Re-igniting the Welsh economy requires radical measures to support our manufacturing industries says Tegid Roberts
Since the Scottish independence referendum in Sept this year and the rather lacklustre Smith Commission that came after it, the question of “what next?” for the Welsh devolution settlement has been something of a never-ending discussion in both civic and political life in Wales. Despite there being a largely cross-party and civic consensus reflected in the Holtham, Silk 1 and Silk 2 commissions, only Silk 1 has so far been brought closer to reality (with some delay) via the current Wales Bill.
However, there is little real radical discussion about the “Elephant in the Room” of Welsh politics: our underperforming economy. Currently the tax gap between what is raised in tax in Wales, and what is spent on services, is well over £10 Billion. So clearly, we have much to do here to build the economy back to levels last seen in the 1960s. This £10 Billion gap includes, of course, expenditure shared across the whole of the UK, including London Crossrail, the armed forces and the banking bailout costs [ No bank headquartered in Wales I might add ].
Obviously, increasing the economy here in Wales will also mean that less public spending will be required as more people are in work, and jobs are better paid. However, in order for us to bridge the current gap, our economy needs to grow by some £25 Billion, or about 50% – no mean feat. The news isn’t all bad though, as our exports since 1999 have doubled, and are currently running higher than the UK average: we export some £15 Billion per annum. So given this head start on what is a strong indicator of economic health – what more can be done to grow the Welsh economy further?
In my opinion, the main area for growth in the Welsh economy is manufacture, as this has long been a key driver of our exports, and already makes up a substantial proportion of our economy [ 19% down from 26% in the 1990s but still higher than the UK average of 10%]. Key cornerstone large companies here include: Ford, Toyota, EADS/Airbus, General Dynamics, Corning, Sony, Panasonic, Tata, IQE, GE, Qioptiq et al. All are well-established, employing highly skilled people, and support a diverse and deep local supply chain. Highly skilled manufacture also creates opportunities for service and repair markets, and so can contribute even more highly skilled employment to the economy.
In addition to large multinationals, we also have plenty of SMEs here. Unfortunately, as they grow, many of these businesses are often bought by companies outside of Wales, and are therefore at risk of removal outside of the country.
What can we do to support and grow Welsh manufacturing businesses, large, medium and small?
Supporting large cornerstone companies in Wales
The key focus is for us to collectively up our game, with financial support from the Government, and technical support from local consultancies, universities and colleges.
With support from the Welsh government and local businesses, large companies that service capital equipment in Wales, could be encouraged to look to also manufacture here. Companies currently manufacturing in Wales could similarly be encouraged to set up Research and Development facilities here. Research and development companies could be supported in manufacturing their products here, rather than considering off-shoring. Finally, large international firms that currently manufacture here could be encouraged, and assisted, to source as much of their supply chain here as possible. Multinational companies already embedded in Wales should be encouraged to expand, by opening more divisions in different industries.
Support for small- and medium-sized businesses
The main focus should be on retaining and growing successful Welsh businesses. SMEs here, whose owners want to sell an established and profitable business, should have the option to be bought, via a management buyout with help from a Welsh development bank. This would allow a business to continue in Wales. A development bank in Wales could buy and consolidate businesses in similar markets to create larger Wales based entities – for example value added food producers may consolidate well, and share distribution channels, technology and more clout with the supermarkets.
Creating a Welsh Development Merchant Bank
Our development bank could be owned collectively by the local authorities in Wales, as these authorities have the ability to borrow money in excess of the Welsh Government. It should be managed professionally, and in the manner of a traditional Merchant Bank, of which we used to have several in Wales, a century or two ago. Let’s call it the Cambrian Bank.
In Lower Saxony in Germany, the state government towns 20% of the Volkswagen Group, and has seen its stake grow and produce dividends for decades.
What if Cardiff Council had owned a non-controlling stake in Admiral, right at its creation? What would that be worth to the local economy today? A state government stake could also provide stability to the business in question, as a long-term hands-off shareholder. In Singapore, the national pension fund supports and funds SMEs as well as very large corporation, in a largely hands-off manner. Both Singaporean state and the private sector have flourished.
Infrastructure support for Welsh business
We need far better links between north and south Wales. It’s stifling our ability to work together – we need to consider tunnelling as the Swiss do, and to build lasting infrastructure that copes with our mountainous landscape. Train links within Wales should be the priority, and not shaving 20 minutes off the journey time to London. How about shaving 20 minutes off the journey time from Merthyr to Cardiff?
The airports in Wales need proper links to major hubs. Regular flights from Cardiff or Caernarfon to terminal 5 Heathrow, perhaps? It currently takes from Cardiff central over 4 hours to get to T5 via train, when it could be flown in less than an hour, with Cardiff the main passport control. Regular flights mean people will fly. Irregular and they won’t.
Very fast broadband, though already here in Cardiff, must be made available to any business in Wales that needs it. It is as essential as roads these days, particularly for video conferencing, never mind very large data traffic. I use it weekly to conference with multiple partners in the US, and in Europe, and though never as good as a face-to-face meeting, it is miles better than the alternative. Very fast broadband also allows us to access cloud and distributed-based computing services, at near real-time pace, and reduces the need for dedicated servers in-house that are expensive to maintain.
Energy generation
We already create twice-as-much electricity here in Wales than we use, so on the back of this we need to create much more. Industry needs affordable, stable electricity, and as a priority the WG should be given the right to sign-off large energy creation projects [ unlimited in my view and not the 350MW as proposed by Silk]. If we can provide cheap energy to industry, this will be an excellent draw for domestic and foreign investment. How we create electricity is important- we must look at all options, but we must also consider new forms of energy storage, particularly from the less steady sources such as wind and solar. Storing energy will allow us to timeshift its use, and can create an industry of its own.
Educating the next generation of engineers and scientists
To provide a highly skilled workforce for industry, we must generate more Wales-trained chartered Engineers and scientists, paid for by the Welsh Government. Those that choose to study engineering outside of Wales should be encouraged to complete sandwich courses with companies in Wales, so that there is a job for them in Wales when they have qualified. The Government here should consider paying for these courses, in part or full, and modify the graduates’ income tax rates in a minor way, to fund this, if necessary.
Lowering corporation tax to support Welsh manufacture
It seems unlikely that corporation tax will be devolved completely to Wales, as some fear a race to the bottom damaging tax take. However, in order to compete Wales must have the correct tools: therefore a corporation tax cut should be considered for manufacturing companies here. In the Republic of Ireland [ some 60 miles of water and 4 hours of travel away], corporation tax on trading income and thus, manufacture is 12.5% [it was 10% up until 2003]. We must be able to compete effectively with this low rate. I have seen first hand, how companies in the US that are considering settling here, look at the RoI corporation tax rates and plan to settle there instead. This, despite the fact that we are 4 hours closer to the European market and border 53 million in England. The Holtham report suggested that both Wales and Northern Ireland could have the limited ability to cut the rate while both countries’ economies are underperforming. Implementing such a measure would provide a much-needed stimulus. Now that Northern Ireland is being offered control over Corporation Tax then I wish to see Wales doing the same.
Building up the GVA of Welsh agriculture
Despite 77% of Wales’ total land area being used for agriculture it only accounts for 1% of the Welsh GVA. This seems inefficient; with room for improvement in the amount agriculture contributes to our economy. France for instance creates 2% of its GDP from agriculture. Farming in Wales must move towards more value-added food production, as seen successfully with some Welsh farm-based cheese, meat and beer manufacture. Wales has excellent food sources, but must create higher value out of it.
There is also a responsibility on us, the Welsh population, to promote, buy and eat locally sourced food. We should support our homegrown food and drink industry – much of it is excellent- and boost GVA at the same time.
Agricultural manufacture is, of course, not limited to food and drink. For example, why do we not make textiles in anger here anymore? There are pockets of industry but it is little supported. It needs supporting and growing. We have plentiful supplies of good quality wool here, and an industry that is flourishing in the rest of the UK, but less so here in Wales. Despite that we invented the word Flannel [ from Gwlanen] and its industry, little of this high value fabric is currently made here. With such a ready source of wool we need to reverse this, and compete with other European countries in this, and other, lucrative textile markets.
In summary, nothing about the Welsh economy is broken but it needs to get into shape again and we can, and should, learn everything we can from other countries that have similar terroir and similar strengths. And play to our strengths we must. We manufacture more, export more proportionally than the rest of the UK, and have plentiful resources with water, electricity creation and agriculture, but our economy is a little on the portly side and we must get it fitter and adapt faster.
We should be absolutely sure that it is not cheaper to manufacture in other countries if we automate where necessary and skill up – we are closer to the world’s largest market, the EU, than China or the US is. We must make and service capital goods, design and build machines that make products, train our people to design, as well as make, and be just that little bit prouder of our heritage which is extremely rich and steeped in industry. The industrial revolution started here – we must strive for a new one.
Well thought article Tegid but perhaps you should have looked at the impact of some big international names present in the Welsh manufacturing sector ranging from aviation in Broughton to car components etc in South Wales?
Take them out of the equation and immediately Wales has nothing of any significance or more simply put Wales is then on par with many so called ‘Banana Republics’ in the third world!?
Welsh Government has done little to nurture or to sustain home grown entrepreneurship in the manufacturing sector and have consistently failed to listen to the big industry effectively crying out for well educated and skilled youngsters that Welsh education failed to produce in the post devolution era through some highly dubious priorities and policies!?
This article is right to point to Wales’ underperforming economy as the elephant in the room of devolution, but, having identified the problem, the solutions it proposes reads like a wish-list from the 1970s.
The fantasy of a revival of manufacturing leading to rapid economic growth has already been exploded by, among others, Gerald Holtham:
http://www.clickonwales.org/2014/08/mills-plan-is-not-the-answer/
Of course, manufacturing still has a valuable role to play but the actual measures outlined here to ‘help’ manufacturing and other businesses amount to no more than a list of the economic equivalent of the ‘conventional pieties’ that most of us have been hearing all our lives.
Some are ‘motherhood’ statements with which no one can disagree, but others are positively dangerous. The idea of Cardiff Council investing in banks is positively frightening!
What Wales needs is a ‘cultural revolution’ from the bottom up not more top down government initiatives. Government can play a useful role in some areas, such as education and training, but in others the best thing it can do is learn to get go and not interfere with the free flow of the natural entrepreneurial juices of the Welsh people.
Jaques, thank you for your comments. Wales is reliant on its large manufacturing employers that is certain. I deal a lot with Sony Pencoed who have produced a generation of very experienced engineers that have filtered into the wider economy. They also procure a lot of materials and services locally. Working in entrepreneurship in the research, design and manufacture industries is my day to day work so that is what I know well. A lack of access to capital is a serious problem here and the last thing I want it more government initiatives that end up paying for quasi-public sector bums on seats.
JWR, as ever you just completely miss the point. the sort of manufacture I advocate here is for Capital goods. All your precious service industries require capital goods to function. Gerry Holtham does say that we spend less on manufactured goods these days but that is wrong as when we are buying services such as telephony, transport, banking, coffee shops, utilities we are buying part use of the service sectors’ large computing systems, aircraft, coffee machines, power stations etc. There is a human service element true but there is also a skilled service and repair element to keep the capital goods maintained and somebody has to MANUFACTURE them. Your local Starbucks has an extremely expensive and reasonably sophisticated coffee machine. It is not made in a low labour cost country and certainly not maintained there.
Since Mr Richards cites me in criticizing Tegid Roberts’ article I had better make my position clear. I criticized John Mills’ belief that you could engineer super-fast growth in manufacturing by procuring a large devaluation. I don’t think that is possible. I also criticized the belief that manufacturing could again provide large numbers of blue collar jobs. Modern manufacturing will provide a relatively small number of technical jobs. However that is not to say that an expansion of manufacturing would not be a good thing if it could be achieved. It would surely generate employment in business services, like law, accounting and finance.
In my opinion Tegid Roberts’ article contains some good ideas. There is a problem, for example, with business owners wanting to retire leading to the business being sold out of Wales. Employees will not always be able to take over but where they can a succession fund that helps them finance a buy-out seems worth exploring. And if you are looking to stimulate economic activity, looking at the companies already here and asking whether and how they can be encouraged to bring more of the value chain to Wales does seem a good way to start. Moreover I have often wondered myself why the Welsh government hands out grants to companies to start up in Wales. Why indeed not ask for a small equity stake to share in the upside – not enough to put the entrepreneur off and certainly not to meddle in running the company, perish the thought. It works in Singapore and other places that use public investment funds to partly finance social expenditures.
So while I don’t think all Tegid Robert’s ideas would work I think some very well might and Mr Richards is far too harsh and pessimistic. He wants a bottom-up cultural revolution. Well yes that would be nice. But how to bring it about? Sometimes judicious top-down intervention can help.
Tegid, you create a false dichotomy between manufacturing and ‘all your precious service industries’ (sic!), which does not occur in the comment. Reread the comment carefully: it does not mention service industries. What it actually says is ‘manufacturing still has a valuable role to play.’
Who has missed the point?
Mr Holtham, you summarise you position thus: ‘I criticized John Mills’ belief that you could engineer super-fast growth in manufacturing by procuring a large devaluation. I don’t think that is possible. I also criticized the belief that manufacturing could again provide large numbers of blue collar jobs. Modern manufacturing will provide a relatively small number of technical jobs. However that is not to say that an expansion of manufacturing would not be a good thing if it could be achieved. It would surely generate employment in business services, like law, accounting and finance.’
Absolutely right. You will note that nothing to the contrary was said or implied in the comment.
In answer to your question, the best strategy for an enterprise ‘cultural revolution’ is to be found in the Enterprise Chapter of the IWA’s own ‘Wales 2010’ report.
Yes, government can help – but, more often than not, by getting out of the way.
Regarding government intervention: the role of government is to seed enterprise, finance, infrastructure where the private sector either is too fearful or too small. Currently in Wales access to low cost capital for SMEs is a real problem, access to Private Equity is also very tough. Access to Venture Capital is all but non-existent. Therefore how are we to get this necessary finance in place?
The Landesbank Baden-Württemberg in B-W is a public owned entity that owns 3 commercial banks and invests in Germany but also Luxembourg and Switzerland. this bank is 19% owned by the city of Stuttgart, 25% owned by the state of Baden-Württemberg. This sort of entity is what I’m driving at.
As for infrastructure between north and south Wales: it is madness that it takes nearly 4 hours to drive from Cardiff to the 2nd largest industrial estate in the UK after Trafford park: Wrexham Industrial Estate and also Deeside Industrial Estate which is 2000 acres [and perhaps the future proposed Chester, Wrexham and Deeside city region]. To propose a good road or rail that goes from north to south Wales is viewed as nation building by some which is ludicrous. Infrastructure that allows good access to Wrexham means good access to Liverpool and Manchester as well. You can’t limit progress by fears about nationalism and cheap jibes about “motherhood statements”.
The only way the economy in Wales is going to prosper is to stop pretending that Wales is a viable discrete geo-political entity and return to the east-west links and common governance that worked for parts of Wales before devolution. Every braindead difference the WAG or the UK government creates between England and Wales is another chip off the viability of the Wales land-mass. Most of Wales’ uncompetitiveness is either self-inflicted or inflicted by the UK government with the blessing of the WAG.
Wales is no longer an attractive place to run a business. I’m damned if I would start-up or move a business to Wales now – not a cat in hell’s chance knowing what I know now! I can’t wait to retire!
In the early 80s Wales looked quite good from the outside with the likes of the Mid Wales Rural Development Board then the WDA making all the right noises and delivering on them under a business-friendly Conservative government but I hadn’t come across the likes of Gwynedd Council or the Welsh Language Board/Commissioner then, nor the unreformed Marxists in the WAG. And the health and education services were still on a par with England but now both are verging on unfit for purpose. I guess it took me less than a year to work out that North West Wales was/is a basket case beyond any kind of redemption for business development while it’s under the control of people who simply do not want to be part of the UK or to fit in with it. That malaise has almost spread throughout Wales now and it is getting worse every year.
Since devolution Wales has had about £150+ billion of basically English taxpayers’ money pumped into it in addition to billions of basically English taxpayers’ money via the EU. Where has it all gone? How much of it has been turned into self-financing enterprises? Not much – most of it has gone into welfare and the public sector which Wales just uses as another expensive form of welfare to massage the GVA and employment figures. Some went into mainly foreign industrial investments that found they couldn’t actually function in Wales so they cut their losses and left – they soon found out that Wales isn’t like England after all and that the soft money did not compensate for the additional difficulties.
The people voted for some of this and now they’ve got it… Trouble is we’ve all got it! Can it be turned round? Arguably not under current legislation or governance… Why struggle against intransigence when the whole world is open for business?
Mr Walker, I am sure you have valuable experience to share if you approached our very real problems in a positive spirit. However, you are so unrelentingly negative about everything in Wales that it is hard to engage with you or to take the useful points I am sure you could make.
Here’s what puzzles me. Many of the same people who think devolution is necessarily bad for economic development are the people who want to pull the UK out of the EU. If having different jurisdictions is so damaging in one case why is it so desirable in the other? The truth is people like JRW who pose as hard-headed business people are no such thing. They are just old-timers nostalgic for the particular governance arrangements of their youth. Yeah, yeah we know the Beatles were better than modern groups but not all political developments are for the worse. This old country is very slowly, painfully and inexpertly finding its voice and it’s feet again. The present government is not much good but we’ll find our way.
Hear! Hear!
Gerald (Holtham), Must admit I was surprised with your negative response to J R Walkers view points and I assume you simply had no answers to counter what Mr Walker had to say about the post devolution realities especially in North West Wales?
It’s easy to be dismissive and disparaging about those who do not share your optimism for Welsh prosperity under the devolution journey but the facts are facts and with 15 yeas behind us on this road to ‘more democracy’ and doing things the ‘Welsh Way’ we are seeing an unmitigated disaster and one needs look no further than the Welsh Education and Welsh NHS.
Emerging ‘nations’ in my view can only prosper if they strive to create a governance model that is above all democratic and one that is based on transparency and inclusivity of its population elements but what does the Welsh Government do in Wales?
Based on the Welsh Government’s public records it’s utmost and the first priority is to Socially Engineer Wales into a ‘Bilingual Nation’ by rigidly imposed compulsion and where education and public employment are the principal tools to achieve this very aim and to my understanding with no mandate from Welsh people either.
I’m fully aware that this is an unwelcome subject in the Welsh media but if anyone cares for Wales including you Prof Hollham lets have a high profile debate on this and examine the facts and see where we get to and before we do more damage to Welsh Economy its Education and the NHS by ignoring what’s in my view the most damaging and most corrosive part of the Welsh Governance so far!?
Well maybe, but what’s the Welsh for “Plus ça change?” “Recyled Boilerplate”? “Economic Development, Welsh Devolution’s dirty little secret”, to quote just its leading academic advocate?
Humility? Sorry, does not translate.
Mr Hotham, a certain type of contributor to this website brands any criticism of his own opinions as ‘anti-Wales.’ You are surely above that sort of thing, but you might want to consider whether your response to Mr Walker’s comments takes you dangerously close.
Those who are happy about the current situation and immediate prospects of Wales have every right to say so, but do not expect the rest of us to join in. Many of us look at the underperforming economy, the poorly run public services, and the lack of vision for the future, and we think Wales could and should be better than this. Saying as much is not ‘anti Wales’ but, on the contrary, serving Wales.
Incidentally, do not mistake a frustrated optimist for a pessimist. It is precisely because some of us believe in the immense potential of Wales and the Welsh people that we feel frustrated at the way that potential is being wasted by poor leadership and sloppy thinking.
This is not an attack on any individual. Indeed, perhaps it is also necessary to insert another warning, against mistaking any criticism for a personal attack. Too many contributors – including, it seems, Tegid – seem to be affronted by contradiction.
Tegid, do not shoot at the messenger here but when you say things that merit criticism you must expect them to be criticised. Do not take it personally.
While there is no doubt that Wales could do with more venture capital, or better access to venture capital, the sort of 1970s style ‘picking winners’ by the public sector has a poor record both in Wales and generally, and ought not be viewed as an acceptable substitute for the expansion of the proper commercial venture capital sector.
In the same way, spending on infrastructure is desirable where there is established demand or likely demand, but should not be considered as an acceptable substitute for proper economic development. Empty factories and unnecessary roads all over Europe prove the truth of that. Reading the history of how Wales’ wonderful network of canals and railways developed in the 19th century might be very instructive on this point. On your specific proposal, it would be interesting to ask businesses which they would prefer: a grand north-south road or improved broadband access?
The bottom line is that where businesses develop that provide the goods and services people need or want, both capital and infrastructure will follow. The key is to develop those businesses.
I note that the author is a consultant. This puts me in mind of the Churchillian opinion of consultants and the watch ( your watch). The other quotation that it reminds me of is from Bruce Willis in the Tarantino film Pulp Fiction talking about the erm… travels of the gold watch inherited from his father.
Basically, it is an earnestly written statement of the obvious. ie.Move along nothing to see here.
One factor in the decline of the Welsh economy that I haven’t seen discussed either here or elsewhere is that many people especially older people ( if they’re still here in Wales) are way overqualified and over skilled for the jobs that do exist. Has any analysis been done on how many PhD or degree level people or properly trade skilled are working in low paid or jobs unrelated to their training? How many people omit most of their qualifications and skills when submitting a CV? I know I have done many times. Jobs may have been claimed by government to have been created but it is the quality of the job not the number that will improve the overall economy in the long term.
The scrapheap for experienced or skilled people of 50 or over has grown hugely and the age at which the infamous ‘scrapheap’ starts is getting younger and younger. One symptom of this is that mortgage companies and banks are now apparently declining to give affordable home mortgages to people over 40 (even if they qualify on income grounds). The only organisation that I know that ‘gets it’ as far as this issue is concerned is Prime Cymru which is a charitable organisation set up by Prince Charles.
So therefore, depressingly, I am more inclined to agree with Mr Walker rather than Mr Holcomb or Mr Roberts.
Diolch i chi gyd am eich sylwadau. Thank you all for your comments.
It’s a problem. Can we blame devolution for economic failure?
Actually yes we can. Or rather what is quite clearly to blame is the move towards a growth in emphasis on National Identity. What makes enterprise successful is a large customer base and a healthy labour supply (the two are mutually supportive). In most of Wales we do not have this essential prerequisite. Worse than that, there is organised opposition to population growth from migration from the UK and more and more barriers are being put in place to ensure that Wales will become a difficult place to relocate to. Bringing in policies that make Wales “different” makes inward migration from the rest of the UK more unlikely and recent population growth has come from immigration from outside the UK to areas of already dense population
Nothing will raise the economic prospects of Anglesey, Gwynedd, Ceredigion and Carmarthenshire unless there is active encouragement to immigration……just as, you may remember, Scotland encouraged in-migration and immigration in the recent past.
John R Walker is correct. Wales cannot survive as Wales. We have to be absorbed into England. If that happens then EnglandWales could buld itself as a viable economy. Severnside and the Cardiff – Bristol union has to be the start of this. Sadly, Wales, as Glasnost UK rightly states, has been finished off by the Labour Party’s obsession with the Welsh language.
It says much about Welsh public life that if someone sold you a “clowns car” and within a year all the wheels had fallen off, the engine had exploded and the radio was stuck at lunchtime Radio Wales, you would scream ‘never again’ and demand your money back. But with “economic policy” the same charlatans and boosters can flog you the same box of decade old scap mixed up and repainted and we are all supposed to shout, “brilliant, give that man a task force!”
What was that Galbraith said about economists and employment?
For a bit of background that might or might not be of interest. i am a consulting electronic engineer of 20 years having started my career before University at a small electronics manufacturer in north Wales and then from York University to Sony Advanced Technology R&D Division in Oxford designing large digital mixing consoles for music, broadcast and film. From there to Sony’s European design centre in Basingstoke working on IPTV prototypes and Sony Venture Capital as a technology advisor. Tired of my 130 mile daily commute I left Sony and started up and worked on contract with a variety of Silicon Valley/UK start up businesses mostly in semiconductors including Clearspeed and Anadigm. The highlight of that work was designing a prototype digitally controlled Analogue synthesiser for Robert Moog. Since 2006 I live again in Wales and have more recently worked with Sony Pencoed and I had the idea of bringing the Raspberry Pi to Wales which has been very successful. I continue to work with Sony on various projects and Swansea Uni engineering department. I also have two startup businesses one commercialising IP I have in the medtech industry with Welsh, Swedish and US partners the other a software spin-out from Swansea which is taking a bit of time to get off the ground. I work as a part time technology advisor to BLOCKS smart-watches in London that recently took part in an Intel competition and did very well. I have a passing interest in Welsh politics and especially the economy. I derive none of my income from the WG or any other public institution. I do some pro bono where I see fit. Any charges of charlatan, “management consultant” or booster are taken with the offence intended and having a pop at Holtham is also very unnecessary.
This may or may not be relevant, but is certainly interesting.
http://www.telegraph.co.uk/finance/economics/11294713/The-reality-is-public-spending-cuts-are-helping-Wales-and-the-North.html
And yet…the “Slumbering Dragon” (sic) slumbers on. Quite an achievement you might deduce as all around him or her an entire decade of Welsh economic development initiatives have loudly left the track, hit the buffers or crashed and burnt. Economic development in Wales truly resembles the much loved old Barry railway engine scrapyard. LG, the Structural Funds, the Technium programme, the Pop Factory, the Intelligent Region strategy (sic), RTP, Communities First et al, all lined up with their wheels off and their boilers burst. Millions and billions of pounds of publicly funded scrap that no-one is ever called upon to account for as their careers as academics, politicians, pundits and poseurs cheerfully continue and prosper. Professor Kevin Morgan’s “dirty little secret” in more ways than one.
What a way to run a railway.
I have a lot of sympathy for Mr Roberts. It is sadly characteristic of those who have tried to turn this site into a platform for their (by any normal measures) extreme views about Wales and Welsh culture that anybody who is interested in developing ideas along rational lines will be subject to personal abuse. This also reflects the fact that many of these Trolls have to hide behind a series of aliases.
Sometimes it is quite comical. I have been accused of making my living as a translator. Shocking. Firstly, even if that were to be the case, is that such a bad thing? Secondly, doing policy research for the United Nations, the OECD and other bodies on trying to mobilise universal access to safe water and sanitation is something that I am not he least ashamed of. My favourite was when one of these Trolls howled that ‘David Lloyd Owen’ is a false name. It is on the list of IWA Life Fellows and certainly the name I use in my business, social and civic life. Finally, those who demand that Welsh is taken out of Wales would do well to exhibit at least a reasonable command of the English language; spelling, grammar, punctuation and the correct use of capital letters would be a useful start. An ability to marshal an internally coherent argument would also be a distinct advantage.
The difficulty here is that I have no objection to those who hold peculiar views being free to ventilate them as long as they do so within the law. But why do they have to hijack a site which is meant to serve as a platform for engaged and rational policy debate? Why are they unable to create their own platform? Why are they so dependent on the largesse of others?
I’m glad that people of the quality of Mr Roberts are taking an interest in Welsh politics and the Welsh economy. It is a truly rare thing when people from ‘proper’ industry engage with issues around the Welsh economy. Regarding consultants, offense is intended and implied towards the myriad of so-called business consultants that still plague the Welsh business world. Mr Roberts has been mislabeled as one of these and I am glad that this has been clarified by him.The only consultant that I want to consult is a medical consultant and then only at the last resort.
Speaking as a genuine management consultant – and proud of it – it is regrettable that Tegid uses the title as synonymous with charlatan. Still, no offence taken.
Talking of which – Tegid, honestly, no offence intended means exactly that. When a man advocates a bad idea, he should be told frankly that he is in the wrong, both for general good and also for his own good – no apology for that – but it would be worrying if his feelings were hurt by the traditional Welsh rough-and-tumble style of debate that is one of the charms of this site.
Tegid, Few months ago I attended a Bank of England presentation on Welsh economy held at the Bangor University – Whilst I accept your experience and comments but from the data presented at the meeting there is hardly anything of any significance that Wales contributes as a ‘supply chain’ to major manufacturing industries in Wales.
We should not forget that most of these companies are in easy reach of England and in case of Broughton Air Industry, less than a mile from Englnd border. Therefore even more important that Wales provides well educated youngsters that can compete for high tech apprenticeships and jobs.
Quality of education features large in the ‘Due Diligence’ process that potential inward investors use and Welsh Government has done Wales no favours by demeaning education standards through their social engineering policies and this is now highly visible in the informed industry circles.
If Huw Lewis reads IWA comments perhaps he should think again at the madness of diverging Welsh education from the curriculum standards and approach used in England – Whilst this approach may hide Welsh failings to making direct comparisons more difficult, Welsh children deserve better from the Welsh Minister for Education!?
Economic Development = Never having to say sorry
And you thought that was just “Love Story”? Well….Welcome to Wales 2014! NO one in the Welsh Policy Community says “sorry”. EVER.
It’s the law.
Winterson Richards: it was Richard Harris that mentioned Charlatans and boosters in reference to myself. Take it up with him.
With regard to the comment ‘Despite 77% of Wales’ total land area being used for agriculture it only accounts for 1% of the Welsh GVA. This seems inefficient; with room for improvement in the amount agriculture contributes to our economy. France for instance creates 2% of its GDP from agriculture.’may this be due to the fact that much of land is suitable only for grazing sheep? And in fact when you compare the quality and percentage of land available and used, Wales might come out as using it more efficiently than France.
As for the North/South transport links, nature creates barriers in the form of mountains and rivers. We instinctively follow those demarcations. The links that we do have date back to the time when planning was not an issue and there were commercial reasons for creating them. So it is difficult to see how you can overcome the North Wales ‘attraction’ to NW England or Cardiff to Bristol and the West. And is it really desirable? What price Nationalism?
Back to the debate: Winterson Richards, you state:
‘The bottom line is that where businesses develop that provide the goods and services people need or want, both capital and infrastructure will follow. The key is to develop those businesses.’
I fundamentally disagree with this statement. As I said in a previous posting above [which I partly repeat below because it was ignored] this is not how the most successful economic region of the EU sees it at all. The role of government is to seed enterprise, finance, infrastructure where the private sector either is too fearful or too small. Currently in Wales access to low cost capital for SMEs is a real problem, access to Private Equity is also very tough. Access to Venture Capital is all but non-existent. Therefore how are we to get this necessary finance in place?
If you don’t like the thought in the original piece how about:
The Landesbank Baden-Württemberg in B-W is a public owned entity that owns 3 commercial banks and invests in Germany but also Luxembourg and Switzerland. this bank is 19% owned by the city of Stuttgart, 25% owned by the state of Baden-Württemberg. Now I completely take your point about local governments in Wales having some control over such an institution but ownership and control are two different things. Note also that the Landesbank also owns the regions development corporation that is tasked with also assigning the EU structural funds as well. So instead of a WEFO type organisation a private company does the job with all the benefits and efficiency that brings. In summary I would like to see a development bank in Wales that owns a development corporation that is listed on the stock market and part owned by the WG and WLGA [ or such like]. If you don’t agree with this say why.
Wales economy “pretty poor”:
http://www.bbc.co.uk/news/uk-wales-30521738
“Wales’ economy has put on a “pretty poor performance”, an industry expert has said.
Prof Karel Williams from Manchester Business School said Wales has been falling behind for 20 years compared with the rest of the UK.
He said there was a “worrying trend” that the country was not creating the service industry jobs that were being created elsewhere.
His comments come as number of jobless people in Wales rose by 8,000, which is the greatest increase in unemployment throughout the UK.”
There seems to be an impression abroad that the Welsh economy is in continuous relative decline. It is true that Wales is a relatively poor part of the UK with low productivity but its position declined during the 1990s and since 1999 it has been stable. Welsh GVA (gross value added) as a proportion of UK GVA was a lowly 72 per cent in 1999. In 2013 it was still 72 per cent. (ONS data) Its growth performance over the period has been in the middle of UK regions. Compared with the other poor regions Wales has grown slower than the North East but faster than Northern Ireland. I do not credit devolution with the stabilisation of Wales relative GVA; i doubt if devolution has made a big difference one way or the other. I thought it might be a good idea to offer a fact against the apocalyptic gloom of some correspondents. As for not answering substantial points, I will always do my best. There’s not much you can do with a rant.
This thread may have run its course now, but I was just wondering about who or what group or body in Wales conducts research into economic visioning of the future, developing ideas for future scenario planning etc.
There are things in the future, which may be considered reasonably predictable. In terms of land use globally there will be an increased usage of semi-arid areas for both food and non-food crops. There will also be a growing shift away from silicon based electronics. There will be a continued reinvention of medicine – whether that emerges in the form of truly personalised models remains to be seen. In so many areas there are things that we can predict sometimes with almost certainty and other times, perhaps based on a gut feeling or speculation.
These things may assist our investment decisions for the longer term – which countries and sectors should we be engaging with globally for example, to position us for the next decade and beyond.
We could potentially predict with some accuracy a lot of the things that will matter to the current generation in education and the next generations to come. We could easily have predicted the growth of China almost two decades ago – would we as a country be better placed now, if we had considered that in our planning.
We cannot predict the timing of financial booms and crashes, but we can predict with absolute certainty that they will occur periodically and we can make predictions for what effect they will have on different sectors of the economy.
We might not be the initiators of change, but we could ensure we are well positioned for when changes occur. The successful role of governments and public bodies in industrial and business activities may be debatable, but there surely must be a body or think tank that deliberates future economic trends, technology positioning, land use requirements in relation to changes in demands for products derived from agricultural activities etc etc etc.
There are groups in academia and in industry that consider these things individually sector, by sector and we obviously listen and take note of think tanks elsewhere in terms of planning for the future of the NHS, pensions, education, migration etc, but is there a collective economic appraisal conducted on a Wales basis – looking at things from our perspective. How will we use our land and other resources over the next 20-50 years in terms of production and use of resources (on a national economic basis and on a higher level to general development planning etc) – what international links do we need to establish, should we establish links to areas that will be more important for trade purposes, which are not highly developed currently.
Who does this planning at the moment?
Tegid, as Aled says, this thread may have run its course, but since you ask a direct question, here is a brief answer. A development bank that attracts new investment capital to Wales would, of course, be welcome, but the diversion of public money into pet schemes would not. Given the past history of public investment in the private sector in Wales, which do you think more likely?
Aled: you raise good points and I agree with you. There are those in the Welsh government and the UK government that should be looking at these from a Wales perspective but lets not leave that to chance. The IWA or similar think tanks should be deeply researching what can be learnt on a global perspective. This type of research is important not just for governmental decision making but also for individual companies and institutions. The Cardiff Business school’s Welsh Economy Research unit serves to provide research on the welsh economy and regional economics in general but who is looking at the global perspective and how it impacts us here I do not know. I read an awful lot now about the automation of clerical jobs [ including call centres and back offices functions – we have quite a lot here]. What impact will that have here as we continue to encourage more back office functions here rather than the value added research and development functions across the sectors.
Tegid,
Your point on call centres and back-office functions is spot on. The need for these things, in their current form at least is going to be transient. We will always have to consider immediate economic needs and these things do deliver employment now, but we have to be mindful of the time spans involved in these things. If we had longer term planning then we could use sectors and industries which may be required for short term expediency as a springboard to future opportunities – the call centre of today might be the place to develop the skills that are suited to something else tomorrow?
I personally don’t know how coordinated forecasting and planning is conducted in other countries and regions, let alone the EU, UK, Wales etc. If you look at research planning for science and technology then there is clearly a lot invested at the EU level to identify priority areas etc, which links into things like the Horizon 2020 grant funds etc, but who is actually setting the agenda here within the higher echelons of the EU and where do we in Wales fit in to the thinking and forecasting. It would be nice think that we could have our own groups thinking about these things, aligning other ideas to create our own perspective – what opportunities could we expect to exploit, based on our demographics and resources. I appreciate that this is part of the essence of the IWA and its great tio have a forum to discuss these things, but do we have groups within our civil service, permanently employed to look at these sorts of things in a coordinated fashion. I appreciate as well that we have groups that create development plans and plans for economic regeneration etc, but we need something above these sorts of things, something permanently focussed at a much higher level, trying to envision the opportunities and risks that will lie in wait in the future
As a nation, exactly what are our means of production and what could or should these things be in the future – what technologies do we need to develop in order to access new products and markets, what are our most effective modes for sales and distribution? What will these things look like in twenty years time etc? Which countries should we be developing trade links with now – some would say Myanmar, but that’s an example of following the current trends, what about countries off limits at the minute, like Somalia perhaps, which may be economically very important in twenty years time maybe?
We need to look down the road a decade or perhaps twenty or more years from now, to imagine what will be needed and where we could direct our international relations, our research activities in line with perceptions of future economic scenarios.
We need to do a lot more speculating – we are always following the pack, trying to duplicate things that worked somewhere else. We need to divorce ourselves from immediate trends and be at the front in terms of developing news ideas and thinking. A lot of our speculations could turn out to be incorrect, but we will still be a country ahead in terms of our thinking and planning.
Tegid,
With regards to back office functions – this is a Deloitte publication which enivisions healthcare in 2020 and makes some interesting predictions about the eveolution of back-off functions in this area, which may actually be interesting points for debate in other sectors. Building on a backbone of back office and similar activities, by significantly upskilling and radically enhancing the networking of their activities, their analytics capabilities and expertise of the personnel could drive some competitiove advantage in many emerging new business models?
This is actually quite a good read, a bit different to some of the usual ones, which are extrapolations of trends etc.
http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/life-sciences-health-care/healthcare-and-life-sciences-predictions-2020.pdf
The interesting thing about things like this is that predictions from credible sources can quickly morph into self fulfilling prophecies.
@ Aled F
I agree that there are two approaches that the Welsh economy needs if we are to get out of the GVA hole that we find ourselves in. The first is taking advantage of the opportunities that exist in the current market. These are not opportunities of our making but they provide jobs and incomes for those in need of them in the here and now. For that reason, they are not to be snubbed.
However your point about the longer term prospects is well made. If we are to depend on back room jobs relocated from London, then we’re not going to get very far. The longer term perspective is a necessity. It remains worrying that we have had control of economic development for 15 years and we are no further on. There have been government announcements recently concerning new jobs such as Deloitte, Raytheon and Smartpipe Solutions inter alia, but what appears to be the case is that these developments are simply helping us to stand still rather than move forward.
Perhaps we need an Institute for Long-Term Economic Development which can examine the best way to finance the projects. I understand, for example, that Germany depends more on relationships with banks that specialise in long-term development rather than on equity, preferred by London, where short-term gain is the order of the day.
Aled, intersting article. I had a good conversation sometime ago with the head of research at Microsoft and also a similar conversation with head of european research at Fujitsu and their take on things was that the automation of legal, accounting, medical functions using High performance computing was here now and growing. Microsoft’s take is that HPC to them isn’t massive machines but cloud servers running much smaller applications specifically targeting traditional middle-class professions. Unless we specialise and move into more Creative, R&D or highly specialised niche expertise then we are in serious trouble. I personally would like to see the WG look again at funding Science and Engineering degrees in Wales so that we have the expertise we require. Time and again we have seen manufacture automated or off-shored, service functions automated or off-shored. What’s left? It’s the creative and expert professions where computation is too difficult.
Meanwhile back in the real world the government, the real government in Brussels, is introducing the dreaded ‘VAT MOSS’ as we speak which the UK government has failed to stop, as usual they talk the talk then capitulate meekly, and where the Welsh Government is a total irrelevance as usual.
This is going to have a major negative impact on existing and proposed businesses in the EU supplying digital content and, I suspect, it will hit the EU Region called Wales particularly hard because it has so many small businesses in precisely the fields likely to be adversely affected – the creative industries.
This is the braindead EU legislation which requires businesses which sell even £1 of ‘automated’ digital content into other EU countries to account for VAT on it at the rate prevailing in the country of purchase not the country of sale. Unlike digital content sales in the UK there is no £81K turnover exemption and VAT MOSS registration will be enforced by HMRC.
https://www.gov.uk/government/publications/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance
I have already abandoned a proposed online digital delivery project and I can see quite a lot of other people doing the same because we don’t need the hassle of maintaining corporate-level export VAT records in a micro-business which, in many cases, is just a paying hobby. And I’m one of the lucky ones because I found out about it in time to stop!
But this is just the thin-end of the wedge because this insane complication will inevitably be extended to physical goods making the operation of many micro-businesses a nightmare. Again, it will damage business development in Wales more than in urban areas. But that’s OK because I’m just unremittingly negative. So I’m told!
If Wales had more unremittingly negative – read realistic – people advising on economic development than maybe Wales wouldn’t be the basket-case economy it is – with no end in sight under current mis-management.
BTW – if making VAT and exporting more difficult than it needs to be offends you there are a couple of petitions you can sign – one to the EU Commissioner in charge
https://www.change.org/p/pierre-moscovici-a-unilateral-suspension-of-the-introduction-of-the-new-eu-vat-laws-for-micro-businesses-and-sole-traders
and one to the UK Minister who clearly isn’t in charge
https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-for-businesses-supplying-digital-products
I really don’t think there’s much point in talking to the WG about this – they don’t really count when it matters.
Even when you can see the yawning gaps and identify many of the good things that should be done, it is incredibly difficult to envisage, how those gaps can be filled using the resources and capabilities at our disposal. In fact there is no collective “our” when it boils down to it.
There is no risk capital for kernels of clever ideas – there never has been and it is difficult to envisage when there ever will be. We don’t have the depth of private wealthy investors who are willing or able to take a punt on either individuals or great ideas and that is certainly not a gap that public funds are ever going to fill.
I don’t think creating or attracting engineering expertise or scientific talent is at the crux of the issue. I personally tried to create and run a niche R&D centric business for over ten years, at our peak employing 12 world class scientists, ten with PhD qualifications and a lot more academic and industrial experience besides. Attracting the talent was almost too easy, with CVs flooding in from some of the world’s best institutions and companies. Creating a viable business model, in the absence of significant risk capital, to productively accommodate them was an elusive challenge. In the EU and US currently we probably have the most overqualified, zero hours contracted and in essence virtually unemployed individuals that the world has ever seen – the wake of the financial crisis has produced a dispersion of unproductive expertise.
There are lots of frustrations, but ultimately there is no-one to look to for a guiding hand or a bunk up. It’s nice to dream that there would be some public funds that could be released for productive commercial research work that could be used to spark a revolution in our economy, but I don’t think that will happen any time soon particularly in the cash strapped, over cautious and overly scrutinised society that we live in. The public purse is a small pot with too many needs to service.
Personally I’d like to think that I’ve had a go, using my own limited funds, following a naive dream that I could create a company that could derive value from commercial contract research and the generation of proprietary intellectual value. Ultimately, despite some good profitable times, where all the profits were reinvested, it has finally come to naught and come up short, making me very poor in the process. The economy has no doubt had a few million extra put into it for my folly and I learned a lot in the process.
Fundamentally, we lack the ability to create critical mass from small enterprises and we lack the private investors with the risk capital and mindset to make “gut-feel “investments. I see lots of small enterprises that would work better together than apart, but putting these together requires investment and mergers and acquisitions is not a word normally thrown around in the context of very small businesses or micro enterprises.
In Welsh society, the bulk of our collective wealth has probably grown through the service of many in the professions. These are typically low risk environments where individuals develop attitudes and mindsets which probably view risk taking as an anathema and hence this collective wealth is also unavailable as risk capital for early stage investments.
Finance Wales – great for many early stage investments and perfect for helping to start many types of small business, but like everyone else these days they’ll want it guaranteed to the hilt, before parting with any of it i.e. not really in the game for taking on risks. VCs take risks, but they don’t invest in small businesses – this is an age old problem and I have no idea what the solution is, apart from the fact that there is an essential need for significant risk capital for small enterprises and start-ups. It is essential if we want to drive our economy forward on a new trajectory.
Your point, Aled, about risk capital is particularly relevant. There is little established risk capital in Wales but plenty of comfortably well off people in low risk jobs. Risk to those people is buying and renting out a flat. As I have said before if the private sector is too small or too fearful to provide it then Government should seed. The challenge with Finance Wales is that they are hamstrung by politics and very uncompetitive rates. I heard recently that an SME in Cardiff was offered expansion capital at 21% from FW. You can’t work with that level of interest. There are of course other sources of capital such as crowdfunding and funding circle but their use in Wales is in its infancy.
@AledF has (again) raised an important point/issue when he states ‘ we probably have the most overqualified, zero hours contracted and in essence virtually unemployed individuals that the world has ever seen’.
There is absolutely no lack of skill, ingenuity, qualification or expertise in the Welsh workforce especially in the older generation who are being consigned to the ‘scrap heap’ at younger and younger ages. Tragic.
The economic situation will only change when something is also done to keep the younger generation in Wales and make it more attractive for them to stay. Look at Ireland for what happens to National confidence and well being when they attracted back their emigre’s during the ‘Tiger’ years and compare with now when these same people are queuing up to leave in these ‘austerity’ times. Unfortunately we have never had any ‘tiger’ years even in Tiger Bay. Our young people, if they have anything about them (and even if they don’t), continue to drain in droves across the border or abroad.
What will keep young people in Wales or more importantly make them come back? Don’t crucify them financially with huge debts for education and training. Make sure that decent affordable accommodation in the cities is available to rent/buy and good night life and beer. Simples – they will (probably, maybe, here’s hoping) do the rest .
As for the ‘traditional’ family and children, well they’re doomed to a lifetime of paying for childcare costs ( the boom business), council tax, rates, energy bills, mortgages, insurances, credit card bills, funeral costs etc etc ad infinitum. You’re not going to get an economic miracle out of them.
@ Tegid Roberts
“There are of course other sources of capital such as crowdfunding and funding circle but their use in Wales is in its infancy. ”
Every time you write “in Wales” or similar you appear to lose sight of economic reality – reality is that Wales is still (just…) part of the UK and there is no obvious shortage of B2B capital available in the UK for viable projects. It’s not long since we raised £600K in about 4 hours on one platform.
I have money in 4 businesses in Wales through syndicated loans but the fact is that decent proposals coming out of Wales are few and far between. This may be because the ‘system’ in Wales pushes people towards expensive bureaucratic solutions like Finance Wales but that is just part of the damaging parochial mindset operating in Wales. Wales seems to be imploding into its own lack of vision on pretty much all fronts…
@ Aled F
You have brought us to the heart of the problem, namely how to finance economic development in Wales.
There is no silver bullet even in the private sector. Solutions range from loans to equity and all stops in between. But I believe you’re right in saying that there seems to be an absence of strategic approach and support in developing prosperity in Wales. It was very interesting to hear of your experience in setting up and running an R & D company. As you say, you have learned a lot from your experience and it would be interesting to hear more of your experience sometime and you certainly have my respect in putting your ideas into practice and facing the difficulties resulting from that decision. However your experience, whether good or bad, gives authority to your comments on the current deficiencies in the financial structures that underpin our economic activity. These are the kind of contributions that will serve the working group on the economy well.
JRW: Funding circle has seen a huge growth in the UK and in particular Scotland and Wales [ which is up over 78%] over the last year – Wales’s share of the £500M pot is about 5% so in line with our population size. However funding circle is not risk capital in the sense that it more like traditional bank lending in an era when bank commercial lending is very risk averse. Funding circle requires 2 years accounts and turn-over of £100K so doesn’t work for pre revenue R&D type and Uni spinout high tech ventures.
Your charge of losing sight of the economic reality is again trying to be personal without knowing who I am. Really do you think I’m that stupid not to know that Wales is part of the UK and that UK wide funding is available here? My comment was just that my perception is that more innovative funding models are used less here [ that is a criticism of Wales on my part if you hadn’t noticed] – one of my primary ventures at the moment involves commercialising IP with a US, a Swedish and an Irish companies but this is the Institute of Welsh Affairs so the focus of comments are about Wales, naturally.
@Tegid Roberts
I’m not trying to be personal I’m trying to be realistic. I’ve spent 30 years watching Wales rise then fall and, alongside the negative experiences of most small business owners I know, I think I know a bit about what has worked and what hasn’t.
Funding Circle is a platform I actually rejected when it launched though it has done £483m of loans to date. Like a lot of early entrant P2P sites there has been a race to the bottom and the returns don’t seem to reflect the risks any more. It would help if HMRC would allow P2P losses to be offset against P2P or all income. Again, that’s a UK competence. The UK government is now funding the P2P business loan market as they slowly play catch-up. That’s also helping to fund the race to the bottom for lenders just like soft money to the banks funded the race to the bottom for savers… Fail! Should the WG do the same – no – what’s the point? Should there be a Wales orientated P2P or B2B site? I would say not but if one appeared I would look at it but experience says in a pretty jaundiced way!
It’s difficult to define a start-up and risk capital. There’s no point in funding failure – it doesn’t do anybody any favours in the long run except maybe the insolvency industry and I have no time for them! There are a lot of SPVs out there with no trading history but set up by established entrepreneurs. On paper they’re start-ups but there’s less need to treat them as such where the people have a track record. I have invested in several pure start-ups on other platforms, and several SPVs. Some of that I would classify as risk capital. Some of it I have lost but that’s how it is… I don’t need lectures about this market – that’s an insult to my intelligence…
I totally agree with your assessment that there are plenty of well paid risk-averse people in Wales for whom a buy-to-let is the limit of their imagination. I have little doubt some of them are working in the business ‘advice’ sector! It bothers me, and has done for YEARS, that the quality of business advice available in Wales from the public sector sponsored agencies is poor. Staffed mostly by people who come under my heading of never having had a proper job, and the same applies to the majority of the political class in Wales, though it’s a disease that’s now spread to Westminster as well. They are truly appalling – the blind leading the blind and, if they’re daft enough, the blind leading the sighted. I’ve lost count of the businesses I know which have been forced to move out of Wales to get what they needed to move to the next level, and they are better value than start-ups. They never come back! All I am trying to say is that any start-up, or expanding business, which limits itself to advice and sources of funding from inside Wales is working with at least one hand tied behind its back.
Taken in the round ‘Wales’ is driving businesses out and driving businesses away. It is also driving commercially minded people out and away. In short ‘Wales’ is becoming a toxic brand and that toxicity has also spread to the public sector in my part of Wales where recruitment and staff retention has become a real problem. This is a political problem and all the signs are that this is not going to change any time soon – it’s getting worse and worse – and that’s why I regard Wales as being marginal for investment, at best…