LOW CARBON ENTREPRENEURS AND THE NORTH WALES ECONOMY

Last week, a fascinating report landed in my email inbox.

Published by the Carbon Trust and Shell UK, “Low Carbon Entrepreneurs: the new engines for growth” looks at the critical role that small and medium sized enterprises (SMEs) can play in the low carbon sector. This includes both nuclear and renewable power, transport and activities within various manufacturing and services industries that essentially contribute, either directly or indirectly, towards reducing environmental impacts or adapting to environmental changes.

Whilst some may believe that it is still a relatively small industry, it was one of the few sectors to grow during the recent recession and it is estimated that such green business accounted for over a third of the economic growth in 2011/12. Indeed, the low carbon economy is estimated to be worth over £120 billion to the UK and currently employs 940,000 people.

And the good news is that the market is set to grow, driven by small dynamic companies that are focused on international opportunities. For example, a survey from the report shows that almost forty percent of low carbon SMEs are already exporting despite the fact that the majority have a turnover of less than a half a million pounds. Given that the global low carbon industry is forecast to be worth £4 trillion by 2015, this is certainly a sector that demands further support in its development.

Yet, when we look at the five main locations for the growth of low carbon SMEs in recent years, the report shows that the most successful areas have been London, Cambridge, Oxford, West Yorkshire and Hampshire.This must be enormously disappointing, but something of a challenge, for North Wales, where Anglesey has not only been branded as the ‘energy island’ as a result of potential investments into nuclear and wind power but, more importantly, has recently been given enterprise zone status by the Welsh Government to drive forward this sector. In addition, the status of Bangor University as having one of the highest concentrations of environmental science students in the UK means that there is a local skill base already available for businesses in the sector.

However, all is not lost. According to the report, the most common reasons for a low carbon SME’s current location were access to talented people and support from the local innovation network, both of which could be developed locally if the new Science Park touted for the Menai area focuses specifically on energy and low carbon sectors. More importantly, two thirds of low carbon firms would move location if there was regional funding available to help the business. This is certainly a vital lesson for those who are putting together the financial ‘offering’ that the Anglesey Enterprise Zone will have in order to attract businesses to the island in the future.

But there are also opportunities to develop new dynamic businesses in the region. A survey of participants in the Shell Livewire programme, the biggest online community for young entrepreneurs aged 16-30, shows that almost a third say they would like to start a new low carbon business or get involved in the low carbon economy but don’t know how to go about doing it.

Given this, there is certainly a real chance for North Wales to focus its efforts on helping young people within the region to get into the low carbon economy and to help build up a cluster of businesses in this sector. Therefore, whilst North Wales has been slow in getting into this growing sector, it does have several competitive advantages that, if managed properly, could see the region emerging as one of the main low carbon areas of the UK during the next five years and creating hundreds, if not thousands, of highly paid skilled jobs in the local economy.

WELSH LAMB, ASDA AND JOB THREATS AT WELSH COUNTRY FOODS

On Friday, the news broke that 350 jobs were at risk at Welsh Country Foods on Anglesey. This follows a decision by Asda, its major customer, to use another supplier for its lamb.

With the supermarket chain accounting for half of the business at the Gaerwen site, this means that Vion, the owner of the business, has no option but to place its workers on redundancy notice.

The response from Asda was typically vague, suggesting the decision had been taken because of the changing needs of customers, but that they ‘remain committed to sourcing lamb from Wales”.

This commitment to local sourcing would probably be questioned by Scottish farmers, who recently found through a ‘secret shopper’ survey that Asda and its main rival Tesco still give significant shelf space to imported lamb during the peak season in the UK.

Yet, only fifteen years ago, Asda made the momentous decision to cancel all orders for New Zealand lamb to support the UK’s sheep industry, citing the quality of British meat as a key factor.

Where has this commitment gone since then?

Indeed, farmers and consumers alike will wonder why Asda, on its website, is promoting New Zealand lamb under the heading “What Makes Butchers Selection New Zealand Lamb So Good?” when there is no similar advertising campaign for either British or Welsh lamb.

Remember, this is a supermarket that has been given planning permission to build superstores across North Wales with the expectation from councillors that it would try and source locally where possible.

Certainly, if the Gaerwen plant shuts down, where will the twelve Asda stores in North Wales be getting their lamb from? Not from local suppliers if the planned closure goes ahead.

But if Asda cannot be persuaded to buy lamb to keep the plant open, then there must be due consideration as to whether it requires government support as a vital strategic site for farming in North Wales.

As the only major abattoir in the region with over 640,000 lambs are processed annually through the site, its closure would have a significant impact on both the farming and food industry locally as facilities such as slaughtering, boning and retail packaging, all of which add value to the final product, would disappear.

Of course, some would say that this is merely market forces in operation and that if there is not enough demand for Welsh lamb, then why keep the plant open?

That would be short sighted in the extreme. Only last year, the UK became a net exporter of lamb for the first time in 17 years, selling 98,500 tonnes overseas, with France, Ireland and Germany showing strong growth in demand.

Not only that, estimates from the World Bank show that demand for meat production will increase by 80 per cent between 2000 and 2030 mainly due to rising meat consumption in Asia, giving North Wales farmers further potential for exports but only if they have the right plant in place to process their meat.

The fact that, despite this strong growth in overseas sales, the UK still imports over 88,000 tonnes of lamb means that there are also opportunities to sell to British markets, if only some buyers would reconsider their purchasing strategies.

Perhaps Asda, owned by the American giant Wal-Mart, believes that people no longer care about where they buy their products from as long as it is cheap.

But I believe that we in Wales have an enormous pride in our country and what we produce.

And when our farming industry is under threat because of some vague explanation regarding the decision to buy its lamb elsewhere, then hopefully customers across Wales will vote with their feet and buy from those supermarkets and butchers that are proud of having Welsh meat on their shelves.

DONE PROPERLY, NEW SCIENCE PARK COULD MAKE A REAL DIFFERENCE TO NORTH WALES ECONOMY

Due to its failure to win a majority at the last Assembly election, the current Welsh Government has to make a deal, around this time every year, with one of the other parties in order to pass its budget.

This time, Labour has agreed a compromise with Plaid Cymru which, in exchange for passing its financial plans, will result in thousands of additional apprenticeships and a new science park involving Bangor and Aberystwyth universities.

Given the way that the new Secretary of State for Wales has hit the ground running with his announcements on Wylfa and rail electrification in North Wales, it is not surprising that Plaid has made an effort to demonstrate that the region remains important to them electorally.

Indeed, the unexpected announcement that £10 million of capital funding is to be committed to the science park has enormous potential for the economic development of the region if managed properly.

Of course, there have already been earlier attempts to connect both universities with the business community through the Technium programme that, to be blunt, failed badly.

Both the CAST building on Parc Menai and Aberystwyth Technium, which cost the Welsh taxpayer over £30million to build and operate, were closed down by Ieuan Wyn Jones when economic development minister, having generated considerable debts and having had very little impact on the local economy.

Despite this, I think that the new science park can work if its leadership and location are prioritised.
First of all, it is fortuitous that Bangor has a Vice Chancellor with an excellent record in linking industry and academia from his time in Ireland. Certainly, if he takes the lead on this project and drives it forward, then the chances of success are increased considerably.

The second issue is that of location, which may be slightly trickier. Indeed, some may argue that a largely rural area such as North West Wales is the wrong place for a successful science park.

However, my own experience of working with colleagues at Linkoping in Sweden disproves that theory.

With only 105,000 inhabitants, this former market town currently has the largest science park in Northern Europe, being the base for 250 firms employing more than 6,000 people, with the majority of those generated from the local university.

But the real question is where will this new science park be located, given that Aberystwyth and Bangor universities are eighty seven miles apart?

In my opinion, it is unlikely to be based around Aberystwyth so will it be based around Bangor itself building on current developments such as Parc Menai?

Alternatively, will Lord Elis Thomas use his considerable powers of persuasion to get his University, and his Plaid colleagues, to put it into Trawsfynydd which is diplomatically half way between Bangor and Aberystwyth but which also has the added attraction of recently being granted enterprise zone status?

However, in my opinion, there is only one viable location that will make this project a success.
The recent announcement that a new power station at Wylfa B is likely to go ahead gives Anglesey a once in a lifetime opportunity to maximise the economic benefits for the region.

If the ‘energy island’ also had a science park, then it could become one of main centres for sustainable energy in Europe, attracting companies in the sector to the region, creating hundreds of well-paid jobs and taking real advantage of the academic expertise within the local university sector.

I am also convinced that this development could attract considerable additional funding from the science and technology budget of the UK Government.

Hopefully, such joined up thinking in taking advantage of a major infrastructure and energy project could, and should, add real value to the local economy and ensure that North West Wales has a bright economic future.