Vincent Kane - It's the Economy, Stupid Week In Week Out


Vincent Kane - It's the Economy, Stupid

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since I last presented Week In Week Out. Tonight, I'm back with a

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vengeance, older? Certainly. Wiser? I hope. I'm here to report on the

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deepening crisis in the Welsh economy and how the Welsh Assembly

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:00:27.:00:30.

Government is handling it. The BBC has asked me to do it because I was

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a television journalist for nearly 40 years. But also because for more

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than 25 years, I've been heavily involved with Welsh industry. As

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such, I have some stark messages for Welsh politicians. You're the Welsh

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creators and destroyers. They tell me you're a NEET, what's that?

:00:52.:01:02.
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2030, the smart people will have We are the poorest region in the UK.

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If this is a crisis, the future is an emergency. European business

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leaders have drawn a line in the sand, 2030. By then they say the

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global economy will be totally different from anything we know

:01:45.:01:50.

today, exlosively competitive. That means the children starting school

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this year in Cambodia and Vietnam and throughout Asia and South

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America will emerge from their educational process as productive

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workers in booming economies. What about the children starting school

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near Wales this year? What's does the future hold for them? It pains

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me to say that unless urgent action is taken they will emerge from their

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educational process into a clapped The village where they parents live

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shows evidence of serious decline. We have slipped 12 percentage points

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against average UK GDP in 20 years. This is an unemployment black spot.

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A quarter out of work, twice the UK average. At the community centre

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there's a jobs club to help people find work. Wayne, a paint sprar, has

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applied for 77 jobs since he was made redundant in February. Any

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response at all from any of them? Yes, but one response by mail and

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I've had one letter off a company. They said they will keep my CV on

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file. Most of the stuff I'm searching for now, especially in the

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powder coating, is mostly up in the Midlands. Nothing here in Wales?Not

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a lot, no. You're still fit and well? Yes, fit and raring to go.You

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really have a skill too. Yeah.Well keep trying. Yes, I will.Never give

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up. No.They tell me you're a NEET, what's that? Well not in education

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or training or I haven't got a job. Have you ever had a job yet? Yes.

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Was that? Working in the local Chinese round here and when I was

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16. How many jobs have you applied for? I applied for about 15, 20 a

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week. Because of my lack of skills in some departments, I find it hard,

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like they don't get back to me or send me e-mails saying I haven't

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been successful. Though I try really hard I still don't get anywhere. So

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it's pretty hopeless? Yeah, it does get you down a lot. I don't sleep

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often. Because I think what am I going to do. How old are you?19.

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Nobody seems to look upon you to help, like, but it is quite depress

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depressing. I'm only 19 as well, people think oh, yeah it's easy for

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youngsters to get a job, but it's really not. Kate Gillet helps people

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find work, but the only local vacancies are in construction or

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care homes. You're suggestioning that if there are jobs they're

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likely to be far away, nothing much here? There isn't much here, other

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than partime positions. People are cutting their cloth with the

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economy. Even organisations have to rein it in some way. We're finding

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that flexible working practices and partime positions are more likely to

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come up on your search than fulltime positions. Aim a qualified

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plasterer. And you can't find a job? How many have you tried? 30 plus.

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Will do you if you can't get a job? I'm just going to keep looking.

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you going to do any more training, perhaps? If it has to come down to

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that, then yeah, look into it. into it? Have a go for it. You must

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have a go at it. Don't give up. It all seems pretty hopeless, doesn't

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it? It makes your heart sink. The only jobs available are in England

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or in care, looking after the elderly. Is that the future for the

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next generation? In the 1980s I founded the Wales quality centre. 18

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months ago as chairman, I asked 150 captains of industry how would they

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survive in the future. They said only if cad ral -- radical action

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were taken now. This is how one of them responded. By 2030 all the

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smart people would likely have left Wales leaving behind people whose

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main job is to support the burningoning cost of geriatric.

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can vouch for the fact that industrialists, certainly

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manufacturers are underwhelmed bit Welsh Government's performance in

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their regard. But let's be clear about this, they're not say saying,

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I'm certainly not saying, that the crisis is the fault of the present

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Welsh Assembly Government. That would be ridiculous. It's an

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historic trend, over 100 years, though we do notice that it's got a

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lot worse in the last 15 years. But what we are entitled to say

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industrialists, you and me, is that we would expect our newly elected

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Assembly to be all-out to fix it. I'm sometimes tempted to go into

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that Assembly, when the 60 are in session, and shout out Bill

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Clinton's message to them -" It's We are as a company very proud of

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the fact that we are a manufacturer. We make stuff. We take raw material,

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raw metal bar and we turn it into products that are used all over the

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world. Manufacturers like Guardian of Bridgend are the lifeblood of the

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Welsh economy but feel neglected by Welsh Government. I think they do

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pay some attention, sometimes just lip service to the manufacturing

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base. If you look at Germany and how quickly they came out of the 2007/8

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reception, they have a higher manufacturing base than we do and

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they came out quicker. When you look at what adds value to a national

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economy, be it Wales or the UK, it's taking something and turning it into

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something else which has a higher value. People like you have told me

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what we need for the future, 2030 and beyond, is a culture of

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innovation. If you look at the low-cost manufacturing markets, they

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are always continually coming up the value chain. If we're going to stay

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ahead and do anything which adds value to Britain plc in the global

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market, we've got to keep ahead of those lower costs. We will never be

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low cost. Britain is not a low-cost place to work. So we have to go

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further and further up the value chain and the only way to do that is

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they would need to be successful in 2030 that they don't have now. The

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most common answer - education. Welsh education, they said, is not

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fit for purpose in schools, colleges and ats the university. The

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16-year-olds who leave school, the NEETs, as they're called, I quote,

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virtually unemployable, largely illiterate, innumerate and without a

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vestige a work edgic. The universities, I Queiq, turning out

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masses of useless arts graduates going nowhere, but not the engineers

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and scientists that we need now and we'll need them in great abundance

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in the future. The colleges, who provide the skilled training for the

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mass of the Welsh workforce, they provide the courses that suit them,

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not the courses that suit industry. Of course, they're not all like

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that. There was a new building built here last September. Just in time

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for the cutting edge Biocatalyst company across the road, which

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develops and produces enzymes for the food industry. Last year, they

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were having such trouble recruiting the right people, they were thinking

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of moving to Germany. When people come to work here in the R & D side,

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they go in a laboratory and they have to do practical work. We were

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having graduates come here who had almost no practical skills at all, a

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much lower level of practical skills than say someone leaving school 20

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years ago. I mean, there's possibly many reasons. Some say it's health

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and safety in schools, so they don't do experiments, also in

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universities, because the numbers have increased, they don't spend as

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much time doing practicals. But other countries seem to get their

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scientists to spend more time doing practicals. Hence we have overseas

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scientists working here. Things are changing. The new state-of-the-art

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build building has enabled Stuart West to send three apprentices there

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to learn the skills his company needs. He has a college keen to work

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with him. Everyone benefits. The apprentices learn partime at the

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college and they're doing paid work with Biocatalyst. I understand in

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your case you chose an apprenticeship rather than

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university because you had the A-levels to get you into university,

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why? I think going through university you learn a lot of

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academic side but they don't necessarily know how to apply that.

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I've always wanted to learn and work at the same time. I feel that would

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be much more advantageous. Good. What about you Stuart, what do you

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think of these young chaps? We get graduates coming for interview who

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don't seem to have done this sort of thing, so this is perfect for us.

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And having the college ten minutes away is even better.

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The new building cost �40 million and the principal is proud of it.

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It's a beautiful area. Lots of light coming into the building. Welsh

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Government will spend �318 million this year on FE colleges which train

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the mass of the workforce. But only 12% of that is allocated to

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engineering and related courses. The principal acknowledges the problem.

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One of the criticisms that's been made of colleges generally is that

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since they're funded by the Assembly it's all about bums on seats to get

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the revenue, what do you say about that? Funding is very important.

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It's important to any institution that you work in. We have reduced

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the number of courses where there aren't progression opportunities for

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learners into employment. We've had to shift resources from one area,

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which may be very popular and it may be a subject that the students want

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to follow. But if there are no further opportunities for them, then

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we turn the tap off. We encourage them into new areas where there is

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When I began my reporting career, 50 years ago, iron, steel, coal

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employed hundreds of thousands. Today's industries are cleaner and

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greener and smaller, but can small to medium-sized industries give us

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the prosperity we need? Yes, if we give them the support to innovate

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and the supply of talent they need. We have the talent. Two Welsh

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youngsters recently won the UK young engineer of the year award.

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engineer of the year award. winners are... Wasim Miah and

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Jessica Jones. Absolutely amazing. Didn't think it would happen.

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judges said the UK's engineering industry has an incredibly bright

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future if these two are anything to go by. Hello, Jessica, I remember

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you. UK engineer of the year. What are you doing now? I'm studying

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astrophysics at the moment. At the university? Yes.This is the first

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year? Yes.Jessica's award was for a device to monitor contractions

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during labour. She does all her experimenting in her parents'

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garage. This was the prototype that won. This is an early prototype.

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Since then, I've developed a fibre optic version which we're applying

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for patent for. There are plenty of applications for. It I would like to

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set up a business to protect the license, to license the patent to

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the business and start manufacturing it. Her inspiration came from her

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father and a teacher at her old school Willows in Splott. I had the

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most fantastic and supportive teach teacher, Mr Keith Ellen. He's

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retired now, so they don't offer a GCSE electronics course any more.

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Which is a real shame. Only are you a good scientist, a good engineer,

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but you're also a budding entrepreneur, whether you like it or

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not. Where did that come from? think engineering combines very well

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with entrepreneurship. I had the great pleasure of seeing a design go

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from a concept right throw manufacturing a prototype. It gives

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you an entrepreneurial feeling. It makes you want to take it further.

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You want to see what will happen if you take that product to market. It

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doesn't always work, but it's, engineering encourages you to be

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innovative. That's the one thing that my electronics course did. It

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encouraged me to think outside the box. Last year, only a third of

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graduates from Welsh universities were in subjects which industries

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say are vital, science, engineering, maths and technology. Do you think

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there's enough emphasis in Wales on innovation and manufacturing?

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Definitely not. You go to a country like Germany and engineering is seen

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as an important profession, as important as a doctor. Over here,

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children aren't sure of what an engineer actually does. I don't

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think it's promoted properly. The stereotyping that women can't do

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engineering is wrong as well. It's all just a misperception and we need

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more young people to change that perception. Jessica has a bright

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future. But of 221 secondary schools in Wales, only 32 teach electronics

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to GCSE. How does the skills minister respond to industry's view

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that education in Wales across the board is simply not fit for purpose.

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The qualifications review will ensure that the qualifications

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offered to young people are revent to the needs of the local economy

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and more likely to help them into employment. We're introducing a new

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planning and funding regime for further education and school sixth

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forms, which will ensure there's a greater collaboration between the

:17:55.:18:00.

providers of education here and training. All of that employers will

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have a key role to play. Of course our apprenticeship programme.

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pick up a point about the funding you're providing for the colleges.

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Last year, that was 318 million, impressive figure. 12%, only 12% of

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that went to engineering or related subjects. That's a deplorable state

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of affairs. We have not sought to control how colleges choose to spend

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their money. We are certainly driving within our apprenticeship

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system and the qualifications system to encourage more young people,

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particularly girls, to per sue the stem subjects. The skills minister

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is right about that. We need more engineers or more politicians

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determined to produce more engineers. In the last 40 years,

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we've had two great opportunities to reverse the long economic decline

:19:04.:19:14.
:19:14.:19:20.

and lift ourselves out of poverty. to lift Wales out of poverty and set

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her on the road to prosperity came in the mid-1970s with the creation

:19:26.:19:32.

of the WDA, Welsh Development Agency. It had money to spend. The

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greater part of its resource came from the value added to industrial

:19:37.:19:41.

and derelict land reclaimed by the land authority for Wales. It was a

:19:41.:19:51.

considerable pot of money. From the start, the agency developed a policy

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of inward investment attracting business, large and small, into

:19:55.:20:02.

Wales instead of concentrating on developing existing Welsh industry.

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This made Welsh businessmen very, very angry. Sir Roger Jones, the

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great innovator and entrepreneur was chairman of the WDA when it was

:20:14.:20:19.

taken indoors by the Assembly. hoping perhaps that as chairman of

:20:19.:20:22.

the Welsh Development Agency I might have been able to influence it and

:20:22.:20:27.

change it. But the mind set was that they knew exactly what they wanted

:20:27.:20:36.

to do and were content to do it. their strategy? To bring in inward

:20:36.:20:46.
:20:46.:20:48.

companies, who would come to Wales and open factories to employ

:20:48.:20:54.

hundreds of workers. The WDA was hugely successful at that. In the

:20:54.:20:59.

80s Wales attracted more inward investment than anywhere else in

:20:59.:21:03.

Europe. 30 years later, many of them, perhaps most of them, have

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gone. Inward investment being the main priority successful, though it

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was, was in fact a tactical error. Yes, well I think it was inevitable.

:21:19.:21:27.

There's always an element of rape and pillage, if you want to call it,

:21:27.:21:33.

if you put money in a market that's new to you. They will be there for

:21:33.:21:38.

as long as the till keeps on ringing. But if it looks as if the

:21:38.:21:42.

financial tide is moving, then they'll be off. If that money,

:21:42.:21:49.

instead of being used to bring people in, had been used to

:21:49.:21:52.

modernise, expand what was already here in Welsh business, wouldn't we

:21:52.:21:56.

have something to show for it now? At the latter stages, this is what

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the WDA was trying to do was to support indigenous companies more

:22:02.:22:12.
:22:12.:22:12.

and more. That WDA strategy of inward investment much of which has

:22:12.:22:17.

gone, rather than investing in Wales was a lost opportunity. Then we had

:22:17.:22:27.

another chance. Good morning. It is a very good morning in Wales.

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APPLAUSE Devolution was a great opportunity,

:22:34.:22:38.

at last our own Government. But Government even self-Government is

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not an end in itself. It's a means to an end. We gave them power. We

:22:43.:22:47.

expect them to use it. A golden opportunity to lift Wales out of

:22:47.:22:52.

poverty and set her on the path to prosperity. You would have thought

:22:52.:22:58.

that our Government would be hell bent to lift us out of it. But Welsh

:22:58.:23:03.

business people don't recognise any sense of urgency. Coming out from

:23:03.:23:08.

under Westminster, you've now got a small country, small Government

:23:08.:23:12.

which should be able to be fast and flexible, but you don't always get

:23:12.:23:16.

the impression it's like that. companies need to be quick on their

:23:16.:23:21.

feet to keep up with the forge ahead of international competition.

:23:21.:23:25.

They're still waiting for the full devolution dividend. It seems to be

:23:25.:23:29.

very slow and process focussed rather than quick and output

:23:29.:23:36.

focussed. You know that there is a drive now to make Wales plc, so to

:23:36.:23:41.

speak, fits for purpose by 2030. What chance do you think we have?

:23:41.:23:47.

think we have a reasonable chance. It is going to need significant mind

:23:47.:23:50.

set changes in various areas, probably the chief of which is

:23:50.:23:53.

within Government. We are a small company. We're in the middle of

:23:53.:23:58.

nowhere in Wales, but we have carved out a niche for ourselves in a world

:23:58.:24:04.

market by looking outwards. Wales as a whole needs to stop looking

:24:04.:24:07.

inwards quite as much as it does and start looking outwards. If that

:24:07.:24:11.

happens, yes, I think there's every chance of making it.

:24:11.:24:16.

If that is to happen, Welsh industry is entitled to Government support

:24:16.:24:21.

delivered quickly. On one occasion, the politicians and civil servants

:24:21.:24:26.

demonstrated that they can do just that. In 2008, when the world fell

:24:27.:24:32.

into recession, they put together a training scheme, Proact, which

:24:32.:24:38.

helped companies avoid mass redundancies. I would say it

:24:38.:24:43.

preserved about 10,000 jobs. Zblt Government acted quickly? Very

:24:43.:24:49.

decisively. So much so that really the rules were invented almost after

:24:49.:24:56.

the scheme had started. There's a play waiting for Goddo. Two chaps

:24:56.:25:00.

are on stage waiting and waiting and nothing happens. Waiting for Edwina

:25:00.:25:09.

is even worse. I would disgree with that. Mrs Hart in particular is

:25:09.:25:14.

always ready to see you. Her desk is clear. You don't what -- have to

:25:14.:25:19.

wait long for a decision. Goes to committee then, it can take not

:25:19.:25:25.

months but years to get a decision. Not in this sector. I have no

:25:25.:25:28.

criticism of ministers understand of how the sector works and the desire

:25:28.:25:32.

to support it. They can get it right when they try. Sir Roger Jones

:25:32.:25:37.

thinks they need a killure change, a different mind set. I think they're

:25:37.:25:41.

sincere people. They want to do better, but the world is divided

:25:41.:25:47.

into two groups. You have the wealth creators and the destroyers. Alas,

:25:47.:25:50.

the public sector tends to destroy our wealth. It's the private sector

:25:50.:25:54.

that creates it. It's just that there's a lack of understanding of

:25:54.:26:00.

how wealth gets created. In the meantime, the poverty gap

:26:00.:26:05.

grows and so does voter apathy. What have they been doing with their

:26:05.:26:11.

time? The Welsh AssemblyIs not prepared to set targets about

:26:11.:26:14.

closing the gap because you're afraid you won't. Can't you plan the

:26:14.:26:21.

economy? Look, we cannot control the economy. I don't want to be just

:26:21.:26:25.

repeating myself, but we are working very hard in terms of raising skill

:26:25.:26:29.

levels, for example. You should plan and you're not. You've just told me,

:26:29.:26:34.

we can't plan. No, what I'm saying... You're saying that we

:26:34.:26:38.

should plan to improve GDP by a certain amount a year. I think with

:26:38.:26:42.

the current economic situation that we're under, as is most of the

:26:42.:26:45.

western world, it's very difficult and would be a hostage to fortune if

:26:45.:26:50.

we were to say we will have A, B and C in a few years. You ask why the

:26:50.:26:53.

rest of the world is doing better than we are? Our responsibilities

:26:53.:26:57.

are here. We're certainly looking at other areas of the world. In terms

:26:57.:27:01.

of our resources we are planning and working well with industry. That is

:27:01.:27:11.

my experience. 2030 offers one last chance to rid

:27:11.:27:15.

ourselves of the poverty which has defined us and degraded us for a

:27:15.:27:22.

century. In my opinion, for what it's worth, Wales has the potential

:27:22.:27:28.

to be a successful contender in 2030. The next 20 years will be

:27:28.:27:34.

critical. We will need Jessica with her brilliant inventions, her dog

:27:34.:27:40.

determination of Stuart West's apprentices. Judith with her passion

:27:40.:27:46.

for her students, Ian Maxted with his inventive miebd -- inventive

:27:46.:27:50.

minds. Most of all we will need the leadership of the Welsh Assembly

:27:50.:27:55.

Government. If they can energise the nation, make us feel it's a national

:27:55.:27:59.

crusade, if they can galvanise education, give it an electric

:27:59.:28:04.

shock, if they can extreme line the laborious processes, smarten up the

:28:05.:28:08.

civil servants, if they can facilitate industry, find out what

:28:08.:28:14.

it wants and make it happen, fund it where necessary, if they do all

:28:14.:28:18.

this, Wales will reach the promised land of prosperity and devolution

:28:18.:28:23.

will be the best thing that's happened to Wales in 150 years. But

:28:23.:28:29.

if they don't, if they say it's not our remit, our hands are tied, we

:28:29.:28:33.

have other priorities, if they play party politics, then I would say to

:28:33.:28:39.

each of those 60 Assmebly Members - stand down, make way for someone

:28:39.:28:45.

who's prepared to try. I would say to all of them collectively what

:28:45.:28:50.

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