despite warm words, entrepreneurship may not be a priority for those who are tasked with supporting businesses in Wales.
That is enormously disappointing as I believe we are now experiencing the beginning of a renaissance of entrepreneurship across Wales that is driven by a generation of amazing individuals.
As the Wales Start-Up awards demonstrated last year, they are launching new firms that are not only having an economic impact through creating jobs and wealth but are at the vanguard of a social and environmental revolution that is changing the face of business.
As we slowly start to emerge from the economic doldrums caused by Covid-19, there is an opportunity to build a new Wales that is driven by home-grown, innovative and entrepreneurial businesses that have social and environmental ideals at the heart of everything they do.
Given this, I would urge the UK Government in Wales, the Welsh Government and the four city and growth deals to do everything possible to not only support those amazing entrepreneurs but to help them turbocharge their businesses over the next few years. In doing so, they can create another entrepreneurial renaissance that will transform our economy for the better.