Friday, February 12, 2010

Can technology play a part in a Welsh economic future?

I have been hacking my way between just outside Aberystwyth and either a Sun office near Camberly or customer sites for over 12 years. Before that I did the same for the Cray bit of SGI for 6 months. The need for travel has become less and less as the years moved on. Work from home has made it possible long term, but I have still got the odd call from my director along the lines of "can you find yourself in Johanesburg tomorrow morning please". Aberystwyth to Heathrow is more of a challenge than the 12 hours on a 747. I typically have to travel somewhere in the UK 3 weeks out of 4 and outside the UK once or twice a quarter. I still spend less time traveling to work in a month than your average London Commuter and my typical commute goes via the kettle.

I pay may various taxes from Ceredigion, am a full part of the community(by my definition at least), raising a family which includes the 1st boy born in our valley for over 40 years. So I would suggest that I contribute my share to the economic well being of Ceredigion, without the need for the grant funding which has been the case with so many posts created with a fanfare of grant funding. In the wider economy, currently technology as a service is a cost to Ceredigion(or even Wales) rather than a net source of tax pounds. Can that change?

Imagine Google had it HQ in Swansea. It would change the whole landscape of the economy of Wales. Other companies would spring up around it, not limited to technology, but marketing, services, accounting, law, recruitment to mention but a few. The idea for the technology behind Google came from 2 PhD students at Stanford, but that could have happened anywhere. The environment of Silicon Valley is what made Google really happen.

Wales does have both technology companies and companies that are major users of technology, but they are relatively few and far between. Most of the Welsh site visits I have made have been to the various Universities. In 12 years I have visited two non-academic customers in Wales, compare that to cumulative months spent in Scotland. I have worked on large computers which multi-nationals run their business on which are cited in a Data Centre located in Wales(usually Cardiff or Newport), but I was working with the intellectual power which is located in L0ndon. Often the main human resource a data centre requires is a security guard. You may see why I don't believe Wales currently has a vibrant technology sector, but some successful small pockets and some struggling pockets. There are web site designers in Welshpool high street, financial software developers in Festiniog, Games developers in Aberystwyth and many more I would never have come across. I don't expect the production company which did Torchwood and Dr Who was a technology free enterprise. All employing people and generating (hopefully) tax revenue, but they are not a major part of the Welsh economy.

Wales has world class tertiary education in the technology area. In my disciple of Computer Science, all the departments have a strong research record, with Aberystwyth in the top 20 departments in the UK for research. . All the 5 major universities have departments (Aberystwyth, Cardiff, Swansea, Bangor and Glamorgan) which produce high quality graduates who have gone out and made their mark in industry over the last 20 years and continue to do so. Few make their mark in Wales.

Wales has been good at acquiring grant funding. An example is the the Visualization centre at Aberystwyth for which Sun Microsystems was one of 2 companies to provided initial match funding (the other was SGI which I worked for prior to Sun). It may be too early to tell, but I have seen little tangible evidence of it providing a catalyst for SME development to match the level of funding to set the facility up. There was an expectation that companies would come to mid-Wales to use the service. In reality, the communications links are too poor. An an industrialist, if you want an academic partner, then a similar facility exists at Warwick which is 3 hours closer to any location that the target companies cited would be located. Cardiff, Swansea, Glamorgan and Bangor has similar problems, but less severe.

Over 10 years ago I suggested holding a Sun technical event in Cardiff rather than Bristol. I might as well suggested it should have been held on the moon to the marketing people who held the budget and did the administration. At least 50% of those attending would have come from Welsh Universities, but the concept of crossing the bridge from the west was one they could not entertain. I believe this mindset still holds in the rest of the UK and is maybe stronger today.

If you think that Broadband in Wales is good enough to encourage business, then have a look at the heatmap of the UK and think again. Lets just look at Wales.

Much of the large white area is the domain of mostly trees and sheep, so it is of less concern. What is concerning is that even in towns, less than 4MB is normal and less than 1Mb is still common. The future development of a technology based economy will be skewed to a small area around Cardiff. Young people view fast Internet access they same way they view air. It is a bare necessity. A second of line between our village and the exchange has an OpenReach van almost permantly parked somewhere along its 200m length. It is know to be old and problematic and OpenReach engineers have requested its replacement many times. Because it is capital spend rather than spend on repair, the replacement continues to be put on hold. Small sums, big difference, prehaps you to 512k improvement the engineers suggest.

So what can be done?

  1. Form a Welsh technology Venture Capital fund. Technology ventures are risky. Some will grow, some will fail and some with be bought up and moved. Investors need a reward for this level of risk. This has to be a private sector fund, the public bodies in Wales are incapable of doing this without excessive bureaucracy and missing the real opportunities. They won't understand the nature of the technology business. The challenge for the Assembly Government would be to get a investment house interested and make it worthwhile for private and institutional investors to take the risk beyond the 30% tax relief VC funds currently are entitled to. Why does the San Francisco Bay area have so many successful technology firms? A primary reason is the availability of Venture Capital. The sunshine does also help.
  2. Can I get to London before 9am to do a full days work? Staying overnight in London is all very well, but it is a pain if you have a family and I miss story time often enough as it is. Hotels add a major overhead. A viable rail network which can get you to London by 9am. This is true in Cardiff or Swansea and north Wales (Wrexham and Shropshire service for example). For mid-Wales, even places such as Welshpool which are close to the boarder, it is requires a drive to Shrewsbury 1st. For Aberystwyth the 1st train gets into London after 10pm which is not much use when a company is paying day rates for you.
  3. 512k is not enough. Reliable, reasonably fast broadband with a small lag behind the rest of the UK in terms of improvement is vital to building a technology tax base. Slower is OK, at the moment my ADSL is running at around 1/8th of the average of my peers who live in or near cities. You don't encourage home workers paying serious tax revenue with snails pace broadband. An SME needs much higher bandwidth. This should also be a core feature of a green agenda. We hear lots of noise from the political types, but the speed gap between Wales(rural in particular) and the rest of the UK continues to widen. Technology is there, it is just the money and will to upgrade parts of the infrastructure.
  4. MBA in Technology Leadership as a part time course for those with experience in the technology industry. Most remote would be with some weekend/evening sessions. There are areas which are essential to building a business such as marketing, sales, investor relations, accounting, governance, employment law, etc, etc which the ideas people won't have a background in. You may have learned some my osmosis(I have learned quite a lot about the technology sales process by watching it for example), but you won't understand the scope and the underlying principles.
  5. Require all restaurants and cafe's which could be connected to broadband, to provide free at point of use WIFI(fair enough tying this to using the establishments services). None of this t-mobile or BT Openzone rip off rubbish.
  6. Early access to advice saves money. I was very impressed with the concept and effectiveness of the Citizens Advice Bureau in my 3 months as a trustee and 2 months as the Acting Chair of a Branch. A charity that delivers advice free at the point of contact. I have meet a number of "old boys" who are very wise and experienced in business who have recently retired. They know about governance, bookkeeping, etc and their insight could be applied equally to self employed tradesmen as small IT industry start-ups. Lots of scope for this to go wrong and to be abused, but the C.A.B. put in place a set of rules of engagement which works very well, so the same overall model. However, you don't want a Victor Meldrew cross Harry Endfield taking 1/2 your day and telling you that "you don't want to do it like that" when they don't have a clue what they are talking about. Just don't ask me to be a Trustee. My experience of public sector (or quango type organizations) is that they are very poor value for money and tend to have a political agenda behind them at some level.
  7. A work bid auction site. It is probably against some EU directive, but having a auction web site where Welsh Companies who want work done can put up items of work to be bid for. Companies and individuals from Wales can make non binding bids for the work then the 2 sides are brought together to discuss scope, risk management, etc, etc and draw up a contract(which might be a simple as a Purchase Order for a number of days time). The site providing the web services could also provided the legal services to help both sides with the contracts. If the seller does not get on with the potential contractor, then can move on to the next. A tight Ebay model won't work as contract IT work is far more complex, but this would provide introductions between those who want work done and will pay for it and those who can do work and want to be paid for it within a structured framework. Maybe the Welsh Venture Capital fund would put some money in as this should at least be self supporting and capable of making money if the EU did not get in the way.
  8. Welsh Institute of Risk. One of the major problems I have found wondering through the IT industry and its customers over the last 13 years is a failure to "think risk". This goes much wider. For we see many examples of ineffective use of public funds because arses are being covered rather than risk and reward being assessed and managed. I sat in a meeting for a failing project at a large University in an other part of the UK and mentioned the need to understand the risks this project was exposed to going forward. The meeting chair said that was "just project management". That was 6 months ago and I have just been asked to attend another similar meeting, wonder why. Risk is about far more than project management, it is interdisciplinary by nature and requires domain experts and also process expertise. You don't hear about successful risk management, you only hear about the failures. This will be a growing area and is an area where a cross department and possibly cross institution grouping would give Wales an advantage bringing research capable departments in the areas of Law, business, engineers and many others. A part time MSc in Holistic Risk Management?
  9. WAG to fund additional technology PhD's at Welsh Universities. If you want a vibrant TECH. sector, then part of that the intellectual component will come from research via PhD's. While the 2 Google founders never finished theirs, a PhD is training for research and is a pivotal component in generating seeds that can grow into S.M.E.'s or larger
  10. Any further bright ideas, add a comment, I promise the rest of the world will know better and ignore them.
Why won't Wales have a vibrant technology sector any time soon? Beyond the obvious drag of history, I offer 2 primary reasons going forward:
  1. A lack of political understanding of the technology business and its potential
  2. A lack of political will to give up control and facilitate others to make the difference
A Welsh Google is improbable, but I am bullish about what progress could be made in terms of making Wales a part of the global tech community and building a serious tech sector contributing serious net revenue which can be recycled for social gain.

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