In the final part of Rhys David's article, he continues to ask: What’s holding our companies back from becoming bigger?
The Scots recognise the importance of becoming a thoroughly modern economy and leveraging their universities to this task. In March the Scottish Government asked Professor Sir Anton Muscatelli of Glasgow University to report on how Scotland’s universities can lead economic growth through industrial partnership and advise how Scotland can learn from other innovative European countries.
The research will be short and sharp, reporting in the autumn this year to government, the universities and public agencies. (Compare and contrast the time taken to decide whether or not to build a new road around Newport).
“Already across the country exciting partnerships with major industry, SMEs, spin-outs and social enterprises are under way, with many success stories to be celebrated. I hope that the outcomes from this report will offer the chance to build on these successes, learn from international best practice and put Scotland on the road to becoming the best place in the world for industry to partner with universities,” Sir Anton said on his appointment.
Wales should be doing the same, not waiting until 2025 and inviting a team from Scotland to come down to give us lessons in what they have achieved.
Maybe we will need to have a longer spell as a feeder economy, creating businesses that will grow and then attract outside attention. Perhaps it is going to take decades before enough small companies in Wales grow to become medium-sized businesses capable of looking beyond Welsh borders to expand.
If this is the case, we need to find ways in which the funds released from Welsh businesses that are sold get invested back in Wales in even more innovative products, creating wealth for more people going forward. We need to ensure that at least some of the businesses that are developed become the agents of consolidation in their sector not the consolidated.
But perhaps most of all we need the capacity within our universities to carry out relevant research and the willingness to commission it. The economic departments of our Welsh universities, unless I am much mistaken, can tell you all you want to know about a range of topics from the macro-economic policy of developing economies to multiple deprivation in Rhyl West.
They teach business students from around the world who can then return to help their own economies prosper. There is a serious gap, however, in knowledge about the Welsh business sector, its size, its constituents, its characteristics, its requirements, its prospects, its strengths, its weaknesses, where investment is going and where it is needed.
As well as having world-class universities Scotland benefits from having a dedicated institute studying the Scottish economy – the Fraser of Allander Institute. We may not have had in Welsh ownership a House of Fraser to provide the core funding for such an institution – and it is most unlikely the current HoF owner, Mike Ashley would fund such a body today, given the parlous state of department store finances.
Are there, however, no Welsh-based or Welsh-born or other charitable donors who would be willing to do so? Should the Welsh Government take the lead?
Properly structured it could provide the key to telling us how to structure the development of a profitable Welsh economy for the rest of this century and beyond. It could repay the investment handsomely.
Rhys David is a former senior journalist with the Financial Times , and has written widely on industry and regional economic issues (www.clippings.me/rhysdavid). He was for six years assistant director of the Institute of Welsh Affairs where he is an Honorary Fellow. He is the author of Tell Mum Not to Worry: A Welsh Soldier's War in the Near East 1915-1919 (ISBN 9780993098208).