Could more be done for Wales with the City Deal?

by Alan on November 18, 2015

in Business, Wales

The City Deal is a Treasury driven stimulus for empowering local areas to drive growth by putting greater resources and financial freedoms into the hands of local leaders and it is gaining much attention in Wales. It has the potential to deliver an extra investment of circa £1billion and if used wisely might have a significant and long-term impact on the economy of a region.

But could it also have an impact on Wales? After all, we are a small country in terms of population and could, with a bit of effort and innovative thinking, develop a plan that might transform the country rather than just a single city-region. My belief is that if can but to do so we will need to think and operate differently to the way things are currently aligned.

The first thing to change is a requirement that we need to accept that the city deal investment should be for the whole of Wales rather than one part of the country. Whilst it is clear that the cities are economic engines of Wales, we should look to spread the benefit as widely as possible throughout the whole country. This will require the creation of an appropriate governance structure and a permanent executive team to develop and deliver plans. A highly visible leader would not go amiss.

When looking at the aims and objectives of a City Deal we need to be more aspirational and inspirational in the setting of objectives and purpose. The recent submission by the Cardiff capital city region to the Treasury had the following purpose and themes
• Improve productivity and economic performance in the region.
• Tackle worklessness which currently costs the UK government £4 billion pounds in welfare in the south-east Wales.
• Build on the foundations of innovation across the region
• investment in physical and digital infrastructure
• Provide effective support businesses
• Ensure the economic benefit is felt across the region
• Work together to deliver more
These non-specific purposes really could be considered to be “business as usual” for government at the local or national level and most certainly fail to inspire in a wider context for long-term growth.

It is hard to see how the delivery of these purposes and themes would make Wales either more attractive to new inward investment or would deliver economic benefit to all. We need far greater ambition to maximise this once in a lifetime opportunity. Let me offer an example.

There is a lot going on already around the world to develop autonomous vehicles and large corporations are investing significant amounts of money to do so. Would it not be possible to deliver the whole of Wales as a physical testbed for such vehicles? An example of a more aspirational challenge could be to make Wales a world leader in the development of autonomous vehicles, on land, sea and in the air. And if you want to put the icing on the cake we should also ensure that the control systems for those vehicles are secure from cyber-attack with an appropriate security wrap around them.

This is an ambitious notion that could touch all elements of Wales as the components for its successful delivery are already distributed throughout the country. There are manufacturing plants in North and South Wales producing components for cars, aircraft and unmanned aerial vehicles are being developed and built in South and North Wales, we have range space over Cardigan Bay to develop and test aerial vehicles and, of course, our universities throughout Wales all play a part in supporting these vital sectors.

Even mid-Wales could offer significant drive test facilities creating economic impact within those parts of the country so difficult to assist.
And as for the icing on the cake, the secure control systems, there are companies in south-east Wales that are already world leaders in cyber security and SCADA solutions that would add significant value to securing any new developments.

Of course, this isn’t just about research, development and manufacturing because the centre of excellence in a particular field can also expect to lead the generation of supporting professional services for the creation of, amongst other things, the standards and the governance of autonomous systems being developed here in Wales. This is the win for the Professional Services sector. And there would also be wins for our indigenous small business who will become engaged through an active policy of open innovation where the large Anchor Companies reach out to smaller businesses, in Wales, to develop and enhance innovative solutions to the challenges faced.

Taking a longer view, when we look at the existing business already in Wales, would it not be great to aspire to see General Dynamics lead the development of the next generation of autonomous military vehicles here in Wales and test them throughout the country both on our military training areas and also on public highways? GD are, after all, building the latest range of armoured vehicles and should be well-positioned to make them driverless with help from businesses throughout Wales.

In south-east Wales Airbus Defence and Space is one of the world leaders in the production of unmanned aerial vehicles and also in space rocket launcher systems and could readily be encouraged to further develop its autonomous systems in Wales, test them on range space over Cardigan Bay, and possibly even manufacture them either in existing facilities in North Wales or possibly at new sites elsewhere in Wales, St Athan immediately comes to mind where there is already a strong aero MRO cluster.

We should also consider the multiplier effect of other potential sources of investment and 2 stand out: the Circuit of Wales and the UK Spaceport. There are many ambitions for the former and its status is already well documented but it is not hard to see how it can add a significant component in the development of self-drive vehicles on land. It will also bring with it the skills development and apprentice programmes already publicised, but now as part of a focused programme.

The location for the UK Spaceport has yet to be determined and is still the subject of a competitive bid to UK Government but there is a proposal from Wales to establish this facility at the Llanbedr airfield in mid-Wales. The spaceport would support the launching of unmanned aerial vehicles as well as the development of the new space tourism sector that attracts investment from the likes of Virgin Galactic. A critical component here is the Cardigan Bay range space, which is ideally suited in terms of size, altitude and control systems for low altitude space launch development and testing, extending as it does south to Aberporth.

If we pull these two significant initiatives into the Deal, then the investment value is considerably enhanced and, most importantly, delivered more widely throughout Wales.

It will not be easy: a national vision like this will require the establishment of an arm’s length body able to drive and deliver the programme. It will fill the void that currently exists as Wales does not have a Local Enterprise Partnership (LEP), uniting government, business and academia at all levels. The LEP is currently seen by the Treasury as the preferred vehicle to stimulate economic change. It doesn’t need to an over large or complex organisation (and is not a trip back to the WDA either). A strong Chairman would lead a Steering Board of representatives from Welsh Government and all local authorities and a small executive would drive the work forward. The executive would be empowered to speak freely and openly with all parties, including UK and Welsh Government.

We will also need to stop working in parochial silos like the ones falsely created by the city regions of Cardiff and Swansea Bay, instead we will need to recognise that working together, maximising resources, and utilising all existing capability could, should and will deliver far greater results.

This proposal may worry some as it does not contain reference to many of the big projects so often discussed in Wales recently. There is no mention of the proposed Metro system, there is no M4 relief road, there is no enhanced broadband, there is no upscaling of skills but all these will still be required as essential components to support a far bigger and more ambitious vision that engages the private sector alongside the academic sector and public sectors to deliver a stronger economy.

The critical difference is that the economy of Wales will be significantly enhanced by the creation of a country famous for something, rather than one that is equipped with infrastructure unsupported by aspiration or ambition. When Volvo next considers where they might further develop autonomous vehicles they could consider Wales because of this vision. They won’t come here because we’ve built a new railway, built a bypass around Newport or enhanced our broadband.

Of course, this autonomous vehicle idea is just one option, but it’s the only one I can think of that can have a wide impact across Wales, using indigenous skills and capability to differentiate us on the global stage. There may be other options and if there are I call on those who understand them to lay them on the table rather than let us limp lamely into following an unambitious and uninspiring proposal offered by the Cardiff Capital City Region.

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