Learning lessons from Welsh flagship policy

The Triple Helix model, where government, academia and industry work together to create a vibrant innovation economy, is one of the new holy grails for policymakers around the world. And over the last three years, a team of researchers at the University of Wales has been examining this process within the Welsh economy and recently completed a series of case studies on this process.

One of the more fascinating examples we examined was that of the Technium programme. This was established at the beginning of the last decade to provide office space and support for high technology firms to commercialise university research and turn this into thousands of highly paid jobs within technology-based firms in Wales.

Unfortunately, such ambitious plans did not materialise and whilst ten Techniums were built across Wales at a massive cost to the public purse, they ended up largely unoccupied and expensive to maintain. Indeed, an evaluation of the Technium programmes carried out by the consultancy firm DTZ revealed that each job generated by the project cost an average of £190,000 of public money and occupancy rates at the Pembrokeshire Technium were as low as four per cent.

Given this, and after much consideration, the Welsh Government finally pulled the plug on the initiative in 2010 and closed six down. So what went wrong?

Whilst there have been various critiques of the Technium concept from academics and business people, perhaps the most detailed comes from the evaluation by DTZ which noted a number of key flaws to the whole concept.

The first was the lack of any clear rationale for the roll-out of the programme beyond the first incubator in Swansea. One has to wonder why the Welsh Development Agency had then gone ahead with building Techniums across Wales before a ‘working prototype’ had been fully tested?

Secondly, there were no explicit objectives for the Technium programme and it would seem that the only rationale was to build as many of these as possible before the European funding ran out. Certainly, there seemed to be little consideration of whether there was demand, either from the local business community or from the universities, for this type of building. This particular critique, from the Western Mail in 2005, seems to hit the nail firmly on the head as to the serious problems in the programme event then.

Thirdly, it would seem that the monitoring and evaluation of the programme by Technium managers was practically non-existent which, given that many of those involved had very little experience of managing such projects, is not surprising.

But it would also seem that this failure on the ground was not noticed by those higher up within the system. As the former Economic Development Minister Andrew Davies pointed out, civil servants at the time did not keep Ministers informed on the performance of the programme or on major decisions being taken which led to serious issues over its management.

Finally, occupancy rates were low and the provision of business support and its take up was minimal which would be expected if, as critics have pointed out, Techniums were actually not in any way innovative in their concept or, more importantly, in their execution.

Whilst space within each property was targeted towards innovative businesses, there was no real support provided on site to any of the firms located there, which is a critical element of what we see within successful incubator programmes around the world where financial and management advice is as important, if not more important, than the physical space in which the companies are based.

In fact, the recent success of cheap entrepreneurial spaces such as Indycube across Wales shows that spending a fortune on buildings is not the way to develop more entrepreneurial businesses, especially when it was clear that there was actually little connection between the Techniums and the wider innovation system in Wales.

So was it a waste of money? Cardiff University’s Professor Kevin Morgan thinks so. As one of the more strident critics of the whole Technium programme, he believes that the question remains as to why there has been no public inquest into the “failure of an experiment that cost around £111 million”. And he has a good point, given some of the exaggerated claims made by some over the alleged success of Techniums that are now seen to be, at best, misleading.

I suppose if we had seen a Google or a Nokia emerging from one of the Techniums during the last ten years, the failure of the rest of the programme would have been forgotten. But that was highly unlikely to happen when there was preference in spending nearly a hundred million pounds of taxpayers’ money on shiny new buildings rather than focusing on attracting the best scientists to Wales whilst, at the same time, encouraging a greater entrepreneurial spirit amongst students and graduates as they do in the great universities of Stanford, Cambridge and MIT.

Ten years ago, in a speech at a science and technology conference at the Celtic Manor, I questioned whether Wales “had enough science to commercialise within its public and private sectors that will fill all those Techniums with high technology businesses that will take make Wales a smarter wealthier nation?”

In fact, I said then that it was pointless concentrating public funding on commercialisation activities whilst the R and D base in academic institutions and private sector organisations was declining or at best, standing still. In the end, you cannot commercialise technology if there is little relevant technology to commercialise.

That is what those who put the Technium concept together at the time forgot but what is thankfully now slowly being rectified through programmes such as Ser Cymru that aims to attract the best brains in the World to Wales.

The shame is that it took a decade and nearly a hundred million pounds to learn that lesson but it is one that I hope the Welsh Government will take to heart from the failed experiment of the Techniums as it looks to implement its new innovation strategy over the next few years.