This week, Sir Roger Jones, serial entrepreneur and former chairman of the Welsh Development Agency (WDA), made an impassioned plea for the return of an independent body similar to the WDA which would be controlled by a private sector board with strong trade union representation.
Responding to the House of Commons Select Committee on Welsh Affairs, Sir Roger's evidence focused predominantly on the fall in inward investment since the WDA was finally closed as part of the Bonfire of the Quangos back in 2006.
Yet whilst the attraction of foreign direct investment was the main role of the agency in the 1980s and 1990s, it is easy to forget the revolutionary role that it played in developing the World's first regional enterprise strategy, the Entrepreneurship Action Plan for Wales.
One of the first calls for the development of a ‘regional enterprise strategy’ came in a paper I wrote whilst a Professor at the University of Glamorgan which, on examining the enterprise policies of local authorities in Wales, called for a co-ordinated regional approach to end confusion regarding the development of support for Welsh entrepreneurs and small businesses.
A year later, an economic policy document published by the then Welsh Office proposed the development of such an initiative, to be taken forward by the WDA which had, during the preceding years, concentrated its efforts on securing inward investment as the panacea for Wales’ economic ills.
As the economic strategy document - Pathways to Prosperity - stated at the time, ‘It will be important to ensure that existing initiatives to support new businesses and related action to promote entrepreneurship are brought together under a clear, integrated programme of activity. We will therefore establish a new Entrepreneurship Action Plan for Wales.’
In 1999, the private sector led Entrepreneurship Action Plan (EAP) was launched as the first regional enterprise strategy of its kind in the World. Whilst managed by the Welsh Development Agency (WDA), it fully involved businesses, universities and voluntary bodies in its design and implementation.
Its success is clearly demonstrated by the fact that, between the period 2002 and 2004, the number of new enterprise births in Wales went up from 8,970 to 11,525, an increase of 28 per cent.
Unfortunately, when the WDA fell in 2006, so did the EAP. And the result? During the period 2004-2009, Wales experienced a 28 per cent decrease in the number of new businesses being created in Wales, reversing all the tremendous success of the previous three years.
I remember very well the last meeting of the implementation plan, when civil servants refused point blank to allow the EAP to continue, with the end of the WDA conveniently used as an excuse to get rid of what was undoubtedly one of the main policy successes of the first years of the Assembly Government. Indeed, since the abolition of the EAP, there has been a steady decline in the focus of government policy on entrepreneurship and its importance in revitalising the Welsh economy.
The good news is that the EAP looks set to make a comeback. Unfortunately, this will not be in Wales but in Scotland, where five enterprise organisations have formally requested that the Scottish Government establishes a similar national entrepreneurship strategy to the EAP so that the economy can be revitalised. In contrast, the worry for Wales is that the current government seems set to focus much of its effort over the next five years on the development of so-called large anchor companies, with entrepreneurship being a poor second.
The twin engines of the Welsh economy are large firms and entrepreneurs. Unfortunately, if one of those engines malfunctions or is not given the right amount of fuel, then the economy will simply go round in circles and eventually run out of steam. This is what the WDA recognised back at the end of the 1990s - that a strong inward investment strategy needed to be balanced by a strategy that encouraged entrepreneurship and indigenous business growth.
And only this week, the latest Manpower Employment Outlook Survey indicated, as many of us have predicted, that it is the small firm sector that is leading job creation as we emerge out of recession in the UK. Yet the focus of the current government, driven by the influence of the CBI, seems to be on larger companies whereas growing economies elsewhere are seeking new ways to encourage greater entrepreneurship.
After over 20 years as an entrepreneurship academic, I still believe that if government, businesses and universities work closely together, we can still develop a real renaissance in entrepreneurial activity in Wales. The Entrepreneurship Action Plan was a real and successful attempt to do this until it was stopped by policymakers who put the short term imperatives of Assembly politicians ahead of the economy of our nation.
Certainly, if it is good enough for Scotland, and other countries, to consider adopting a Welsh policy success, then there is no reason as to why Wales cannot also do the same and bring back a strategy that will revitalise and reinvigorate entrepreneurship, and the economy, in Wales.
