Get me to the conference on time!

As so many countries around the globe face the challenges of economic and financial recovery, entrepreneurship and small business are increasingly key to a regeneration of local and regional, as well as national, economies. This month’s blog therefore highlights two very relevant conferences that will be in Cardiff in November 2013.

The ISBE 2013 Conference (“Escape Velocity: Entrepreneurship in an Internationalising Environment”) is coming to Cardiff City Hall on 12th & 13th November 2013(with associated activities on 11th and 14th November). The theme for this year’s conference will be focused on the diverse ways in which internationalisation processes are shaping entrepreneurship, in both home and export, through the following tracks:-

  • Business Creation and Business Closure
  • Business Support Policy and Practice
  • Creative Industries Entrepreneurship
  • Business Growth
  • Enterprise Education
  • Entrepreneurial Learning in Organisations
  • Entrepreneurship in Minority Groups
  • Family Business
  • Finance, Venture Capital, Taxation and Regulation
  • Gender and Enterprise
  • ICT, IT and E-Business in the Small Firm Sector
  • International Entrepreneurship
  • Networks, Innovation and Resource Acquisition
  • Rural Entrepreneurship
  • Social, Environmental and Ethical Enterprise

In addition to papers delivered in these tracks there will also be panel debates, specialist workshops, and policy discussion activities. The South West England and Wales Branches of the Regional Studies Association are also holding their joint conference, entitled “Growing Regional Economies: Wales and the South West of England in Relative Context”   in Cardiff (Thursday 14th November 2013, Cardiff City Hall: 9am-3.15pm).

This is also designed to facilitate and stimulate dialogue between policy makers and academics to enhance and improve understanding of the workings of our economies and to make the UK’s regions and nations better places to live. The themes are :-

  • Local economic development and Regional growth policy in context, including the city-region
  • Entrepreneurship, FDI and internationalisation processes
  • Skills development, Knowledge Sourcing, and impacts of policies such as Enterprise Zones
  • The Role and Scope of Universities in Regional Economic Growth
  • Health and Poverty in local and regional contexts
  • Impacts of the economic crisis

 The Regional Studies conference also offers an opportunity to network with academics and practitioners, with a focus on the South West of England and South Wales. Further information regarding the conference, including early submission of conference abstracts and papers can be found by contacting Professor David Pickernell, Centre for Enterprise, Business School, University of Glamorgan, Pontypridd, CF37 1DL E-mail: dgpicker@glam.ac.uk.

 

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Plus ca Change Plus ca meme chose?

This month’s blog takes a look at the prospects for 2013 and asks whether we can expect better than the year just gone.

In considering the outlook for the Welsh economy in 2013 it is important to first put Wales’s economic situation in the context of the year just gone. In terms of growth, for example, the reality is likely to be around 0% growth for 2012 as a whole, with the quarterly figures swinging between contraction in the first two quarters to expansion in the third, and probably back to a small contraction in the last quarter of the year.

Recent research by Bibby found that 98% of firms in Wales did not believe the UK government had taken sufficient action to avoid a double-dip recession in 2012 also proved accurate. The outlook for the Welsh economy in 2013, therefore, remains challenging.

For the UK economy the 2013 growth forecasts are again, unsurprisingly, variable, with Price Waterhouse Coopers predicting 1.8% growth and the Bank of England predicting only 1%. At the very least we can expect growth to be below its long term trend level, and Wales will obviously be affected by this in 2013.

For example, low growth is predicted to have a knock on effect on unemployment, though, somewhat surprisingly to many, this has not really occurred during 2012. Whilst the NIESR predicted unemployment in the UK to reach 8.3% in 2012, the latest figure of 7.8% is relatively positive news.

In Wales the latest figure for Wales of 7.9% is also relatively encouraging. The British Chambers of Commerce highlight, however, that this combination of statistics, where the numbers of people employed and hours worked have risen by 1.4% whilst simultaneously GDP fell by 1.2%, implies a 2.6% decline in productivity to explain the UK’s experience of employment growth without economic growth.

Whilst they believe this is partly explained by growth figures that are too pessimistic, they also predict that the recent falls in unemployment, which Wales has shared in, will not last, with an 8.5% unemployment rate by the end of 2013 predicted for the UK as a whole. Unemployment in Wales is also therefore likely to increase next year.

This prediction is based on a combination of effects. Specifically, the planned cuts in public sector employment will continue to feed through, combine with a likely reversal in the productivity falls of the last few years, and likely stagnation in domestic demand and in our main export markets.

Despite this challenging situation, however, there is also at least some positive news. Inflation is predicted by those, such as Price Waterhouse Coopers to fall to 2.3% in 2013, whilst consumer spending growth is predicted to rise by 1.3%.

As for 2012, however, there is little sign of above inflation wage increases occurring for us in Wales, or indeed in the wider UK. Instead the annual growth in pay is predicted to continue rising at a slower rate than prices, by for example the British Chambers of Commerce.

In Wales, overall wage growth is likely to be worse than the UK figure. This is because of our disproportionate reliance on the public sector, the job losses in the public sector and the policies of wage freezes and pension contribution increases determined at the UK government level.

Wales also continues to lag significantly behind the rest of the United Kingdom in terms of Gross Value added per head. The latest GVA per head figures show per capita GVA in Wales is still lowest in the UK, with a GVA per head figure that is only 75.2% of the UK average.

More encouragingly, Wales is closing the GVA gap with the UK average. GVA per head in Wales grew by 1.9% between 2010 and 2011, much faster than the UK rate of 1.4%.

Clearly a repeat of Wales outperforming the UK average in 2013 would begin to represent a positive return for the Welsh government’s economic development policies. It is in exporting in particular, however, where potential opportunities exist.

The British Chambers of Commerce predicts a 5.3% increase in UK exports for 2013 (compared with 2.6% in 2012) as against a 4.1% increase in imports for 2013 (2.6% in 2012). The traditional export markets of the EU are again unlikely to provide much additional demand, however, therefore requiring Welsh firms to look further afield.

As in 2012, therefore, it is the private sector that is the key to the economic revival in these fiscally constrained times. Government and universities can, however, help catalyse and facilitate the private sector to meet the challenge through the encouragement of quality improvements, innovation and entrepreneurship.

The Welsh government has also introduced a number of policies aimed at supporting business in Wales, including Enterprise zones. The recent 2012 Wales Quality and Innovation awards, which also included the Future Entrepreneur awards, illustrated the positive possibilities for the future.

It is the initiatives represented by these types of awards that are vital in highlighting and demonstrating the innovation, entrepreneurship, skills development, quality improvement and leadership required to succeed in the ever more competitive economic times in which we will find ourselves in 2013.

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The Dawn?

This month’s blog discusses the latest growth figures, asks whether the UK is finally emerging from the recession and how Wales fits into this equation, and highlights Global Entrepreneurship week and promotion of entrepreneurial activities taking place in Wales in the coming year.

Very recently the Heseltine report has made some clear proposals to stimulate growth in the UK. These include devolvement of spending more locally, an increased role for cities and Local Enterprise Partnerships, greater employer input into education, and a national growth council.

It is interesting that this should come at this time, given that one of the perceptions the report was responding to was that the government did not have a clear growth strategy. It is also interesting, however, because of the more positive recent news concerning growth.

 Official figures showed that gross domestic product (GDP) grew by 1% in the third quarter of the year, after three consecutive quarters of declining output. This heralded the end of the so-called double recession.

If one delves into the figures a little deeper, however, this headline strong growth figure is not quite as it seems. Specifically, if we strip out the likely one-off effects of around 0.5% for the Queen’s jubilee and 0.2% from the Olympics, then it is likely the real growth figure is nearer 0.3%, also making the assumption that these figures are not revised downwards in the coming months.

More generally, if we look back a year, GDP in volume terms has been flat in Q3 2012 compared to Q3 2011. Looking on the positive side, this can also be seen as showing that the UK economy, stripping out one-off factors, has been flat rather than in recession in the last year or so.

This cannot disguise the reality, however, that, as the ONS has calculated, the UK economy contracted by 6.4% between the start of 2008 and mid 2009, only recovering around half of that since. This suggests, therefore, that there is still an urgent need for a long term plan for growth from the government, to which the Heseltine report provides a contribution.

To this mix, however, it is important to look at what is happening in Wales. In the longer term and of  a more uncertain nature, there are discussion concerning the role of Cardiff Airport.

On a more immediate note, there is good news concerning entrepreneurship, with the publishing of the latest Global Entrepreneurship Monitor report. On the positive side, the rate of early stage entrepreneurial activity in Wales, at 8.1%, was a strong increase on the 5.8% rate in 2010 and ahead of the UK average (7.6%). In addition, the rate of female entrepreneurship (6.1%) was at a record high.

On a more negative note, however, a higher proportion (20%) were focused on entrepreneurship out of necessity in Wales, as compared to the rest of the UK. Also, under 18% of non entrepreneurs saw good opportunity for starting a business in the next 6 months compared to nearly 30% in the UK as a whole.

Whilst in some ways this again indicates a mixed message, it does in broad terms indicate positive news for entrepreneurial activity in Wales, that activities such as Global Entrepreneurship week can build upon. On that note, it is perhaps also opportune that the Institute for Small Business and Entrepreneurship (ISBE) conference is coming to Cardiff in 2013, with its policy roundtable offering a great opportunity for academia, business, and government to explore how enterprise can assist in growth of both the Cardiff City region and the wider Welsh economy.

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Stop-Go Economics

In October’s blog we look at some of the recent economic figures for Wales and the UK and the calls for more unorthodox economic policies than those already attempted.

The latest market services figures for Wales and the UK, make for interesting reading. Specifically, they illustrate the “stop-go” nature of the economy in Wales and the UK, perhaps illustrating why experts such as Lord Turner have begun calling for new policies to deal with the economic situation.

Broadly the figures show output from the market service sector in Wales at its highest level since before the recession. Further, over the last year market services have risen by 4.9% in Wales compared with only 1.9% for the UK as a whole.

Simultaneously, however, compared to the previous quarter, services in Wales have grown more slowly than for the UK as a whole. Moreover, this pattern is repeated across a number of the parts of the service economy deemed of particular importance by the Welsh government.

Indeed only for Financial and Insurance Activities and Information and Communication activities has Wales seen year on year and quarter on quarter growth and a superior performance to the UK as a whole. Overall, these figures therefore both relatively good news for the Welsh economy, but also that any economic recovery is likely to be stop-go in nature in the short term at least.

It is therefore unsurprising that Lord Turner, Head of the Financial Services Authority has called for more unconventional policies to stimulate growth. Specifically this is to counteract the negative effects that current trend in simultaneously reducing private, business and government debt are likely to have on demand in the economy both now and future years.

One policy apparently suggested is that the Treasury does not pay back all of the government debt it has acquired using quantitative easing. Effectively this means printing money.

The government has also suggested policies that can be seen as unorthodox, this time on the supply side. The Chancellor’s proposal for employees to have the ability to exchange their employment rights with respect to unfair dismissal, redundancy, flexible working requests, time for training and notice of maternity leave, in return for capital gains tax free shares in the company.

Most encouraging from the Centre for Enterprise’s point of view at least is the news that nearly 5% of university leavers are now going into self-employment, up from only 3% in the middle of the 1990s. This may be partly due to the lack of traditional alternatives in the public sector.

More positively, however, it may indicate a trend that new and innovative policies should look to further promote. In particular policies that acknowledge the increasingly important role for universities, not only in commercialising their own innovation and IP, but also in developing and promoting the innovation, entrepreneurship and commercialisation activities of their graduates would seem to chime with the current times.

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Turning an Oil Tanker?

This blog marks the first in the newly monthly format of the Centre for Enterprise blogs, designed to both summarise events from the previous month and also look at the issues highlighted in more detail. This month focuses on the twin dangers of focusing too heavily on short term statistical headlines, and not enough on long term trends.

The rise in the latest inflation figures (both the consumer prices index and the retail process index) is obviously unwelcome to the government and the Bank of England and may, to some extent, dampen the “feel good” factor generated by the Olympics. It is important, however, not to get carried away by one month’s figures, particularly, if, as seems likely, a number of “one-off” factors can largely explain the rise.

Overall, most analysts believe that the general trend in inflation is still downwards, towards 2% and that the Bank of England will consequently continue to focus most of its efforts at stimulating the economy via monetary easing. The focus on growth is now clearly at front and centre, particularly given the contraction in the Eurozone economy.

Ultimately it is this, rather than one month’s inflation figures, which will be the focus of the Bank of England and the UK government’s medium term strategies. The recent TUC report was very interesting in this regard, therefore.  

It found that by 2008 the UK economy had become unbalanced in four key ways – by expenditure type (too much on consumption and imports, not enough on investment and exports), by sector (too much reliance on financial services and too little on manufacturing), by region (too much on London and South East, too little on Wales and the North) and by wage share (too much on higher earners, too little on lower earning groups). It also argues that over the past two years there has been little progress on rebalancing by any of these measures and that the Coalition Government is therefore failing to “re-balance” the economy.

If one accepts the assertion that the economy was “unbalanced” then the TUC’s assessment is indeed a fair one. It does, however raise three points.

First, do the factors that create the imbalance constitute a problem? Second, can the government do anything about this? Third, to the extent that they can do anything about this, how long is this likely to take?

The issues highlighted certainly constitute a problem for the UK economy as a whole. Indeed, they are linked both with each other and to the generation of the economic conditions in which we find ourselves now.

 In terms of the second point, the government does, at least potentially, have levers that it can use to promote investment and exporting over consumption, as well as greater promotion of sectors other than financial services, growth outside London, and a more equitable distribution of income, through the tax system for example. The coalition, however, has until now been primarily focused on fiscal deficit reduction rather than rebalancing the economy. It is also unlikely that the government will focus on rebalancing of the economy in the near future specifically, given that it is financial services and London and the South East from which growth is most likely to come in the first instance.

On the third point, given that it took many years to generate the economic structure seen in 2008, it will also take many years of sustained effort for a change to occur. Whilst long term economic problems would likely be created if nothing is done, therefore, in the short run a fundamental shift is unlikely, particularly as the economy looks for any growth before it looks for “the right type of growth”.

Government statistics released last month further illustrate indicate the scale of the task facing both Welsh and UK governments, if they wish to “rebalance” the economy, for example, towards manufacturing and away from financial services.

Between 2001 and 2010 the numbers employed in manufacturing in Wales fell by 33%, compared with 30% for the UK as a whole.  Conversely, employment in the finance and business sector grew by 24%, faster than the UK (13%) for the period. At the same time, there was also a big increase in those employed in healthcare and social services (19% in Wales, 27% in the UK) over the period.

This is not to say, however, that the process is by any means complete. For example, despite the changes highlighted above, in 2010 health and social care still accounts for 15% in Wales, compared with 12.5% in the UK as a whole. Similarly, manufacturing is 10% of employment in Wales, and 8.2% in the UK, whilst the figures for finance and insurance (a narrower category than financial and business services) are 2.2% in Wales and 3.6% in the UK.

More broadly, however, the figures also indicate that the 10 year trend for manufacturing in the UK is broadly and strongly downwards, whilst in the financial and business services it is strongly in the opposite direction. The long term tide of economic history indicated by these statistics, therefore, means that for both the Welsh and UK economies there is likely to be work to be done in bolstering the manufacturing sector to prevent further decline, before the hoped for strong resurgence can be hope for.

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Plan B or Not Plan B

This week’s blog looks at the current fiscal situation for the UK government and asks whether it is now time for plan B and if so, what it should look like.

As the IMF have reported, the UK’s economic recovery has been more sluggish than was hoped for a year ago. Specifically, the needed change from public to private sector led growth has not yet materialized.

The IMF predict inflation will continue to come down to more “normal” levels. The same cannot be said, however, for unemployment or public sector borrowing and debt figures.

Consequently there are now serious doubts being raised as to whether the government’s debt reduction targets will be met. Indeed, there is the very real danger of a vicious circle being created.

This will occur if a lack of growth depresses tax revenues whilst simultaneously increases the costs of unemployment. This will then cause the public debt position to worsen still further, consequently requiring even more austerity, reducing likely future economic growth and threatening a further negative spiral for the economy.

In these circumstances it is unsurprising that many commentators and politicians have called for an alternative, growth-based, focus to move up the policy agenda. This is the so-called plan B alternative to the current austerity focus.

The problem is that whilst calls to ease the austerity measures in a bid to stimulate growth, have been made, the government has effectively put all of its eggs into the “monetary confidence” basket. They argue that the austerity measures cause the markets to have confidence in the UK, that this confidence allows the UK to enjoy very low interest rates, and low interest rates will stimulate private sector investment and ultimately growth.

Unfortunately this is currently not seemingly working, with the banks are reluctant to lend and companies finding it very difficult to access funds, negating the impact of the low interest rates. So far the quantitative easing of the Bank of England has had only a limited effect, hence the more recent policies to try and encourage the banks to lend more.

In the past, a Plan B would have involved increasing government spending on infrastructure, housing etc. As the multiplier effect on demand in the economy is relatively strong via the construction industry. The government is, however, unlikely to fund much if anything additional, though there are signs it is looking at supporting infrastructure projects through guarantee schemes.

The government is unlikely, therefor,e to move to a plan B for growth. Perhaps a Plan Ab is on the cards, with the government adjusting its activities to subtly put more emphasis on the growth side of the equation.

Ultimately the government is trying to generate more optimism in the economy in order to stimulate private sector growth. The problem is that it is also trying desperately not to actually spend government money on this, because of the very fiscal situation that is contributing to the growth problem.

Ultimately, Plan B will require the private sector to significantly pick up the reins of creating the growth in the cconomy, and this will place a heavy burden on the entrepreneurship and innovation of business in the UK. For the confidence required to return to the private sector in the UK, however, it will probably require coordinated action from the most important (G20) government and countries in the world economy, not just the UK.

In this increasingly interconnected and “globalised word economy”, that would, however, be the real signal that there is a Plan B for growth.

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It’s Only Just Begun

This week’s blog looks at the implications from the UK government’s Office for Budgetary Responsibility (OBR) report on the fiscal outlook for the UK into the late  2050s. In particular, we look at the choices government will be forced to make and the knock-on effect for the private sector.

Long term forecasts such as this are, of course, by their very nature subject to huge uncertainty and assumption, as indeed the OBR acknowledge. It also has to be said that the amount of fiscal consolidation required varies widely depending on whether you target a fiscal surplus or break even.

What is not in doubt, however, is that the issue of government debt and austerity is here to stay for the foreseeable future. Currently the recent economic crisis and its aftermath are focusing the government’s attention and it is likely that the impact of this will, even assuming that the government is successful in its debt reduction strategy, be seen in the levels of public debt for many years to come.

Over the last few years and indeed at present health and social care have been growing proportions of UK public spending. Given the current situation, areas such as defence and policing have come under strain as the government attempts to at least partially protect areas such as health from the funding squeeze.

On top of this, however, the OBR forecasts further highlight the twin effects of an ageing population in terms of increasing health and social care and reduced proportion of the population available to pay for this.

This also raises important questions for the future in terms of priorities. This will either require choices to be made between vital services such as health and education, or fundamentally rethinking of the role of the state in these vital services.

In reality, of course, both of these are likely to happen and indeed the recent changes to the UK government’s funding of  Higher Education illustrate this. The OBR’s forecasts therefore highlight the fundamental debate that the UK will have to have in the coming years over the balance between public and private sectors.

 The outcome of this will undoubtedly not be even across the UK and Wales is currently particularly vulnerable given its relatively higher reliance on the public sector. Whilst the focus may currently be on public sector spending, however, the reality is that this also reemphasises the long term importance of economic development policy, enterprise and innovation, if the economy is to generate the resources required to fund its vital public services.

The public resources available to support this activity, however, seem likely to be constrained over the medium to long term.  This makes it ever more important that approaches, such as city regions , are used to lever the greatest benefit from resources that can be accessed from a networked approach.

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Guest Blog: Enterprising Minds

This week’s blog is a guest feature from the Carnegie UK Trust. It focuses on their recently published report, Enterprising Minds.

Young people are being affected disproportionately by the economic crisis, but will be the engine of our economic future. Understanding the younger generation’s approach to work and business must be a top priority for policy makers, educators and others considering how to build economic recovery and enterprising opportunities.

On Monday 25th June 2012, the Carnegie UK Trust published Enterprising Minds , a ground breaking UK-wide study into student attitudes to enterprise, education and the future economy. The report focuses on how students view practical enterprise – starting a business or working self-employed – and the contribution education systems make to the understanding of these work types.

In total, more than 1600 students participated in Enterprising Minds through 17 different further education colleges across the whole of the UK. The resulting research provides a new and cross-jurisdictional picture of what 16-21 year olds think about working for themselves or starting up a new business.

With 45 questions and producing more than 70,000 question responses, it is one of the most comprehensive studies of its kind to have been undertaken in Europe and is believed to be unique in design and delivery in the UK. This work was conducted with the backing and advisory support of Colleges Wales, the Association of Colleges, Scotland’s Colleges, and Colleges Northern Ireland.

The information collected from the survey respondents suggests four principal research findings:

Enterprise in education has an impact

Across the UK, where students had been involved in enterprise activities at school or college, a substantial majority found them useful; those respondents who had been exposed to enterprise education in and around their courses were clearly more likely to think in enterprising ways about their own futures, and be comfortable about business startup.

Celebrity and role models matter

Most students visualised ‘enterprise’ in a media-created way, like a celebrity tycoon or TV show; and many students expressed an eagerness to have more interactions with real, successful business leaders during their time at college.

 A changing economy is confusing

Despite being aware of the economic difficulties facing them, respondents remained optimistic about their own prospects for achievement in work; yet a majority maintained very traditional, single employer expectations of the post-college labour market.

Attitudes vary between jurisdictions

There are significant variations across the United Kingdom in student attitudes to business, awareness about enterprise, and exposure to different intensities and contexts of enterprise education; and these clearly affected overall attitudes to startup.

The survey results demonstrate that college students in Wales are more interested in enterprise and self-employment than their contemporaries anywhere else in the UK. Almost 30% of Welsh students want to start their own business once they have finished their studies, compared to the UK average of 24% and just 20% in England.

Welsh students were also the most confident that their schools and colleges had taken action to include enterprise learning in their education. Welsh students are the most satisfied in the UK when it comes to the support they receive from their colleges, with 53% agreeing that their college encourages them to think more about enterprise, compared to 37% UK-wide.

Colleges in Wales are at the forefront of enterprise education, which comes through in the number of young people who told us they feel inspired to be successful entrepreneurs. The research shows that meeting successful business leaders and entrepreneurs from their own communities encourages and inspires students to think in more enterprising and creative ways – and that Welsh colleges have been particularly successful in providing this kind of support.

The Trust will be making seven recommendations as part of its research report, both for the college sector and for trusts and foundations wishing to support enterprise development in the UK.  

Some key recommendations of the study include:

  • Colleges and supporting organisations should create more opportunities to develop practical enterprise skills that build on students’ retail, voluntary and extracurricular experience.
  • Schools, colleges and universities should collaborate more closely to unify and strengthen their approaches to enterprise learning, and ensure students’ enterprise awareness is reinforced at each level rather than weakened.
  • Carnegie UK and other nongovernmental lead organisations should be helping the educational sector by improving enterprise education measurement, supporting educators to make informed decisions about enterprise education.
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Lies, Damned Lies, and Statistics?

This week’s blog looks at the recent data concerning Welsh exports and asks to what extent this indicates that the Welsh economy has become more export oriented and focused on the faster growing markets of the World economy.

Previous Centre for Enterprise blogs have discussed the need for the Welsh economy to become more export oriented, given the current UK economic situation and the government’s fiscal austerity policies. The need to look beyond the EU for markets, especially given the Euro currency crisis has also been highlighted.

The recent news concerning Wales’s export performance is therefore heartening. It does, however, depend on which sets of figures you choose to focus on.

On the postive side, Wales’s exports in the first quarter were up marginally, whilst they fell in the other nations of the UK. Indeed, since 1999 Wales’s exports have more than doubled, a much greater increase than the UK average of 71%.

Also, Wales was one of the few parts of the UK that has a trade surplus with the rest of the (non UK) world, exports exceeding imports. Also encouraging is the fact that nearly 60% of Wales’s exports now go to markets outside the EU, indicating a more diversified market focus.

Whilst the EU markets of Ireland, Germany, and the Netherlands remain important, the USA now takes 25% of Welsh exports and the United Arab Emirates has also become important. All of this would, therefore, suggest a postive outlook for Welsh exports.

On the negative side, however, over the last year Wales has seen a smaller rise in exports than the UK as a whole. Possibly related to this, is a perceived lack of focus on the fastest growing markets of the world and a continuing reliance on a relatively small number of products.

For example, whilst Welsh exports to Brazil have seen a  marked increase in the past year, the calls continue for a greater focus on the largest and fastest growing markets of China and India. In addition, Wales’s exports are  concentrated in only four industries namely energy, engineering, metals and chemicals.

Whilst these sectors are forecast to continue to grow in the next few years, in Wales the exports from theses industries are also dominated by a small number of large companies, particularly Tata, Airbus and Dow Corning. Whilst the latest statistics are therefore, on the whole, good news for the Welsh economy, the need to diversify the export base in terms of markets and number sof firms is still of paramount importance.

For this reason the fact that the number of exporting firms rose by a greater percentage in the last year in Wales  than any other part of the UK is encouraging. In addition, the First Minister’s trade missions to India and China as well as the USA highlight at least a realisation of the issues that face Welsh exporters.

 The diversification of Wales’s exports in terms of products (with sectors such as mobile computing and communications highlighted as an area of potential) is also, however, of vital importance. In addition, the need to link innovation (both firm specific and linked to other stakeholders such as universities), supply chain, and SME export promotion policy strategies to generate a widening of both the product and firm export base will continue to grow over the next few years.

In conclusion, therefore, whilst there are encouraging signs from the broad statistics, there continues to be a need to focus on this vital area of economic development policy.

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Always Look On The Bright Side of Life?

This week, as the concerns over the Eurozone continue, the blog looks at what signs there are of a concerted strategy at the UK and Wales levels.

 As uncertainties over the future of the Eurozone persist, some are making comparisons with the last days of the Roman Empire! Interestingly, it has been claimed that it was in Wales that the influence of Rome continued for longest and that even up until 1282 (with the fall of Gwynedd) this could still be seen.

More importantly for the present day situation, history also shows that the societies and economies that recover quickest are those that are the most adaptable, but also those with the strongest sense of identity and history. If this is the case, how does Wales and the UK measure up?

Well, in terms of adaptability, entrepreneurship would seem to be a good measure. In terms of support for this, the evidence is, however, mixed.

On the one hand David Cameron has just announced a fund to support young entrepreneurs. On the other hand the perceived  lack of government action in assisting small business has also been criticised.

In Wales, one of the main discussions that may facilitate increased innovation, entrepreneurship and economic development more generally is the city region concept. Key current points of discussion highlighted, however, revolve around historic rivalries within Wales between her main cities, as well as those between North and South, and East and West.

It would be ironic, especially given the earlier discussion of economic resilience, if the very sense of local identity and history that exists in Wales reduced the potential benefits of the city-region concept. Clearly resolving these issues will be an important test for the Welsh government in the coming months.

So, returning to the historical comparisons made at the beginning of the blog,  the united nature of Europe was something first effectively created by Rome. This, however, is looking increasingly fragile at least in its monetary union aspects.

If we ask what the Romans can do for us now, that could help in the current situation, then some would ask for an injection on the demand side into infrastructure creation, particularly roads, perhaps more so than irrigation and the aquaduct! In addition, however, it is even more important to remember the words at the end of Monty Python’s film “The Life of Brian” and look on the bright side of life!

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