THE VIEW FROM THE EDGE

The view from the periphery, or the edge often largely depends on where you stand and how you look at the map, a change of economic focus in Wales is long overdue, perhaps ironically where ever we end up post Brexit may well finally compel us to think and act differently.  

It is clear we cannot go on as we have, our country is literally littered with the tombstone like remnants of failed models of economic development. Most of them having failed to deliver long-term economic benefits and more than a few long-term jobs to our people and our communities.

What is badly needed is the courage to step away from the over centralised state agency dependent model of economic development as applied by successive Westminster and Welsh governments. Successive  Westminster Governments have consistently failed to deliver beyond the short-term for Wales. 

With the crutch of EU regional funding about to be kicked firmly away, despite the weak and wobbly promises from Westminster to the contrary, we in Wales find ourselves desperately needing some fresh economic thinking and action rather than more words.

The older economic models which reduce Cymru / Wales to simply a region (or more ominously simply  the peripheral part of larger cross border regions) where we have provided relatively cheap labour with industries that were heavily dependent on grants for funding just won’t wash or work anymore. 

We need to find other economic models that can deliver long-term jobs and lasting material benefits to our communities and to our country. 

We have been historically over dependent on Westminster or the old Welsh Office or Cardiff Bay waving their magic wand to solve our economic problems, this is entirely understandable considering the nature of our economic and political history, but this simply compounds the error and just won’t solve our economic problems or create sustainable jobs. 

The days of bringing in significant amounts of ‘inward investment’ are over, Westminster has better things to spend its money on in England - Cymru / Wales does not matter electorally (or economically) as far as the Conservatives are concerned. 

Post the CORONA virus and Post BREXIT it’s time to be honest to ourselves and admit that ‘The Union’ as it has been, even with devolution has failed to deliver for Wales. As far as it is concerned the current Labour in Wales government is fresh out of ideas, unless compared to the current Conservative Westminster government. 

We desperately need indigenous home grown businesses (small, medium and larger scale) which will put down roots and stick around when economic times are tough rather than pulling up sticks and bugging out when the grant money runs out and be more able to resist being hovered up by multi nationals. 

We need to develop small to medium sized enterprises or local co-operative industries that could provide medium to long-term sustainable job opportunities and an economy where they can thrive.

Part of the economic mix should include developing and encouraging the co-operative model of economic development. The co-operative model works well in a number of countries including both Ireland and in the Basque country, there is no reason why it should not work well here. 

The Basque cooperative model, as personified by Mondragon co-operative suggests what can be accomplished. If we are to grow local businesses and local jobs we are going to have to create a real Bank of Wales, perhaps using the German Sparkasse and Landesbanken model. 

For too long far too many small and medium sized businesses in our country have been denied access to credit by banks and this has prevented the growth of our private sector.

Our over centralised dividend driven pretty much rootless London based banking model that has been followed in the UK is incapable, indifferent or simply unwilling to deliver or support economic development in our country. 

In Germany, the Sparkasse and Landesbanken operate on a geographical basis, and have developed special expertise in the local industries so that they are better equipped to make investment decisions and should offer a real alternative.

Mondragon a collective of over 264 companies and organisations mostly based in the Basque Country has proven to be one of the more resilient economic success stories in recession-hit Spain. It has a revenue of 12,215 million euros, with 81,837 employees with 15 technology centres in 41 countries and sales in over 150 countries. 

The Basque co-operative may well be the world's largest worker co-operative, it has certainly assisted the Basque economy to try and resist the worst ravages of the recession in Spain. The company was established in 1956, in the province of Gipuzkoa; with a business philosophy built around co-operation, participation, social responsibility and innovation. 

It began small (this may very well be the key to its success) and form the bottom up with a group of workers in a disused factory, literally using hand tools and sheet metal to make oil-fired heating and cooking stoves.

The Cooperative continues to compete on international markets using democratic methods within its business organisation, helps to create jobs, and is committed to the human and professional development of its workers and pledges to development with its social environment. 

Some parts of the co-operative are wholly owned, others are run as joint venture operations. 

Co-operative members as equal co-owners of their own workplaces enjoy job security and individual capital holdings, with an equal sharing of profits on a proportionate basis and an equal ‘one-member one vote’ say in the way their enterprises are run. 

Pay within the cooperatives is strictly egalitarian, with the highest rates payable other than in exceptional circumstances being refreshingly no more than six and a half times the lowest rate. 

The Basque country has Spain’s highest GDP per capita, its richer than even Catalonia and Wales is the poorest nation in the British Isles, and in northwestern Europe. 

We in Wales have much to learn from the example of Mondragon and its methods when it comes generating and retaining sustainable jobs, simply remaining poor (or increasingly poorer) west Britons is not an option. 

There is no reason why the co-operative approach combined with a rich mix of small to medium sized enterprises cannot be used to bring in a community focused upward economic slow burn approach to economic development.

We desperately need something that will not just provide local jobs but real community beneficial sustainable developments which can transform our communities and fundamentally boost our country’s economic potential. 

Perhaps we can take that first important step in May 2021 at the Senedd elections and put the firmly past behind us.