How an Independent Wales will  do it better 2.

The experience of Technology in Wales.

In How Wales will do it better, it was shown that the Welsh economy, upon which much depends, is lacking in a middle business sector of medium sized enterprise

A high value middle business sector..

Wales also lacked, together with the UK as a whole, the ability to upscale enterprises.

So how will an Independent Wales improve its economic imbalance?

How will an Independent Wales do it better?

High value sustainable enterprise.

The industries of the future.

The industries with high paid skilled jobs.

The industries that will be the core of the Welsh economy.

Having looked at Space science. What’s next?

Life Sciences.

Life Sciences, 

Wales is lauded by the Welsh government and its agencies as leading the UK in the life science sector.

Not to put too much of a dampener, the facts don't support that assertion.

On a per capita basis.

The number of companies in Wales does meet the UK average.

The number of employees is below the UK average at 4.2% rather than the 4.6% population share.

The financial turnover of Welsh based life science companies is 2.3% of the UK average, rather than a 4.6% population share.

So not outperforming the UK average.

The Welsh government asserts that there are 280 companies in Wales in the life science sector, employing 12500.

A significant number are very small companies attempting to break into their particular market.

Of the established life science companies based in Wales, almost all are foreign owned, largely by American health tech or investment companies.

Almost all are attracted by Welsh government financial inducements. 

There are a number of life science hubs across Wales, mostly centred around Welsh Universities, each successful in innovation, research and development.

That is the attraction for the deep pockets of American companies.

The ownership of these small companies means the ownership of the intellectual property they have developed.

As in the UK, Wales has encouraged, at a cost, Foreign Direct Investment.

This in reality has merely meant the purchase of an already successful company or they are taking over the future of Wales life science technology.

The Welsh government argues that it is ‘ pumping ‘, always emotive descriptions, into the Welsh economy.

What it really means is that present and future profits, together with policy decisions are taken outside Wales.

We are being unfair. The Wales government funded a £100 million Life Science Fund, to aid the development of life sciences in Wales.

It was administered by the Wales Development Bank, who themselves appointed a management company.

So a bit less than £100 million by the time their fees were taken.

The Life Science Fund invested in nine companies.

All but one failed.

All had ownership outside Wales.

The Wales Life Science Fund is now closed.

How Wales will do it better.

There is no criticism of a Welsh Government Life Science Fund.

The criticism is how it is used.

First and foremost such a fund should be used to develop Wales technology based sectors. Not as it seemed with this case providing cash incentives to attract foreign companies to Wales. This especially as it appears there was little advantage in doing so.

Many of the success stories that the Welsh government extolls employing the hundreds of Welsh workers are merely factories, assembly lines.

They may be involved in different sectors than, say, car parts, but factories. Not particularly skilled and not particularly well paid.

There are Life Science enterprises that are highly skilled, high value and with the potential for high wages and it is these that seem to struggle.

Struggle for support. Struggle for finance

They are often new innovations, riskier investments.

As argued previously, the big UK banks are dismissive of the small scale business, seeking big deals and big bonuses.

The UK financial institutions, pension funds, hedge funds, are equally reluctant to become involved in ‘ small scale ‘ risk business.

So how will Wales do it better? 

It will  need to provide support and finance research, development and expansion and growth.

The national bank,already spoken of, has a part to play and so too will the government.

The Welsh government can follow the French government, whereby France, having no equivalent of pension funds for investment, takes on that role by providing equity funding.directly.

In addition to support and finance, enterprise in this sector needs to be protected.

Protected from the advances of finance from outside Wales, seeking to control both fledgling and growing Welsh companies.

Unlike the UK, many European countries discourage majority investment in developing companies and in fact legislation prevents it in many areas particularly high tech, transport and communication.

An Independent Wales should welcome foreign companies investment, as long as it is genuine new investment providing new well paid jobs.

Companies that are not in direct competition that stunts the development of developing Welsh companies.

They have HQs in Wales and pay their taxes in Wales.

Are not in sufficient size or numbers to dominate the sector in Wales.

Cyber Security

Cyber security is gaining ever more importance with the increase in online digital activity.

Cyber attacks on data sources a regular occurrence,

So Cyber Securityis not only essential in an  increasing digital society,but it’s also big business.

The Welsh government is investing £3 million to ‘ make Wales a global leader ‘ in cyber security.

It is seeking £20 million private investment by 2030

A big ambition for so little investment.

A global leader in Cyber Security, Israel, not a large country, in 2023 alone attracted £8.5 billion in international investment into its cyber security industry..

In the same period it exported £9.2 billion cyber security related technology.

Wales has a vibrant cyber security ecosystem, so it's been said.

This vibrant ecosystem however seems to consist of an awful lot of hubs. Hubs and associations.

There doesn’t seem a great deal of growing of cyber security provider enterprises from these hubs

The cyber security provision in Wales consists of International companies with a presence in Wales and small scale indigenous companies.

The international companies we will look at later, but the indigenous companies give an indication of the true state of that sector in Wales.

The data for cyber security providers in Wales is sketchy.

The Welsh government provides figures for the number of tech companies overall and employees, but not specifically for cyber security enterprises

The number of technology companies is itself small, at 425, so the percentage in the cyber sector is minimal.

It is also the case that many companies who advertise as providing cyber security , are in reality IT or computer services who have added cyber security as it has become more prominent.

How much of the company's business is in the cyber sector is unclear..

Many of these companies promote themselves by the 20 or 25 years in business slogan.

On examination, such pronouncements also highlight how little most of them have grown in that period.

So how will an Independent Wales do it better?

Israel, not a big country, is a world leader in cyber security, second only to the US.

They achieved this position by government vision. Vision and a central role.

Unlike the UK and Wales, the government in Israel is central to the cyber security sector, responsible for coordination, support and finance.

Israel has the highest startups per capita, but beyond that, its development program means that Israel has two of the top ten world's largest cybersecurity companies.

Lesson for Wales then.

Cyber security was recognised as not only a necessary protective system, but an economic driver.

Cyber is great business. It’s growing geometrically because there is no permanent solution. It's a never ending business.

Wales cyber security presently is fragmented, underdeveloped, uncoordinated and relies to a large extent on the initiatives of a few private cyber security companies for its future direction.

Wales cyber landscape consists of the presence of a number of large multinational foreign owned cyber companies Thales [ France ] Airbus [ International, but not UK ] Portnox [ US ] LRQA Cyber [ owned by Goldman Sachs US ]

These together with a number of small Welsh based companies, who, from historical example, will remain small from lack of support and investment.

An Independent Wales government will take the lead in this sector.

Israel succeeds by investment and support in cyber security skills and technology.

Wales will concentrate efforts to scale up domestic cyber companies.

It makes no sense that the security of data in Wales, government, public services, finance, should rely on  mainly foreign owned companies.

Nor does it make sense that a sector with huge economic potential, together with the potential for continuous growth should not be fully developed by the nation.

Compound Semiconductors.

Wales is a world leader in the field of semiconductors. The words of the Welsh government Finance Minister.

Another technology, again a world leader, again delusion.

It is true that Wales has good university research in the sector and around which innovation hubs have developed and there they will stay, as innovation.

Wales is home to the largest semiconductor manufacturer in the UK. Newport Wafers.

It is also the centre of a semiconductor hub.

In addition to being a manufacturer in its own right, iti s also used for testing the products of the hub.

Newport Wafer was founded in 1980 as a British company

It's not a new company., but It is now an American company, Vishay.

Also quoted by the Welsh government Finance Minister as Wales successes in semiconductors 

IQE. This is an international company, which partly invests in semiconductors and is owned by international financial and wealth companies.

Rockley Photonics An American company.

SPTS. An American company.

These were welcomed by the Welsh government with financial aid.

The semiconductor sector in Wales is dominated by foreign owned, mainly American semiconductor companies.Attracted to Wales by the financial inducements, but more importantly by the output of Welsh innovation from the university hubs.

Their output and skills have nowhere else to go.

What will an Independent Wales do better?

The UK and by extension Wales, are obsessed with foreign, predominantly American investment.

The UK boasts of the fact, pointing to the record numbers investing

Here is no attempt to distinguish genuine new investment from the takeovers of existing often successful companies.

Nor is there any attempt to question the consequences of such dominance.

The UK is almost unique among developed countries to embrace such an approach.

It is highly unusual among European countries that restrictions are not placed on companies investing in those countries.

That is the approach that Wales will take.

The Intellectual Property and skills from the hubs in Wales,must be prevented  from leaving the country.

Resources, financial and other should be directed at elevating the product of the hubs into dometic companies.commercialising its innovation.

Regulation should be introduced to reduce the dominance of foreign semiconductor production in Wales.

There must be a recognition by the Welsh government of the economic and strategic importance of semiconductors to the Welsh economy and the development of its own domestic semiconductor sector.

Presently much of the product of Welsh government investment is to see profits from the companies it supports flying off to the US.

The rest of the Wales tech sector has a similar story.

Electric vehicles,

Where River Simple, a company developing hydrogen powered vehicles, had to crowd fund to raise finance.

Artificial Intelligence.

Where Wales receives just 0.02% of UK investment and where 73% of AI HQs are located in London and the east of England.

Wales has no AI HQ.

There are many creative and successful tech businesses in Wales.

They all suffer from the same problem. The means to scale up.

What the new Independent Wales government will do differently is to recognise that these are the middle sector of the Welsh economy currently lacking.

It is the potential high value, high wages future growth sector.

The SMEs that will provide the career paths to keep the young in Wales.

It will not happen on its own.

 It is not enough to help set up hubs and then leave it to someone else to organise.

This policy has led to fragmented and uncertainty in decision making

It has also led to the  failure to grow..

These companies need direct and accessible finance and support to develop.

They need protection from those from outside Wales with deep pockets who are eying up the potential of these companies.

The consequences are profits, intellectual property and expertise, leaving Wales.

The UK is almost unique in such an open door policy. Other countries see the dangers and impose regulation or even bans preventing such dominance and so should Wales.

The Welsh government must take the lead.

Must be the catalyst to encourage private  domestic investment

To provide the finance where the private sector fails

It is the government that provides the protection.

That's the way to develop the missing middle sector of the Welsh economy.

Next up.

Tourism, agriculture and Welsh Public Services as an economic generator and how an Independent Wales will do it better.

.

  

 

 .

. 

e docs