Enterprise and Learning Committee
EL(3) 19-10 (p1) : 6 October 2010
Implementation of the Economic Renewal Programme
Purpose – To assist the Enterprise and Learning Committee review of the recently announced Economic Renewal Programme.
Brief:- Request to assist the Committee with its work by providing written and oral evidence for this hearing in the capacity as Chair of the Welsh Manufacturing Forum.
Required:-
Members of the Committee wish to scrutinise the implementation of the Welsh Government’s Economic Renewal Programme and would like to consider the following issues:
The Welsh Government’s intended approach to the implementation, monitoring and evaluation of the Economic Renewal Programme – with a particular focus on infrastructure, skills, broadband, manufacturing and business support.
The timescale for delivery.
The extent to which the Economic Renewal Programme reflects relevant recommendations made by the Enterprise and Learning Committee during the Third Assembly.
Response from Roger Evans MBE in his role as Chairman of the Welsh Manufacturing Forum
1. The Welsh Government’s intended approach to the implementation, monitoring and evaluation of the Economic Renewal Programme – with a particular focus on infrastructure, skills, broadband, manufacturing and business support.
The Welsh Assembly Government has recognised through Economic Renewal – a new approach (Released JULY 2010) that changes were necessary to improve Wales’s economic performance. Therefore the vision is correct and I commend the 5 principles put forward for implementation:-
Investing in high quality and sustainable infrastructure.
Making Wales a more attractive place to do business.
Broadening and deepening the skills base.
Encouraging Innovation.
Targeting Business Support.
With regards to the last 3 above I would comment as follows:
From a manufacturing perspective, ERP must recognise the need to build on the partnerships we have created through crisis. For example the Welsh Manufacturing Forum and its associated principle Sector Forums (Automotive, Aerospace and Electronics) have a great understanding of the “voice of industry”. From understanding industry needs regarding business developments,supply chain developments, current and future skills needs and sector intelligence to global trends. Relevant structures to prepare us for the challenges are urgently needed with commitment in the long term to see us through this journey and back to a GDP in Manufacturing in Wales with respective creation of jobs and economic prosperity. This ability enabled manufacturing to be a strong voice at the Economic Summits held during the past 2 years.
It is very difficult to comment on the new internal departmental structures to achieve this as they have only just been released. Final structure population will be completed circa end November 2010.
Similarly for the new Sector Advisory Panels who will be tasked to provide the overarching view to determine policy.
With regards to monitoring and evaluation, well this will come from a variety of sources, business, government and sector panels.
But how will all of this be achieved against the following statement?
For economic renewal we need to:-
Reduce the level of direct support and deploy more resources to wider infrastructure development. (ERP – Targeting business support)
The Manufacturing sector in Wales has reduced from 18.4% GDP in 2005 to 13.4% in 2009. Although evidence obtained by the WAG indicates that they should reduce the level of support to businesses and that the private sector should take the lead. Many businesses rely on this intervention and cascade the knowledge through the company and supply chain hence transferring skills. This network is vital for maintaining best practice through competitiveness means and business to business.
In the last 2 years the WAG has introduced the Single Investment Fund and now this has been withdrawn without clear communication to businesses how to access support. Equally the deletion of International Business Wales will create short term uncertainty amongst the business community.
Key message:- Provide support with a system of intervention that reduces the level of grant support as the project matures.
. This can be measurable with defined outcomes.
- Move to a more investment culture in our dealings with businesses.
This is only possible if decisions are made in “real time”. Many of the SIF applications for support failed because of the procedures for approval with no clear start or gate process. We should investigate future funded support with WEFO European -funded business support projects to ensure that these are more strongly focused on providing support for key sectors and addressing market failures.
Manufacturing now comes under the new sector name of Advanced Materials and Manufacturing. It would be wrong to assume that only a small proportion of manufacturing in Wales is applicable under this heading. To be manufacturing today you have to be competitive, innovative, applying best practice manufacturing techniques and employing and training the very best.
Our refocus on innovation and rate of innovation and our ability to drive new products to new markets requires:-
- Rapid and consistent delivery of new products into the marketplace; responsive design and engineering capabilities; new and sophisticated manufacturing technologies and techniques.
- Extend human competencies, knowledge and technical capabilities within companies; shift away from ‘manufacturing only’ capabilities towards the manufacture of high value added products and services for a global market.
- Responsive and precise knowledge management and business intelligence systems; quicker and more accurate decision making within companies.
This crucial “time to market” provides the collaborative approach through focusing on innovation support. ERP has the responsibility to provide the environment for business to grow. However the voice of industry is well represented with industry partners and fora working together. The ERP provides the many “what” needs to be achieved without the ”hows”.
We must not reinvent the solution but build on and restructure utilising our combined intelligence.
The Advanced Materials and Manufacturing sector is part of the solution.
Therefore we need targets and measures to allow both Sector panels and the Manufacturing Forum to evaluate and monitor the implementation and effectiveness.
2. The timescale for delivery.
Under Advanced Materials and Manufacturing there are no timelines such as those shown against ICT (page 38 of ERP). However the Welsh Manufacturing Forum’s Strategy does have an implementation plan to achieve specific outcomes.
We have a unique opportunity to work with the Sector teams across sectors and the Sector Panels for Advanced Materials and Manufacturing. The Manufacturing Forum has been assembled from partners from across industry, organisations, academia and sector skills councils a wealth of experience and knowledge that
we can build upon. The strategic relationships that already exist can be developed to build the range of anchor companies and their respective supply chains in Wales.
It is difficult to comment any further at this stage as it will be up to the sector panels, Ministers and the sector teams to determine and implement timescales.
However it should be mentioned that we must move away from annual budget control mentality to one of 5,10 or 20 year plan horizons. Therefore if we are moving towards a low carbon and green jobs future, the investment to build oureconomy has to be planned and agreed by all the relevant stakeholders.
3. The extent to which the Economic Renewal Programme reflects relevant recommendations made by the Enterprise and Learning Committee during the Third Assembly.
The Welsh Manufacturing Forum’s Manufacturing Strategy consulted key recommendations from The Enterprise and Learning Committee recommendations – Manufacturing Strategy February 2010.
The ERP has recognised through the recent Economic Summits that working with respective partners provides inventive solutions to be concluded in real time. ProAct is an excellent example and this unique relationship that exits in Wales will be tested further as we now face our toughest challenge to rebalance our economy.
This partnership has a shared vision and both Government and Industry has to find new ways of working.
Roger Evans MBE1st October 2010
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