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.