How has devolution affected Welsh entrepreneurship? | Daniel Roberts

How has devolution affected Welsh entrepreneurship? | Daniel Roberts

Throughout the 20th and 21st centuries there has been specific government intervention into a distinct Welsh economy, but its development continues to be one of the principle issues facing our country. Since 1999 Wales has, for the first time, had a devolved government co-ordinating this intervention, and it is vital that we assess and understand the underlying economic principles that have, thus far, been guiding Welsh economic thought. Leon Gooberman, in the first and comprehensive analysis of government intervention into the Welsh economy, concluded that one of the foremost issues we have is a lack of endogenous entrepreneurship.[1] I want to assess how that is reflected in the policies of the Welsh Government since devolution.

As suggested by Professor Dylan Jones-Evans, the Government’s strategy towards entrepreneurship has meandered since 1999 – and so have Wales’ relative entrepreneurship rates in comparison to the rest of the UK. The number of start-ups created in Wales during the period 2002–2005 increased by 21% as compared to 13% for the UK, but this wasn’t replicated between 2005 and 2011, when the UK saw a 6% fall in new businesses while Wales saw a fall of 30%.[2] Of course, this period was one defined by an international economic recession; but it is essential that we as a nation learn from our past, assess the effectiveness of our policy and are able to adapt for the future.

The differing attitudes coming from Cardiff Bay are there for all to see. The opening sentence of the Welsh Government’s 2004 Youth Entrepreneurship Strategy Document was “Entrepreneurship is central to the Welsh Assembly Government’s vision for the future”. Entrepreneurship is of course still often used as a buzzword in politics, and encouraging it is always seen to be an aim of a Government of any stripes. However, the Chief Economist of the Welsh Government cited in his 2016 article for the Welsh Economic Review a piece of research from the OECD that suggested that there was at best incomplete evidence of the importance of entrepreneurship, among other factors, at a regional level of economic development.[3] These differences lead to many important questions needing to be asked – what is the role of entrepreneurship in the economy the Welsh Government has been, and is, trying to build?

As we assess the first 20 years of devolution, I believe it is vital we discover what the underpinning economic philosophies and ambitions have been of those who are gaining more and more responsibility for the Welsh economy. Then we can evaluate whether the policies implemented have been successful in achieving these ambitions, and if not, what needs to be done differently. Entrepreneurship is just one factor in economic development, but it has links to many aspects of Welsh life, from its ability to create new Welsh-language jobs, to give the chance to Welsh graduates to implement and develop their skills in this country, and to ensure that we are at the cutting-edge of innovation and technological developments.

Wales has a unique opportunity as a peripheral, post-industrial nation with a young devolved government to lead the way with innovative ideas to transform our economy. There is nothing stopping Wales being a key point of reference for other nations and regions wanting to change their economies in the same way. The development of a unique historiography focusing on the development of Welsh economic principles will be key to ensuring this becomes reality. In my research, I will be asking fundamental questions about current and historic policy;

1. What type of economy has the Welsh Government been trying to build since devolution?
2. Where does entrepreneurship fit into it?
3. If Wales was to see a sudden rise in entrepreneurship, would that always be a positive thing?
4. What is the role of the government in encouraging entrepreneurship – especially at a sub-state level?

Answering these sorts of questions will be vital in successfully responding to the challenge of transforming the Welsh economy and turning Wales into a prosperous, positive example to others.

About the Author

Daniel Roberts works as a Research and Projects Officer for Gorwel, the Welsh Foundation for Innovation in Public Affairs. He is excited to contribute to the economic debate in Wales, helping to ensure that we maximise our potential and develop an economy that ends poverty in our country and gives everybody living here the chance to flourish and contribute to our society. Alongside this work, he is a PhD student at Swansea University, looking at the role of entrepreneurship in the Welsh economy, analysing and evaluating Welsh Government policy in the era of devolution.

If you would like to learn more about Gorwel’s work, attend any of their upcoming events or you are an academic/practitioner who would like to discuss our work – feel free to get in touch via droberts@gorwel.co.

 

[1] Gooberman, Leo., From Depression to Devolution: Economy and Government in Wales, 1934-2006. University of Wales Press, 2017, p. 223

[2] http://www.walesonline.co.uk/business/business-opinion/getting-rid-entrepreneurship-action-plan-9856045

[3] https://publications.cardiffuniversitypress.org/index.php/WER/article/view/82/438