Wales needs to up its game in terms of nascent entrepreneurship and levels of growth capital raised, says the founder of one of Wales’ leading locations for start-up firms.
Speaking at the first meeting in a new season of Cardiff Breakfast Club , Gareth Jones, of Caerphilly-based Welsh ICE (Innovation Centre for Enterprise), said that more people in Wales needed to be encouraged to see entrepreneurship as a career option, particularly with the huge opportunities being created in technologies in areas such as big data and automation.
And he said corporate businesses in Wales also have a vital role to play in opening up their considerable global networks to support the growth of start-ups.
While describing the start-up scene in Wales as “really exciting”, he said the economy was very much on the back foot compared to other parts of the UK.
Mr Jones, who is originally from Llangollen, said: “In Wales there are fewer entrepreneurs per capita, so business growth is slower than the rest of the UK. For some reason, people [in Wales] feel entrepreneurship is not really for them.
“And for those that exist, they get nowhere near the level of investment that other people get [in other parts of the UK], at just half.”
Mr Jones said it was disappointing that so many people were studying to be hairdressers in Wales, compared to those in more technology-focused subjects.
While not criticising those studying hairdressing – he informed the audience that his mother was a hairdresser – he said: “There are more people in Wales studying to become hairdressers than taking up places at the National Software Academy [although he said graduate numbers will grow there] and in areas like cyber-security.
“The idea that young people growing up in Wales see this as the most secure option staggers me.
“There are some very big disruptive technologies on the horizon, which some people are tuned into but which others are oblivious to. But the way I see it, whether you embrace these changes or ignore them, they are coming.”
He described a project to develop the world’s first compound semiconductor cluster in Newport – an initiative being driven by IQE, one of Wales’ leading technology firms – as a particular bright spot that could prove pivotal in encouraging more tech-focused starts-ups.
Mr Jones said: “What IQE is building in Newport, in the first project to be backed by the City Deal, is revolutionary and can be the bedrock of the future of the Welsh economy.”
The cluster has the potential to create a new wave of businesses and 2,000 hi-tech jobs.
And he said while there are institutions on the ground in Wales such as Finance Wales – which is evolving into the new Development Bank of Wales – start-ups need to see raising growth capital in a global context.
Mr Jones said: “Risk capital is not about what is on your doorstep. It is not a raise [securing finance] in a five-mile radius. You have to think beyond just Finance Wales, Xenos or the new Development Bank of Wales.”
And he said part of the problem was having too many sources of business advice in Wales for start-ups and entrepreneurs: “For someone running a business, it is really confusing as there is so much of it.”
He said Wales should be indebted to entrepreneur Anthony Record and by his son Will, now chairman of Welsh ICE, for ensuring the success of the start-up project.
Seeing their former business National Britannia being run down after being acquired by social housing maintenance firm Connaught, Mr Jones said they felt compelled to ensure there was a new wave of investment and jobs in Caerphilly.
“Quite a few people said it would never work and some said it might work, but not in Caerphilly,” said Mr Jones. “Now we have 350 people in 170 companies across three buildings. And the impact on the local economy has been £60m in salaries… creating some exceptional stories [businesses].”
Later this year Welsh ICE will open its first north Wales centre in Wrexham, which in the next two years is expected to create 200 new jobs with an intake of 50 entrepreneurs a year.
Despite a perception of entrepreneurs being young and tech-focused graduates, Mr Jones said: “Most are 35 to 45, have been through two or three careers and recognise that now is the time to do something. And most have gone thorough a traumatic event, like a divorce or losing their job.”
Cardiff Breakfast Club is sponsored by Stills Branding, Blake Morgan, Lloyds Banking Group and the Western Mail.