What happens when convergence diverges?
Wales Business — By Dan Bridge on September 3, 2010 7:00 am
Chaplin and the machine: Wales needs to innovate, not follow - and we need the support to allow it
IT WAS last week that I was by invited by new Welsh technology organisation Software Alliance Wales (SAW) to attend its five-day course on programming the iPhone in Aberystwyth. This appeared to be great timing as I’ve just started a games company whose first product will be an iPhone game, and before we can get any funding in place we’re going to need to develop a working prototype to support the business and marketing plan. It was also a good opportunity to network with like-minded techies in Wales.
So I replied saying I’d love to go. But I was immediately turned away because I live in Cardiff. Horror of horrors. Cardiff is obviously in Wales, but it isn’t in the “convergence” area which borders the SAW’s remit. The alliance, by the way, has the following mission statement:
“The Software Alliance Wales programme is led by IT Wales at Swansea University in partnership with the Universities of Bangor, Glamorgan, Aberystwyth and the University of Wales Trinity Saint David. SAW has been developed to provide specific support to the software sector, to address skills requirements and to respond to demands to help Welsh businesses to maximise the potential of exploiting new technologies.”
Taken from its website, this seems to be just what we needed. It would assist in addressing a “skills requirement” so we could “maximise the potential of exploiting new technologies”. You’ll also notice that it’s quite loose in referring to Welsh business and doesn’t state that there is a potential geographic discrimination. As it turns out, I am based around two miles away from the boundary, which means that my cash-strapped project which would directly benefit from the project – according to the SAW mission statement – cannot. However, a cash rich – some would say more savvy located – business in Caerphilly or Bridgend could hop on without a problem. This is massively frustrating and, although an email was sent to the organisers in Aberystwyth highlighting this problem, a reply has yet to appear. Perhaps email travels less well in and out of the convergence area.
Drawing a boundary on a map to determine eligibility, as an awful lot of history will demonstrate, is not terribly clever. Why not introduce an element of means testing? What about factoring in the likelihood of the company’s ability to employ and train? How about looking at the actual product that is being developed and its impact on the region? For my money, a successful games development company in Wales would provide a relative hen’s tooth.
Some digging around has shown that convergence is specifically designed to assist “poorer” areas of Wales, and the funding for SAW is, presumably, linked to this boundary, and drafted in Brussels.
In practice, the convergence area policy spreads what little talent we have in Wales far and wide, instead of concentrating into a single point of excellence. Having worked in Silicon Valley, I know only too well how the density and proximity of skills, support structures and general environment is critical. In my view, it ideally needs to be focused on the three main areas that regularly foster the success of the hi-tech and start-up culture:
- Emerging technical talent
- Investment money
- Non-execs with experience of how to manage those two things
When these three things coalesce, you start to see exciting things happen. But not if you spread what you have too thinly.
These three crucial factors must be located within easy reach of each other. If they are within a short driving distance, such as the walking distance between Palo Alto and Stanford University in California, then all the better. If you drive from Stanford University to Sand Hill Road (where all the big VCs are based), it takes around 10 minutes. In the same amount of time time, you can drive to the H.Q. of both Apple and YouTube. Working in San Francisco, our office was just 25 minutes from Sand Hill Road.
Here’s a great example of the way Silicon Valley works. Yesterday, there was a meeting of Gaming and Mobile Entrepreneurship (GAME), a regular informal get-together “for people who are interested in gaming, mobile and entrepreneurship. The event is open so feel free to pass around.” It’s informal but just look who attends – Google, Zynga, Activision, and Blizzard are among the delegates. It’s pretty much a who’s-who in gaming, social media, web. And, of course, because there’s emerging talent present, there’s also venture capitalists present.
My friend, former Google games advocate Mark Delaura, posted the event up on his Facebook page to let everyone know. And, having lived there for a few years, I know how influential these “informal” events can be in helping a business to succeed. This is likely where the next Zuckerberg or Pincus will be trying to find someone to back his or her crazy idea.
Using a postcode test to decide which ventures are worth helping and those that should be ignored seems to be just about the most dangerous way of addressing the skills gap in Wales and very likely the reason why – once again – I’ll be looking to Silicon Valley for help.
Tags: Cardiff, Convergence, entrepreneurialism
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15 Comments
You sound surprised Dan. I would wager a pint that a large portion of your business is outside of Wales, We’re digging trenches and laying broadband lines until 2014 when, by then, scientists will, most likely (tongue in cheek) implant digital mobile receivers directly in your brain. We keep missing the plot thinking making things smaller and more focused will help raise all boats. That’s US Democratic party thinking and look where that is taking them.
I spent a week in Ireland last week and was able to see, despite the snickering over their current economic woes from here, how real public partnerships focused on economic development and growth helped counties far from Dublin grow and thrive.
In Wales we play ‘small ball’ (small cities, small issues, small airport) and are locked/steeped in parochial thinking and ways. I’d love to see businesses grow and thrive in Wales. Sitting in my Amsterdam hotel room before next week’s flights to the USA and back to China next month, I am convinced our elected and private sector leaders will never do what is necessary to grow Wales beyond the golf tournament that will eat the country alive in three weeks’ time.
Talk is cheap, action requires much, much more!
Denis, interesting point. Since 2004 the bulk of my business has actually come from within Wales (Cardiff University, Bangor Uni & Glynd?r University etc) – my startup http://www.inpractice.org builds advanced web tools for managing healthcare education. So let me know when you can buy me that pint
During that time I’ve worked a lot in Ireland too with Trinity College Dublin and Galway University and what I noticed during my time there is that they appeared much less hampered by bureaucracy – in fact they were willing to override it where they could (I’ve never witnessed that here!). I’ve also consulted with some large organisations in Australia. As a rule both countries are far more forward looking in their use of technology. I believe they genuinely see it as something that can give them a distinct competitive advantage.
My somewhat rambling point here, and my apologies for leaving other disciplines out as my argument only considers my experience of technology start-ups, is that they tend to flourish around centres of academic excellence that are situated near sources of investment money. It’s obviously a chicken and egg problem but that doesn’t sound like Aberystwyth to me – actually, having tried to commute there from Cardiff I know it’s not.
I’m looking forward to the brain implant!
I want to watch the Ryder cup with you, Denis, somewhere safe…
When is the Ryder cup anyway?
Great article, classic case of Wales using Euro money ‘by the rules’, instead of doing what the hell we like with it once secured. I’m strongly of the belief that all this geo-bounded funding will serve only to embed the economic failings of targeted areas. Why annex under-performing localities from thriving neighbours? Is Wales even big enough to draw all these lines on the map?
Great post Dan!
It’s such a shame, there’s so much talent in Wales with plenty of passionate people quite eager for things to happen, but all that drive and enthusiasm just get leaked through the border where people can achieve bigger and better things with more support and recognition….
Good article. I have a feeling Chris is away at the moment which may explain the lack of response, but I will ask him about it when I next see him.
The two technical people at top of this SAW get it, they have run companies themselves. I have yet to be convinced that the funders get it, but SAW is a small step in the right direction.
Unless you have spent some time in the Bay Area (Silicon Valley), it is hard to grasp how the social infrastructure, culture and proximity promotes inovation. A large part is having a big pool of very skilled talent with both technical skills and business exposure who have delivered significant projects in large companies and are looking round for new challenges (ie. they are bored and hacked off with their current management). Start-ups are an obvious place to look to further their work related dreams to earn enough money to buy one of the big houses in the woods between the Bay Area and the Pacific.
Anyway Dan, what do you and I know? We have only worked at a global level in this industry for many years. One has to be a member of a party, done the election leg work or slimed your way to the top of a quango to have views on technology taken seriously.
You are spot on about non-execs.
I’ll reiterate Ambrose – this is a great piece, partly because it’s so nice to hear a view straight from the coalface.
One of the issues that Dan highlights has proved to be an ongoing issue for Wales. When I was a mid Wales reporter and the old DBRW was building state-of-the-art factories in the middle of nowhere and without businesses ready to move straight in, there were almost-deafening choruses of: “What for?”
This is some way from suggesting we should have sympathy for the politician, but look at what lies before them. At its most simple level, does government give support to already (relatively) prospering parts of Wales, like the M4 and Deeside, or does it make efforts to create wealth in deprived areas?
However, to my mind, it goes a little deeper than this. The Valleys are not the same as the Pembroke Dock area (in fact, the Gwent and Swansea valleys are not even the same), both of them are different from Blaenau Ffestiniog and Penrhyndeudraeth, and none of them are the same as Sennybridge or Rhayader.
When you drill down, not only are you looking at economic legacy issues, but those issues have affected the cultural landscape around them, and have in turn been affected by the culture of the area. So, for example, what works for the Rhondda might not necessarily work for Gwynedd. Why? Well, there’s obviously the language and other cultural differences that are formed by the ethnic make-up of the population and even the hills and mountains thereabouts, as they have in times gone past proven a barrier to trade. But there’s also density of population, incidence of deprivation (there are 41 indicators for child poverty alone), how long the area has suffered economic decline – a hundred factors that make them all different.
So of course, Dan is right. You can’t draw lines on the Welsh map, in rather the same way that the British and the French divided up Arabia after the First World War (and look where that got us). I have hope that the Economic Renewal Programme will help answer some of those issues he raises. Its stated aim is to draw back from micro-management and create the conditions for businesses to grow and prosper. I know people like Denis and Dylan Jones-Evans, and organisations like the FSB, have reservations (considerable reservations, in some cases), and that’s fine, because the plan should be debated. But I do believe we have to give it at least a little time to see if it works before passing judgment.
Every businessman or woman knows that no plan survives its first brush with reality, but that doesn’t always make the plan poor, and doesn’t mean it cannot be improved. Let’s hope our civil servants take heed of the lessons Dan and entrepreneurs like him can provide in improving the ERP in practice.
We understand your points very well. We are based in Cardigan, West Wales which we assume is a properly mapped ‘convergence one’ area. We have been (and are still in) in the commerical software, internet services and web development business for the past 15 years and we know that there is very little, if any, understanding or effective support for this sector from WAG or the universities and, believe me, we have tried over the years to create networks and groupings such as you describe. However, that is the nature of the country we choose to live and operate in and not necessarily its fault. It is very true that we would do (much much) better as a business if we operated close to centres of excellence, education and investment capital (such as are found in Silicon Valley and around MIT) but that assumes that our staff (and ourselves) could cope with that kind of competitive existence (probably not).
As to the brain drain or diaspora of Welsh talent, this will always occur and cannot be stopped. There is a wide wide and fascinating world out there and you’re not going to keep energetic young people here in Wales with nothing to do except fill in job or grant applications all day. When I was younger I did the same as there was no power on earth that was going to keep me for long in Ruthin (or even Pontcanna!).
Great piece.
Having been in Palo Alto earlier this year, the environment you describe is spot on and there is really nothing to stop us doing it here but that is probably another full article for Wales Home.
Your experiences of Convergence Funding projects are not isolated.
However, I do find the fact that “you were immediately turned away because I live in Cardiff” as being slightly anal byb those interpreting the ‘rules’, especially as Cardiff University is involved in a number of multi-million pound convergence funded projects, such as the Low Carbon Research Institute and the High Performance Computing project to name but two.
One would have thought, given your experience and background, that the Software Alliance would have dragged you kicking and screaming to the meeting to add a bit of industry realism to the whole affair.
But that’s the problem when you put form filling, sticking to the rules and red tape before entrepreneurship, which requires a bit of risk taking and initiative.
The bigger question, which you seem to hint at, is whether all this European funding will actually make any difference to the Welsh economy? Again, that is a thesis in itself but I remain convinced that if there were more projects driven and created by the private sector, as opposed to WAG developed initiatives for the private sector, then we would start to close the prosperity gap with the rest of the UK.
To quote those greats of irony, the Fun Boy Three, “It ain’t what you do, it’s the way that you do it, and that what gets results”.
Convergence EU funding to Europes weakest economic regions is an idea to lessen the economic disparities between areas of member states.
For West Wales in particular it is relevant. Their is hardly a business culture operating to any great extent. Tourism and Farming . Civil Servants are always the best off people in rural areas which speaks a thousand words.
A few years ago I looked at the recipients of Convergence funds and they are almost all service/advisory/PC based businesses. Their are few industrial/production firms or applications for funding and this is really what this Convergence funding aims to do, to sow a seed.
Some silly stuff go’s on. Carmarthen velodrome, great old cycle track and Europes oldest, had Euro grant
for repairing concrete sections of track, only half of it is done because money paid out for project manager from Oxford. do you really need a project manager for this when all needs to be done is sledge hammer existing concrete and lay a new bed. simple stuff. ‘No more money left’ (Carmarthen town council) and the thing is half done. The cyclists will still ride over bits of crumbly concrete.
‘Carry on the European Union’!!!! is that WEFO (Wales EU fund office) looks directly out onto the Carmarthen Velodrome
“Having been in Palo Alto earlier this year, the environment you describe is spot on and there is really nothing to stop us doing it here but that is probably another full article for Wales Home.”
“The bigger question, which you seem to hint at, is whether all this European funding will actually make any difference to the Welsh economy? Again, that is a thesis in itself.”
Dylan, we’d be delighted to see either or both pieces, provided you were willing to pen them and have the time and latitude to do so.
I’d like to offer the alternative perspective. Dan’s argument seems to be that the government should focus on building up centres of excellence rather than attempting to spread what seed corn-type support it can offer to that large part of Wales deemed to be in need of special assistance. I’m sure this is right – up to a point. The trouble is that it overlooks the likelihood that, without purposeful intervention to the contrary, such centres will emerge in the places where there is already a good concentration of infrastructure, available capital and skills – i.e the south east and north east of Wales. If the objective is to develop the economy of West Wales and the Valleys, this will clearly not do the trick.
I don’t have any answers on how you square this circle – I have no expertise in economic development – but it does strike me that there is confusion about the goal here. Is it to use public funding to develop the economy of Wales (in which case Dan’s company should be included) or is it to use those funds to develop only one part of Wales (in which case Dan’s company shouldn’t – despite being literally a borderline case)?
Once we are clear about this, we can determine the best way of doing it.
Great comments!
On the subject of SAW and flexibility of the boundary issue I emailed John Gilbey (the Aberystwyth University SAW rep), as soon as I was turned away from the course to say how surprised I was by the lack of flexibility. I also emailed John this morning to give him an opportunity to reply, but so far I’ve not had a reply to either emails.
I actually met with John plus the SAW team during the summer at a University of Glamorgan event and had a good talk with them, specifically about how SAW could help start-ups and not just established SMEs – as start-ups I feel are quite special beasts and need love too! I also stated I would love to be involved in anyway that I could, e.g. to help foster links to some Silicon Valley friends, who I thought might be interested in coming to give talks etc. e.g. people that have worked at places like Google, Youtube, Rockstar Games, Zynga, etc
Something like this could, in a very small and naive way, create something like the Stanford Thought Leaders Seminar, which is sponsored by VC firm Draper Fisher Jurvetson. Every few weeks they get a great speaker to come and talk to the audience and then they make it available to hear online for free:
You can listen to the lectures here: http://ecorner.stanford.edu/podcasts.html
That idea didn’t go down too well either!
I understand that convergence area funds need to be spent on convergence area businesses, but surely turning away companies from outside the convergence area from what is at least partially a networking event is a bit counterproductive.
But then, you can’t expect government administered funds to make sense. I have a company that provides a training service reported by our trainees as being far superior to (and half the price of) the current Assembly sponsored courses. But we can’t get any funding for expansion, (we are talking £10s of thousands) because the Assembly are already spending £350 000 on a study to see if it’s possible to improve on the current training. Now let’s see…
Sorry for the late reply. I’m the director of SAW and I do understand that it would be very, very useful to be able to include Cardiff and the other non-convergence regions in East Wales. We did seek Competitiveness Funding that would have enabled us to do that – without success, for now, unfortunately.
Remember that in order to qualify for CPD training – like Aberystwyth’s iPhone programming course – you can have either a business OR home address in the Convergence region. So, if your business is not in Convergence but your home is (or vice versa) you’re eligible. We can’t break WEFO’s rules, but we will
be as constructive as we can within them.
Two other things:
- we are looking for ideas for workshops and training, so please contact us if want to be involved in doing that, wherever you are. Professional networks are a key aim of the project.
- we did want to make it possible for anybody to attend training workshops, regardless of where they were from, by paying the unsubsidised costs. As well as simply making sense, it would have allowed us to put on courses that otherwise might have been marginal in terms of numbers. But for very long and boring reasons, it just wasn’t practical.
If you want get involved, please get in touch: either directly with me (n.harman@softwarealliancewales.com) or via our website (http://www.softwarealliancewales.com)
Dan – sorry to read you were ‘ turned away’ and can understand the reasoning, however frustrating it is for those in your position. I’m near to Wrexham, another area which falls outside the lines on maps for some past funding, apparently, and came across your blog entry only by way of seeing that Cornwall has used EU funding and then investment from BT to start the ball rolling on a project to make higher speed internet access a reality for people in their county.
I have been watching fibre development (lack of!) for a while now, and was intensely irritated when I read that Middlewich in Cheshire was having it installed, and Bagshott, Surrey, also (both places with under 8,500 lines) while a university town and one of the centres of population here in N Wales, with some 30,000+ lines (split 2:1 centrally: Wrexham North exchange) were not even given a date for FTTC, and initially not even for 21CN upgrade.
I’m pleased to find that in a recent list of some 300 exchanges to get FTTC, Wrexham was finally added (perhaps the fact Sky is offering higher speeds to customers is the trigger – certainly for Middlewich and Bagshott, the availability of Sky or O2 seemed to be the reason for BT getting on with installation), but I’d like to see all rural parts of Wales getting FTTC or FTTP if the cabinet is still ‘too far’ for reasonable speeds (eg 4 Mbps minimum).
Somehow I suspect council staff will be thinking more about the security of their positions than faster broadband connections (which would allow more people to work from home, reducing pollution/traffic levels and using less fuel) than applying for funding from the EU to parallel what has been achieved so far by Cornwall, and then of course, some arbitrary lines on maps will mean that one doesn’t come under the scheme if one comes to fruition. Maybe Rutland Telecom can come to the rescue of more rural areas in Wales (Erbistock with 80 lines may get 40 Mbps service, while BT had at one time quoted 500,000 to provide ADSL for the local people).
Ah well, moan over, I think I may need to move (to Mold, where Be/O2 offers service) so I can get a connection that runs above the 1.5 Mbps I get now (it was a tenth of that until Openreach finally replaced some cable, and could give me no phone or ADSL for days at a time if it rained, so I have a mobile dongle from Three as backup – 15GB for 7.50/month seems a great deal).
OK, chaps, as you were…