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.

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.