Confidence needed to shape our future

 

Rhys David looks at the work to date of the Welsh Government’s sector panels

“Welsh bio-technology company sold to world’s biggest pharmaceuticals giant in multimillion pound deal”; “Material sciences breakthrough from Swansea University labs”; “Anglesey welcomes 50th cruise ship of the year”.

These are the sort of headlines we might be hoping for from the strategy of concentrating much – but not all – of the Welsh Government’s efforts on nine key areas perceived to offer good prospects for growth, an approach announced in 2010 as part of  the then coalition’s economic renewal programme. But are we likely to be reading them any time soon in our newspapers or on our screens?

The odds, it has to be admitted, are long. Conditions in Europe are against us: the Continent’s recovery is likely to be slower than that of the US and Asia. Wales has skills and infrastructure deficits which have defeated long-standing aspirations and attempts at a cure. And competition will be tough: there are few advanced territories that have not identified sectors such as biosciences, advanced manufacturing and the creative industries as their targets.

The Welsh Government’s Sector Strategy

Six sectors were originally chosen

  • Advanced Materials and Manufacturing
  • Creative Industries
  • Information and Communications Technology (ICT)
  • Life Sciences
  • Energy and Environment
  • Financial and Professional Services

A further three were added later

  • Food and Farming
  • Construction
  • Tourism

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yet, as Lord Rowe-Beddoe said at the IWA’s recent national economy conference, breaking a 16 year vow of silence as a past chairman of the Welsh Development Agency, we need to recover some of the self-belief Wales was exhibiting in the closing years of the last century. Then, if not everything, at least quite a lot seemed possible. Lamenting the constant drip-drip effect of poor statistics and the public unease these could promote, he said we must get back to believing that we are more than capable of shaping our future. Why otherwise would inward investors want to come to Wales, he queried.

 

Cue Sir Chris Evans, another speaker at the IWA event, who just happens to be chairman of the life sciences sector panel as well as one of Europe’s most successful scientific entrepreneurs with a record of starting 80 companies and creating new value of more than £5bn. Midway through March this year Sir Chris and Business Minister, Edwina Hart, unveiled plans for a new fund to be supported by £25m a year of public money in each of the next two years, with the aim of attracting similar amounts of match-funding from the private sector. The fund, which will have its own private sector managers based in Cardiff, is designed to support existing and incoming businesses in the life sciences sector, and to attract top scientists to work in Wales.

At the IWA conference Sir Chris had identified what he saw as the sector’s main problem in Wales: commercialization and internationalization of activities once companies had been started up and begun to grow. As the most tangible outcome so far from the sector strategy exercise it is undeniably impressive and certainly sets a benchmark for the other sectors to follow. Here, however, the results so far have been mixed. Some panels – and it has to be remembered nearly all have been in place for more than a year – seem to be barely beyond the stage of sketching out where their sectors stand.

Take for instance the financial service sector. Its advice to the minister describes its vision thus: “To make Wales the most competitive region in the UK for financial and professional services outside London by 2021”. One of its challenges is to “grow employment in the F&PS (its acronym) sector from 124,000 to 200,000 by 2021, while another is to grow jobs and GVA [Gross Value Added] in our sector faster than the UK average”. A “key driver” is summed up in this baffling statement: “The 1.4m population living in the Cardiff City Region, and its close proximity to London make Cardiff one of Europe’s fastest growing cities.

The suggested strategic priorities include the need to “sell Wales’s business propositions to the world and particularly London” and provide training support to improve the “rich pool of professionals available for fast-growing businesses”. To deliver the vision it will among other things “target international financial and professional services  businesses”, “offer a flexible whole of Government approach with generous funding” and engage the largest 100 F&PS companies in Wales, and “develop a three year business plan identifying growth opportunities for them”.

Similar pearls of wishful thinking have sadly been heard before. Indeed, it would be worth looking back at the papers left behind by the South East Wales Financial Initiative headed by City financier, Godfrey Jillings, in the 1990s. Jillings opined then that Cardiff and the rest of south Wales would secure professional services because of its “advanced electronic communications and high calibre staff”. He was clear most of the investment in Wales would be back office functions and indeed this has proved to be case. Which businesses or business operations the latest incarnation of Wales as a financial centre will comprise or what form Government support should take is not defined by the latest panel, leave alone how the journey from boosterism to bricks and mortar will be made.

To be fair there are some sensible ideas in the various reports and some senior businesspeople have been recruited.  The ICT panel starts with the rather depressing observation that its sector is largely invisible on the world stage and has actually seen a decline in companies and employees since 2002. It identifies priorities – stronger links between suppliers, and users of ICT products and services, public sector procurement opportunities, and increased R&D, but the delivery mechanisms it suggests – active marketing and communication of Wales’s ICT message, for example, or closer engagement with companies in the sector – can be little more than holding comments.

There are some sensible recommendations from the creative industries panel which wants the sector among other things to focus resources on those creative businesses which sell or license products and services to markets outside Wales, and to ensure that training and education relevant to the sector are aligned to the needs of business and the digital economy. It also has ideas as to how the priorities could be delivered, for example through continued Welsh presence at trade fairs, access to finance – particularly for export-oriented businesses – and a strong Wales Location Service. Likewise the advanced materials and manufacturing panel wants to see clear milestones established, a much stronger evidence base, strategic evaluation of capital projects and a defined delivery mechanism to govern the sector’s path along the agreed route map. Good stuff but not the flesh on the bones that is needed, a criticism that applies to most of the panels.

One nagging doubt about the sector strategy and its chances of success is bound to be a point made by Professor Garel Rhys of Cardiff University at the recent House of Commons select affairs committee hearings into the Welsh economy. Referring specifically to inward investment and the re-organisations that had taken place, including the abolition of overseas arm International Business Wales, he claimed the Welsh administration in Cardiff was short of the right sort of competence. Many young officials, he felt, lacked experience and feared getting things wrong. “The base unit of decision-making is increasingly the sector team. However, so many of these are so small they cannot do very much.” He adds later: “Potential investors all too often feel that they are being shunted back-and-forth when they try to establish contact with the Welsh administration and to no real effect. The experience… is more driven by ticking boxes than by decision-making. Some investors have been moved on by sectors that felt a project was too big for them, others felt they were facing “boys with toys” who displayed a failure to understand the nature and significance of a project.”

Similar though somewhat less trenchant doubts about the capacity of the Welsh civil service were expressed at the IWA conference which clearly will have to be operating at its most competitive and commercially-minded if the sector strategy is to deliver the goods. Where led by as forceful, decisive and successful a character as Sir Chris Evans, the process of establishing a clear strategy and implementing it will clearly be driven along at a rapid pace and it is likely officials too will be galvanized. Every single one of the panels, however, will need to be as pro-active. They will need in each and every case to be a combination of powerful and industry experienced members with forthright ideas on how to inject “velocity” – one of the key words at the IWA conference – and experienced Government officials with the authority and courage to make tough decisions.

Time is clearly pressing, as the latest unfavourable – though in many ways misleading – comparisons of Wales with Greece and Romania make clear. If we fail to get the latest structure for delivering economic growth both right and capable of delivering,  there is a real danger the good old Welsh economic jalopy – registration number GVA 78 – will just chug along as before, the sat nav constantly demanding a series of U-turns, lefts and rights.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s