The Failure of HPC Wales – Deja vu all over again?

High Performance Computing Wales (HPC Wales) was a £40m project established in 2011 to provide a world-class supercomputer facility in high performance computing.

Funded by £19m from European Structural Funds, £10m from the UK Government, and the balance from the Welsh Government, the private sector and universities, it seemed a laudable project given that analysis of large amounts of data is becoming more critical to scientific and commercial research.

Unfortunately, whilst HPC Wales did help some firms speed up innovation for commercial success, a report from BBC Wales last week showed it that had failed to reach key targets for job creation, supporting Welsh businesses and bringing in additional investment to Wales.

Whilst HPC Wales had set itself the aim of creating more than 400 jobs and supporting 550 firms, it only created 170 jobs and assisted 247 businesses. Despite eventually spending £33m, it generated a paltry £3.7m into the Welsh economy.

Unfortunately, HPC Wales seems to be a case of déjà vu all over again. Like the failed Technium programme of incubator buildings that were funded to the tune of more than £100m by the public purse between 2002 and 2006, HPC Wales seems to be another grandiose project that did not reflect the real needs of business and delivered little to the Welsh economy.

Yes, Technium and HPC Wales looked good on paper and even better on powerpoint presentations to government officials. However, they merely continue the Welsh obsession with what Professor Kevin Morgan of Cardiff University memorably described as “cathedrals in the desert”, namely large publicly funded projects that singularly fail to achieve even modest targets to boost economic development and innovation.

Many will question why such funding is not being awarded directly to businesses, and entrepreneurs in Wales will wonder how a cost of £200,000 per job for both Techniums and HPC Wales could ever be justified in the real world.

As pointed out in my Access to Finance review for the Welsh Government, given the dearth of money available to businesses during 2011-15, one can only imagine what the impact could have been if the £33m spent by HPC Wales had instead been given as either grants or loans to high growth innovative firms in Wales with a track record of creating jobs and prosperity.

Given that the average cost per job for most grant schemes is around £12,000 per job, then over 3,000 jobs could have been supported if this scheme had been used more effectively elsewhere. I am sure many of those firms in the Wales Fast Growth 50 that I work with every week would have been delighted to receive such financial support to help expand their businesses.

That is not to say that universities shouldn’t be involved in supporting innovative firms, if business needs drive the aims of the project and full advantage is taken of the knowledge and expertise within academic institutions.

For example, at the University of the West of England, we are currently delivering the Innovation 4 Growth programme that is supporting businesses in the South West of England to develop innovative products, technologies, processes and services. Since 2014, £6.7m has been awarded to 81 businesses, resulting in 511 new jobs – three times as many jobs as HPC Wales for a fifth of the cost.

I have always been a strong advocate of the so-called triple helix approach where government, business and academia work together to support innovative businesses. Indeed, there are some examples in Wales, such as the recent tie up between Techhub, the DVLA and the University of Wales Trinity St Davids, that could bear real fruit in the future.

Yet it would seem that in the case of HPC Wales, government has supplied the money, academia has spent it and businesses have received little benefit.

Following the multi-million pound failure of Techniums and now HPC Wales to suitably help Welsh firms, this simply cannot be allowed to happen again at a time when public funding needs to be allocated efficiently to support the Welsh economy.

That is not to say Wales shouldn’t have invested in a high performance computer to support academic research, and there should be support for this in the future.

However, the main aim of HPC Wales was to support Welsh business and this it failed to do properly. It was essentially like buying a Ferrari but keeping it locked up in the garage for the majority of the year.

The management of the project suggested that this failure to hit targets was due to the economic downturn, although this excuse seems implausible given that HPC Wales operated during a period of sustained economic growth when record numbers of jobs were created elsewhere in the Welsh economy.

So was it because there was not enough demand from the pool of 230,000 firms in Wales, or did the HPC Wales team of advisers and consultants simply fail to persuade enough businesses that this amazing resource could be of value to their commercial interest?

To date, no proper explanation has been forthcoming and whilst the failure of HPC Wales to reach its targets may not be a matter for the Wales Audit Office, there must be a thorough appraisal by the Welsh Government into why, following the failure of the Techniums, another high profile project has spent tens of millions of pounds with little return to the Welsh economy.

More importantly, politicians at both ends of the M4 corridor must ensure that this never happens again if public funds are to be used wisely to support innovation and economic growth.

The Prosperity of Wales

Given the on-going debate about the economic status of Wales, particularly when using traditional but narrow measures such as Gross Value Added (GVA), the recent publication of the UK Prosperity Index by the Legatum Institute makes for compelling reading.

Defining prosperity as both wealth and wellbeing, the think-tank has developed a multi-dimensional measure of the determinants of a good life. It goes beyond GDP as a measure of national success to capture human flourishing.

Whilst appreciating the importance of wealth creation, the index recognises that many of the enablers of, or obstacles to prosperity occur at a far more local and personal level.

Using a broad set of metrics including economic quality, business environment, education, health, safety and security, social capital, and natural environment, it therefore takes a more holistic view of prosperity across 389 local authority areas in the UK.

By region, the South East of England is top of the prosperity index whilst the North East of England is at the bottom. Surprisingly perhaps, Wales is ranked 8th which is higher than Scotland but below Northern Ireland. Indeed, Wales does well on measures such as education and quality of life but poorly on economic quality and business environment.

Within Wales itself, Monmouthshire is the most prosperous county (62nd in UK) whilst next door neighbour Blaenau Gwent (383rd in the UK) is the least prosperous.

But the main finding of the report is the failure of urban parts of the UK to deliver prosperity with the index showing that only 34 of the UK’s 138 urban areas are delivering more prosperity than their wealth would suggest.

For Wales’ three main cities, there are a number of interesting results that should concern the leaders and policymakers in each of these urban strongholds. Overall, Swansea is ranked 192nd, Cardiff 270th and Newport 277th but the more detailed indices show a more complex picture of what is happening.

For example, in terms of business environment – which is measured in terms of variables such as entrepreneurship rate, business survival, broadband speed and superfast broadband access – Cardiff is ranked 43rd in the UK and Newport is ranked 94th.

However, when it comes to economic quality – which measures variables such as unemployment, child poverty, feelings about household income, job satisfaction and median earnings, both cities do far worse with Newport ranked 342nd and Cardiff 354th in the UK. Swansea, which is 216th for business environment is ranked 326th for economic quality.

Indeed, people’s perceptions of these key factors in determining life chances are all important in predicting the prosperity gap within cities. In contrast, rural areas are far better at securing life chances for their citizens, leading to high levels of prosperity even where wealth is sometimes lacking.

Whilst Swansea is ranked 89th for education - which measures attainment at 16, truancy and qualifications - Cardiff and Newport are ranked 252nd and 301st respectively. With respect to health - which measures factors such life expectancy, anxiety, wellbeing, mortality, obesity and health satisfaction – all three cities do badly with Cardiff 242nd, Swansea, 330th and Newport 334th.

The saving grace though, and something which could be a driving force in the future, is the performance on social capital which includes measures such as recycling, volunteering, voter turnout, trust, housing affordability, friendship support and family support.

Swansea is ranked 57th in the UK, Cardiff 95th and Newport 117th, emphasising the sense of community that is found within Wales. Indeed, the report argues that such high levels of social capital (when community-focused) has the potential to be a potent driver of prosperity through real localism

So there are some key challenges from the Legatum Institute study for the three cities in Wales if they are to climb up the prosperity league table in the next few years.

Certainly, it is a mixed picture but perhaps the main lesson is that prosperity is not just about the business environment alone, which both Cardiff and Newport excel in. Whilst that remains important, policymakers in our cities also need to focus their efforts in areas such as education, health and the quality of the local economy to create a more prosperous future for their citizens.

The Importance of Women in Work

As I know from personal experience, women make a real and significant contribution to enterprise and business.

My mother started her own business in the early 1960s when she was 20 years old. When the bank refused to provide the funding to support her new ventures, my great aunt put her house up as collateral to secure the loan.

For the last decade and a half, I have written three bestselling textbooks on enterprise and small business with Professor Sara Carter of Strathclyde University, one of the leading female entrepreneurship academics in the the World.

Through the Wales Fast Growth 50, I have had the honour of meeting some truly inspirational female owner-managers who are making a real difference in their industry including Anna Bastek of Wolfestone, Rachel Bedgood of Complete Background Services, Donna Turner-Kot of the n-ergy group and, of course, the irrepressible Hayley Parsons, the founder of GoCompare.

I am also currently working with Liz Brookes at Grapevine Events where her expertise and experience in events management are the key to developing some fantastic new concepts to promote Welsh businesses.

Given this, I would have hoped that politicians and policymakers across the UK would have, on International Women’s Day, been avidly reading the report from PWC on how women can revitalise economies around the World.

It noted that the UK could grow significantly if the level of female employment here matched those of other countries such as Sweden. In fact, the Women in Work Index - which combines key indicators of female economic empowerment into a single comparable index for 33 countries - shows that the UK has much to do to ensure that women play a major role in today’s economy.

To be fair, the data released suggests the UK is making progress by rising to a ranking of 18th position from 21st in 2014. However, this improvement is not down to any specific policy interventions but is due to a significant reduction in the female unemployment rate due to the stronger economic growth in recent years.

In fact, whilst the UK is slightly above the average, it still lags behind other major competitors in areas such as the share of women in full-time employment and the gender wage gap (which remains at 18.3% as shown below).

For example, if the level of female employment could be increased from 68% to 73% (i.e. the level in Sweden) then the benefit to the UK could be around 9% of GDP (or £170 billion).

In addition, women’s average salary in the UK remains 18.3% behind men’s and closing the gender pay gap would result in an £80 billion boost to overall female earnings in the UK. This would equate to an average pay rise of £5,500 for every working woman.

So what policy lessons are there from the Nordic countries in boosting levels of female participation in employment?

First of all, it is clear that shared parental leave, which was introduced over forty years ago, has had a major effect. For example, parents in Sweden are currently entitled to share 480 days of paid parental leave when a child is born or adopted.

In addition, there is significant state support for childcare which means that the cost of returning to work for mothers is significantly lower e.g. public childcare of up to 15 hours per week is free for children between three and six years old. Whereas childcare-related costs account for a third of household income in the UK, it is only around 5-10% in the Nordic countries.

The result is that Nordic countries have one of the highest female participation rates in the labour force because of a policy approach that balances higher taxes against higher economic participation by females and an approach that looks to put both work and family at the heart of economic policy.

But this shouldn’t only be about government alone. Businesses should also ensure that all employees of whatever gender are fairly remunerated by ensuring fair pay and promotion opportunities are available to all. In addition, the talent of female employees can be fully leveraged by promoting flexible working options and ensuring that women are given every opportunity to undertake roles that are suited to their skills and experience.

However, it would be truly transformational if politicians took the first step in closing the gap in gender inequality for the benefit of the economy.

Certainly, the UK Government would do well to consider how developing policies to boost the number of women in the workforce over the next few years can also have as much, if not more, of an impact as any other measures that he will introduce.

Indeed, if the UK economy is to continue to grow in what are still fiscally challenging times, we need everyone regardless of gender to make a significant contribution to wealth creation.


In February 2016, the Office for National Statistics released its latest data on the UK’s productivity record relative to the other leading G7 group of economies including Germany, USA and France.

It showed that the gap in productivity, measured by the output per hour worked, had actually grown to its worst level since 1990. In fact, productivity is now 18% below the average for the remaining six members of the G7 group of industrial nations in 2014, with only Japan having a worst productivity record than the UK.

As a result, the UK is now 36% behind Germany and 30% behind the USA in terms of our productivity, and this gap is continuing to grow.

The UK Government has rightly recognised that one of the key challenges over the course of the next Parliament is to reverse this long-term productivity problem that many believe is holding back a growing economy.

To date, its approach to this has been the publication of a broad plan that involves encouraging long-term investment and promoting a
dynamic economy.

The document, Fixing the Foundations: Creating a more prosperous nation, includes measures for investing in the economy, developing a highly skilled workforce, building a modern infrastructure and encouraging greater openness and competition.

Whilst this is all laudable, my main criticism is that it remains a collection of vague policies and I am slightly surprised that, given this is clearly the big economic challenge of our times, there is no national imperative to drive forward productivity across the UK – and more importantly to encourage businesses to take this challenge more seriously.

This is very different to what has been happening in one of the most competitive economies in the world.

The Singapore government has established a National Productivity Council to take forward this critical agenda. Comprising representatives from the private and public sector as well as trade unions, it aims to support capabilities and programmes across all industrial sectors and achieve national productivity growth of 2-3% per annum to boost economic growth.

Some of the programmes they have developed should certainly be considered here in the UK, given that there are no firm-specific incentives to help businesses improve their productivity.

For example, the SME-PRO programme ensured that all small to medium-sized enterprises (SMEs) in Singapore took steps to improve productivity growth by increasing awareness, providing specific training and taking action.

There is also the iSPRINT programme that, since 2010, has provided support to SMEs to take up new technologies to boost productivity and growth. This programme not only promotes the adoption of ICT-based solutions that have been proven to help SMEs raise productivity, but also encourages businesses to pilot emerging technology solutions that can transform their businesses eg by adopting innovations in areas such as sensors, data analytics and robotics.

Finally, there is the Inclusive Growth Programme (IMG) which is not only about improving business operations but, more importantly, helps workers to acquire new skills, upgrade skills and be multi-skilled.

In fact, this programme insists that any productivity gains must be shared with employees, and whilst the programme cannot be used to pay for direct wages, it can provide higher wages and performance incentives within those businesses that become more productive as a result of this intervention.

But most important of all is the outreach campaign, Way to Go Singapore, to encourage greater productivity in the Singapore economy.

This emphasises that this a national imperative that should involve everyone – employers, workers and the public – to deliver sustainable growth and improve competitiveness.

Given the importance of encouraging greater productivity here, it is disappointing that there is nothing similar within the UK, especially given that business groups such as the Institute of Directors (IoD) and the CBI are supportive of such measures.

In fact, whilst productivity seems to be the biggest challenge facing the UK economy going forward, it is disappointing that, unlike Singapore, there is no specific approach to improving productivity at a firm level anywhere in the country.

With Wales remaining the poorest part of the United Kingdom, this may well be something that the Welsh political parties may consider as part of their manifestos for the next Assembly election.

Improving the productivity of the nation may not be the most eye-catching slogan on a political pamphlet but it is certainly a policy that can have considerable long-term benefits for the business community in the future.

Certainly, if Wales can emulate another small nation such as Singapore and develop specific interventions that can improve its productivity at a faster rate than other parts of the UK, it could begin to finally close the wealth gap that is holding back our economy.


The  final for Boost Cymru - a showcase for new ideas in Welsh life sciences as well as a platform for developing products or services that could go to market within two years – was held in Cardiff earlier this week.

Entrants for this competition had to be based in Wales, have a relevant life sciences idea, and present that clearly in a brief video pitch to a panel of business experts.

The overall winner - Jellagen from Pembrokeshire - develops non-mamamlian collagen for medical research and regenerative medicine and will receive £50,000 made up of cash and in-kind professional support.

One of these five firms could be the next big thing in the life sciences market in Wales
The Boost Cymru competition was a timely reminder how the life sciences sector – which includes a range of businesses and organisations in the fields of pharmaceuticals, biotechnology, and medical technology, along with those with an agricultural, botanical, environmental and veterinary focus - is going from strength to strength in Wales.

In fact, there are an estimated 350 life sciences companies based here with an overall industry turnover of around £2bn and around 11,000 employees.

Crucially, there is also a pipeline of potential future talent with eight universities having life sciences expertise and around 12,000 students undertaking studies in the disciplines that contribute to the sector.

Not surprisingly, the Welsh Government has been active with support via its £100m Wales Life Sciences Investment Fund managed by Sir Chris Evans’ Arthurian Life Sciences organisation.

This invests not only in life sciences and related medical, pharmaceutical and healthcare companies based in Wales but also in companies from across the UK, Europe and the rest of the world where such investment will bring meaningful developmental and economic benefit to Wales.

In addition to government support, the private sector has also seen the potential in backing new businesses. For example, GE Healthcare has set up an innovation village (which includes laboratories and incubator space) at its Cardiff base to help develop businesses and new ideas.

As a result, firms in the sector will now be able to take advantage of advice from GE Healthcare to turn ideas into products and then market these through its global networks.

But perhaps the most important recent development for the sector has been the creation of Life Sciences Hub Wales in Cardiff to support and showcase the diverse range of expertise Wales has to offer in the life sciences field

Under the founding chairmanship of the late Professor Chris McGuigan of Cardiff University, it brought together for the first time a total of 110 academic, business, clinical, government, professional services and funding organisations to work in partnership to create commercial opportunities.

It currently has 5,000 unique visitors each year and holds around 1,500 meetings and events annually.

Of course, there are still a number of challenges going forward despite this growing support ecosystem for the life sciences sector in Wales.

First of all, whilst it is clear that Wales can benefit enormously from its growth in the future in terms of both wealth and health, there still needs to be more joined-up thinking especially in ensuring that life sciences are marketed effectively in the future.

There are also great opportunities for innovation and development even though there are issues in how, in a reducing public sector funding environment, it keeps pace with new developments such as precision medicine, cell therapies and new treatment.

The good news is that companies from outside Wales are actively looking at the NHS in Wales as a potential region to partner for innovative trials and developments including supporting ‘big data’ health initiatives, an area that will grow exponentially over the next few years.

Despite developments such as the life sciences fund and the innovation village at GE Healthcare, more still needs to be done to encourage more entrepreneurship within the field although there are some great examples across the sector that are growing quickly.

For example, at the recent Wales Start-Up awards, the finalists included Cotton Mouton Diagnostics of Pontypool, a start-up company focused on developing rapid, robust bio-detection systems that will transform the diagnosis of sepsis.

Go2GP of Cardiff, an app developer that gives users the full experience they would get from a GP visit from a smartphone.

And Pontus Research of Hirwaun, which has developed innovative state-of-the-art research systems which allow it to offer high quality R&D services in the area of aquaculture.

The Life Sciences start-up of the year was the incredible Proton Partners International of Cardiff, which is bringing proton beam therapy to the UK to improve the provision of cancer treatment and transform patient care and is set to become a serious global player in this space over the next few years.

So these are exciting times for the life sciences sector with examples of great companies being started, specific financial and business support from the private and public sectors and real opportunities to grow its economic substantially over the next few years.