dylan JONES-EVANS: Increasing number of people are becoming involved in developing new ventures in Wales.
THE formula for developing entrepreneurship is essentially about putting the right conditions in place to ensure more people perceive the opportunity to start a new business, and that they have both the skills and motivation to turn that opportunity into a real business.
The conversion of opportunity into reality is therefore crucial in developing a more entrepreneurial economy.
However, as data from the Global Entrepreneurship Monitor study for Wales show, while 36% of the Welsh population thought there were good opportunities to start up a business in the next six months, only 3.2% actually did it.
This means approximately one in eleven of those who perceived an entrepreneurial opportunity actually did something about it.
To a large extent, this is the one of major challenges facing the Welsh economy - to try and convert as many of those individuals who have an interest in starting a business into entrepreneurs, and to provide the necessary support.
Other research studies suggest an increasing number of people are converting opportunities into real businesses. For example, the latest Barclays data suggest the number of start-ups in Wales has increased by 35% since 2001. Whether this is due to the general growth in employment needs to be researched further. However, despite the increase in general wealth during this period, it is worth noting the absolute level of start-ups in Wales - around 21,000 a year - is still below what was recorded in any year during 1995-2000.
The growth in entrepreneurship also seems to be focused in certain counties, with rural areas in the Objective 1 region showing a considerable increase during the last year. However, more than a third of all Welsh local authorities (mainly those in the more industrialised parts of Wales) have shown a decline in the number of new business starts. This may suggest that any new business starts initiative under the new merged economic development programme may need to be more sensitive to local fluctuations and may need to work on a county level to succeed.
That success will be needed. For example, data has shown that since the peak of 1.34m people employed in Wales in October last year, there are already 33,000 fewer people employed up to May 2005, with commentators expecting the figures to get worse as large closures such as Sony and Christie Tyler filter into the system. With large firm investment drying up in Wales, it is clear that entrepreneurship needs to become one of the key tools in developing the Welsh economy and in creating new jobs.
Entrepreneurship - both in terms of creating new business starts and expanding existing businesses - will become crucial in determining the future success of the Welsh economy. While I certainly did not agree with the abolition of the WDA and ELWa, I am pragmatic enough to believe the new merged economic development organisation in Wales will provide a unique opportunity to ensure enterprise is the primary economic policy tool , and to ensure a sustainable future based on the talents of indigenous entrepreneurs and businesses. We will have to wait until next year to see if the Assembly Government accepts this challenge
Business website of the week: www.gemconsortium.org - read all the latest reports from the GEM research teams.
Professor Dylan Jones-Evans is director of the National Entrepreneurship Observatory for Wales
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|Publication:||Daily Post (Liverpool, England)|
|Date:||Aug 17, 2005|
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