A TALE OF TWO BRIDGES? CREATING A SEVERNSIDE ECONOMIC REGION

Last month, I left the University of Wales after five years to take up a new chair in entrepreneurship and strategy at Bristol Business School.

It will be a fascinating challenge but not one that means that I will be leaving the world of business and enterprise in Wales.

I will remain as a business columnist for the Western Mail and its sister paper in North Wales, the Daily Post.

The Wales Fast Growth 50 – which is in its fifteenth year – goes from strength to strength and we have a full house for the award ceremony in October. I am also continuing to work closely with the Welsh Government to complete the second part of the access to finance review by the end of the year.

More importantly, of course, I will still be living in Wales and spending my income in the restaurants and pubs of Cardiff!

In fact, having been employed within the Welsh university sector since 1996 when I returned from Ireland to take up my first chair at the University of Glamorgan, a number of friends in the academic and business world have said that taking a post outside of Wales would actually be good for me and my perspective on the Welsh economy.

More importantly, the welcome I have had from new colleagues in Bristol has been second to none and I look forward to working with them closely to develop the potential of the business school in research, teaching and links with local business. However, the one challenge that I am more than willing to take on is that of examining how the two economies of South East Wales and the West of England can work more closely together as a coherent economic region in the future.

Whilst some would say (and excuse the pun) that trying to get these two regions to work together is a bridge too far, that has not been the case elsewhere in Europe.

Take the new economic area that has been formed between Malmo in Sweden and Copenhagen in Denmark following the construction of the five mile long Øresund bridge. This is now seen as being as a model for other transnational co-operation with new cross-border entities being formed to serve the entire region.

For example, local, regional and national authorities from both countries have cooperated in a regional policy forum called the Øresund Committee for the last twenty years whilst a consortium of twelve universities has been established which has opened up all their facilities to students, teachers and researchers from both sides of the bridge. In fact, the region markets itself as being focused on education and research and therefore being a hub for high-technology companies in areas such as pharmaceuticals, telecommunications, food, environment, logistics and design.

The Scandinavians are far more enlightened than other parts of Europe when it come to pragmatic collaboration, but could it be possible for South Wales and the West of England to put aside historical differences and work more closely to create a larger economic region that could be a real driver for both sides of the Severn over the next decade?

The way that politicians and policymakers on both sides of the bridge lobbied as one group for the electrification of the Great Western line is a perfect example of working together for a common cause.

More importantly, there are similar strengths industrially in both regions that, through co-operation, could create world-class clusters in areas such as creative industries, aerospace and life sciences. And there have already been positive steps in getting academia to work more closely together, with the Universities of Bath, Bristol, Cardiff and Exeter announcing a formal collaboration to bringing together a high concentration of research expertise and capability in the South West of England and Wales.

Yes, there would be concerns that the more prosperous Bristol would overshadow Cardiff and Newport, but the same debate has been true in recent years over the relationship between the South Wales Valleys and the capital city. In fact, it would show a far more confident and politically mature approach if Wales could examine how it can co-operate with other parts of the UK fourteen years after devolution.

So is there a case that can be made for a Severnside economic region of 2.5 million residents that can become a major powerhouse in the UK economy, especially at a time when the UK Government is looking to support economic divergence away from the economy of London and South East England?

Certainly, it is something that will be worth exploring during the next few months in the hope that the sum of the parts could be even greater than the whole and benefit the two regions on both sides of the Severn.

NORTH WALES AND CITY-REGIONS

Last week, the major announcement from the Welsh Government concerned the report of a special taskforce that had been commissioned into looking into the potential of city regions as drivers for economic growth.

Essentially, city regions are exactly what they say on the tin – they are those areas surrounding a major urban location that, as academic research has shown, are major drivers of economic growth and employment.

Normally, they consist of areas that collectively have a minimum population of 500,000 residents, thus creating the critical mass needed for economic growth and enables policies on issues such as transportation to be effectively utilised towards maximising the potential of the city region. Given Wales’ demographics and geography, it is not surprising that the Task Force recommended that only two city regions should be created.

The first, with a population of 1.4 million would be in South East Wales and centred on Cardiff and taking in Newport, Bridgend and the Valleys. The second, to be known as Swansea Bay and with almost 700,000 residents, would consist of Swansea, Neath, Port Talbot, Llanelli and Carmarthen. In my opinion, such developments are long overdue and if this signals the beginning of the end of tribalism and parochialism within our industrialised areas, then it can only be good for the Welsh economy as a whole.

But what implications will this have for North Wales? The task force was also asked to look at whether there was scope for a city-region based on Wrexham and Flintshire, especially given the importance of manufacturing within the region through companies such as Airbus and Toyota and the recent announcement of an enterprise zone on Deeside.

Unfortunately, it recommended that even if this city-region was extended across the border into Cheshire, it did not have the necessary population to guarantee success. Instead, it suggested that the Mersey Dee Alliance, which has been critical in building cross-border links, should become a regional strategic body with powers for economic development, although this would mean that the Welsh and UK Governments should consider giving this body the additional powers to enable it to undertake successful interventions in the local economy.

I am sure that many in North Wales will be disappointed that, yet again, the impression given is that the focus of the Welsh Government has been on South Wales and that the task force did not consider, even within its specific remit, ways in which the rest of Wales, especially the rural areas, could benefit from having a more joined up approach to economic development.

Perhaps that is something for the Welsh Government to consider in the future because, as we have seen recently with the furore over milk prices, there remains a fragility within many parts of the rural economy that needs to be addressed urgently. However, I am heartened by the fact that the North Wales Economic Forum is already ahead of the game when it comes to collaboration on economic matters between public bodies.

Only last month, it announced the creation of the Economic Ambition Board, a partnership between the six local authorities that has the aim of attracting inward investment and boosting job growth across the region. It may not have the title of a city region but this development certainly has the potential to make as much of a difference if real collaboration can take place between the councils involved.

I would hope that the Welsh Government considers carefully the level of resources it will direct, from its own coffers and European funding towards the two city regions in South Wales. At the very least, North Wales politicians and policymakers will need to make a strong case that the region gets an equitable amount towards its own economic plans for the future.

WILL WE SEE A RISE OF THE CREATIVE CLASS IN WALES?

The American academic Richard Florida, whose work should be compulsory reading for every economic policymaker in Wales, stated in his seminal book “The Rise of the Creative Class” that “access to talented and creative people is to modern business what access to coal and iron ore was to steel-making.”

Given this, you have to wonder why politicians and policymakers are not doing more to encourage greater creativity in the economy. Indeed, that was the subject of research released last week by the software company Adobe.

The “State of Create” report was commissioned not only to get a handle on how important creativity is to the UK economy but, more importantly, how its affects people in their everyday lives.

The main finding is that whilst a high percentage of people in the UK agree that creativity is the key to driving economic growth, we are not living up to our creative potential as a nation i.e. 63 per cent of adults consider themselves to be someone who is creative but only a third feel they are living up to this potential. And what are the main reasons for this perception? 


Four out of five believe that there is an increased pressure in work on being productive rather than creative. In addition, risk aversion is seen as a barrier with ‘playing it safe’ being the strategy usually adopted by organisations which results in those who are innovative and entrepreneurial having their ideas stifled by those who are less creative. They also feel that there was a lack of time to create new things and that they cannot afford to be creative. Indeed, a third of adults wanted more time in the workplace to think creatively and to be trained to use different creativity tools. 

And for those companies that have encouraged such thinking, there has been commercial payback. Take, for example, the policy of internet giant Google which lets its employees spend one day each work week focusing on their own projects and which has resulted in creating half of the company's new products and services. 


Nearly two thirds of the respondents also believed that creativity was being stifled by the UK education system and whilst young people are seen to be more creative than those over the age of 35, they need to be given the opportunity to develop creative skills even within a formal educational environment, especially through greater use of social media tools. Several prominent commentators have supported this view on the limitations that education places on the encouragement of creativity. 


For example, the educationalist Sir Ken Robinson, in his now famous 2007 TED lecture, pointed out the many ways in which our schools fail to recognise, much less cultivate, the talents of many brilliant people, arguing that “We are educating people out of their creativity."





A more recent article by Richard Florida also raised similar concerns. Arguing that the current system of primary and secondary education remains an obsolete 19th Century model that was created to churn out workers for factories, he proposed that we need to pay much more attention to early childhood learning as these are the most critical years when creative abilities are shaped. Indeed, it raises an important issue regarding the debate over whether rote learning and test preparation is stifling the future creativity of our young people. 


But it is not only education that it critical to encouraging greater creativity in the economy. Florida also argues that it is cities that are the main economic and social organising units of the so-called Creative Age, as they “speed the metabolism of daily life, accelerating the combinations and recombinations of people that spur innovation, business formation, job creation, and economic growth”. 


Such a view is timely, given that a Welsh Government taskforce this week proposed the creation of two large city-regions centred on Cardiff and Swansea, a development that could, if managed properly, potentially encourage a greater level of creativity in Wales that could make a real difference to our economy. 


Certainly, this new economic approach should ensure a more joined-up approach to sub-regional economic development. However, if it is to succeed, then such a strategy must not only focus on infrastructure developments alone but on ensuring that enterprise, innovation and, most important of all, creativity, are the key drivers that can reboot the Welsh economy over the next decade and beyond.