Surviving the Recession

John Osmond provides a curtain raiser for this week’s IWA inaugural economy conference on making Wales business friendly

The other day I caught a glimpse of how the uneven impact of the recession is affecting neighbouring communities in south Wales. I was making one of my biannual trips to my local jewellers in Penarth, to have a battery fitted to my watch, and got into a conversation with the owner. “How are things going?” I enquired. “You know, with the recession and all that.”

“Well its pretty good here,” he responded. “Holding up pretty well. But in Canton it’s completely different. In fact I closed down our store there at the end of last week.” He went on to explain that while his electronic point of sale (EPOS) system was recording an average £46 spend for every paying customer in Penarth, in Canton it had only been £13. In fact in Canton he was paying out more in his pawn business than taking in as a retailer. And on top of that, he had fewer overheads in Penarth. “I would have had to have a throughput of five times the number of customers through my Canton store to make it as successful as the one in Penarth,” my jeweler said.

In fact Penarth continues to sustain two jewelers shops and despite the presence of Tesco and a recently added Sainsbury, plus the usual rash of charity shops, the town centre is relatively prosperous. Penarth is, of course a large town by Welsh standards, with a population of around 25,000, with about 8,000 having degrees (according to the 2001 census as reported by Wikipedia). On the other hand Canton, on the western side of Cardiff, is less well off. It has a population of around 13,000 and is one of the most ethnically diverse of the capital’s suburbs, with a significant Asian population.

When it comes to surviving the recession the devil is in the detail. At the heart of the challenge is simply making Wales more business friendly which, as it happens, is the theme of the IWA’s inaugural national economy conference, being held at the Parc Hotel in Cardiff this coming Friday.

A high point of the conference will be a discussion between Brian Morgan, Professor of Economics at UWIC and the First Minister Carwyn Jones on the theme ‘Business and Government – Can they do more for each other?’ The First Minister provided a taster in his interview with Andrew Marr on his BBC 1 Sunday programme yesterday, when he acknowledged that the private sector in Wales was too small:

“We have to do more to unleash the entrepreneurial spirit that does exist in Wales. We have to say to people that devolved government works in Wales. We need to make sure that people feel that business can work in Wales as well. Where people have got ideas we have to build their confidence that they can develop those ideas and have the access to capital they need in order to do it. That’s got to be the next stage for us.”

At our conference on Friday Lord Mervyn Davies, the UK Minister for Trade, Investment and Small Businesses and Gerald Holtham, Chair of the Independent Commission on Financing and Funding for Wales will be assessing the challenges we face in getting out of the recession. Chris Rowlands, former Director of the 3i Group and author of the No 10 commissioned study on Venture Capital in the UK will be talking about business access to investment.

And Nigel Roberts, Managing Director of Paramount, David Stevens, Chief Operating Officer with Admiral Insurance, and Graham Morgan, Director of the South Wales Chamber of Commerce will be discussing how we can make Wales more business friendly from the ground up. Altogether, one not to miss. More details can be found on this website. Just click on the Events button.

John Osmond is Director of the IWA.

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