An Article written by Suzy Davies AM:

A Welsh Assembly Committee has been looking at automation and artificial intelligence.

It pointed out that 65% of today’s primary school children will be doing jobs which haven’t been invented yet. It said that Wales should be the providers not just the consumer of emerging technologies; semi conductors is the go-to example on this. It said we should look beyond our shores for expertise.

That Welsh Government needs to be told this is astonishing. The Auditor General has said that public services are stuck in a rut of Welsh Labour’s making and now the velvet is starting to wear thin on the Assembly’s own gloves when it comes to the economy.

Unemployment is down but productivity remains comparatively low in Wales. The relationship between the private sector and government is particularly poor in Wales. The private sector has generally given up on being part of anything strategic and just gets on with their own thing; frequently plateauing or selling up/being taken over. While large scale inward investment is welcome, it comes with a risk to community resilience when a big company moves or fails. Even if they stay, usually after a large incentive, you can end up with Amazon who bring no added value to the surrounding community.

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It begins with a business-friendly Welsh voice at the UK table when we get powers back from Brussels, important for agriculture particularly but also to make sure that the new Prosperity Fund is distributed with the private sector in mind. Businesses are investors in people and a mutual relationship between wealth creator and community is what makes both more resilient.

Relationships are still the key to long lasting trade deals. Welsh Government should have been looking at our SME offer and scoping markets ready for March 2019, tariffs or no tariffs. That includes testing challenges to well-established relationships in demand-led markets in some EU countries which both parties want to survive, tariffs or no tariffs. They haven’t. There’s a lot of catching up to do

At home though, here are just five ideas to show entrepreneurs why they’re more than welcome in Wales:

First of all, let’s start using the word “private” and “health” in the same sentence together without the usual Godwin’s law-style frenzy. I’m not talking about privatising the NHS. I’m talking about innovation in tech which can bring efficiency and certainty to clinicians and patients. Why would the innovators think of monetising their ideas here, as we hope they will with the Swansea Bay City Deal, when the backgrounds noise is that health and private enterprise can never be compatible?

 

As it happens, I don’t think that citizens shouldn’t be kept on waiting list solely on the grounds of dogma – but the NHS already quietly buys services from the private sector. As local authorities often buy their social care services. As well as encouraging personal responsibility in preparing for our rainy day, we need the private sector to help meet demand for our services.

You’re not welcome if you want to supply a dud service which just thinks of its shareholders, but this cartoon characterisation of the private sector doesn’t reflect Wales’s responsible SME culture or the fact that private enterprise includes mutuals and not-for-distributable-profit organisations.

Or partnerships, which carry a lot of personal risk. So, secondly, a drop in the basic rate of income tax doesn’t just benefit us as individuals, but small trading partnerships as well. That’s money to plough back into the business. Maybe enough to make them think of taking on an apprentice or investing in new tech. Or even making the tech.

Welsh Government can do that. Why doesn’t it? Why do I think they’re looking to use the new powers to raise taxes? Was it because they even floated the idea of a tourism tax when the big challenge here is to persuade some of our small business to recognise they’re part of a bigger visitor economy in the first place.

Thirdly, Welsh Conservative ideas on non-domestic rates (NDR) exemptions and a varied multiplier are already out there, as is the policy to change the local authority funding formula . What about greater retention by local authorities of NDR for use in exchange for part-funding localised/regionalised private sector led economic development plans which lie beneath the Growth/City deals, which can be more attuned to local need (including language) and existing capacity.

I’m reserving judgment on a 21st century Welsh Development Agency as I want to see what the Growth/City Deals do first, establish that they are outward looking. The fact that the private sector is not well represented on the boards at the moment makes me less confident than I might be.

Fourthly, infrastructure, especially digital connectivity. We’re looking at 5G now, yet still have properties on industrial estates with poor broadband, let alone difficult to reach areas. Let’s swiftly move on from Openreach and support satellite and new tech to provide this especially where this can be developed in or attracted to a base in Wales. As regards transport infrastructure, let’s accept that freight – manufactured and agri goods – still need logistics and road/rail, and that people will still want to move from place to place. There are a slew of examples across Wales to call upon but let‘s not overlook our value as a land bridge between Ireland and rest of EU in the process.

Finally, where are our risk takers? The US and Israel have this right. Failing is part of the route to success – as long as it’s not too often. “Entrepreneurship” on the school curriculum tends to be a tick box story rather than a mainstream philosophy about the application of ideas. It’s not all about “How To Be a Top Capitalist” but about how to use and capitalise on creativity, ideas, courage. These will be needed to find and create markets?

Basic business should be taught as part of every vocational “college” subject; basic application/innovation questions in every science and maths class; what do you learn about human nature in every language/humanities class; how do you capture drive? How do you communicate effectively? Even in a digital world, it’s human contact that creates mutual reassurance and still solves problems. The human voice remains an important instrument of commerce

If we’re looking at policy, there’s work to be done on getting businesses to understand that they’re part of a bigger picture with socio-economic consequences – and that there’s a responsibility to participate; not just for “the greater good” but because there’s direct economic advantage for them:

Going into schools and colleges, helping design and deliver the curriculum; being on boards of governors; giving work experience, helping children see the practical application of the skills they’re learning; allowing them to see that you can come from humble beginnings with poor qualifications (to start with) and still succeed if you have drive and focus; demonstrating that better gender balance, as well as a better mix of socio-economic experience in leadership teams lead to better-informed decision making and, hopefully, leads to less financial dependency on one source of income within families. This is about your future workforce and ambitious communities.

It needs constant input of this nature to build communities who want to achieve something, be attractive places to live, to set up new business etc. How many CEOs overlook Wales because they don’t want to live here themselves, where they have no confidence in the schools, where they don’t think they’ll meet anyone “like them”?

The question for policy – how to incentivise all that? Culture change isn’t easy and this is more cultural than financial. Short answer – stop excluding (demonising even) the private sector. That relationship with government needs fixing quickly.