Examination of Witnesses (Questions 800
- 819)
TUESDAY 18 MAY 2004
NORTH EAST
WALES INSTITUTE
Q800 Mrs Williams: In your opinion
what is the state of health of manufacturing in Wales and do you
think there are disparities between regions within Wales?
Professor Thomas: The state of
manufacturing in Wales, and Joe will come in on this, on heavy
industry from our perspective here as academics at NEWI is that
it is not as robust as it should be with the loss of large manufacturing
industries from the quarries etc, electricity, steel. We never
seem to have had a full recovery on that. We seem to be going
more into smaller industries and SMEs, etc, which have not really
replaced the full manufacturing sector as can be seen with the
difficulties with the quarries, say, five or six years ago in
Wales. Alongside that we have a major problem in North East Wales
with competition from England. We are only 12 miles from the English
border. There are several regions in the north west of England
who have a range of heavy industries and so there is investment
in that area which does not seem to be matched here. We are getting
there but it is catch-up time.
Mr Tatler: I would like to support
what Mike is saying. Traditionally the heavy industries we have
had in the north and south have all gone. If you take the steelworks,
there was one locally at Brymbo; that has finished now. There
was one down at Shotton that is a shell of what it used to be.
We are now going into the SME market. If you look at the SMEs
that are burgeoning in the region, there is a plethora of them.
The diversity of the SMEs that we have in North Wales is amazing
but the problem is getting out there as academics to make industry
aware of the benefits of the links with the university here.
Q801 Mrs Williams: How do you see
the way forward in getting that message across?
Mr Tatler: With the establishment
of the Innovation Centre that Greg alluded to there is a lot of
work going on at the moment to up the profile of the work that
we can do for SMEs. For example, we are in consultation with a
small company on the industries estate down at Deeside. I do not
want to give too much away because we are in confidential negotiations
at the moment, but it is a fabrication firm that wants to produce
pressure vessels, which are like large pressure cookers, for a
well known cereal company and they cannot find the expertise to
help them to design these special pressure vessels. This is an
area that we are getting into now. We do need to have from the
Welsh Assembly a lot more help in publicising what we can do in
NEWI to the SMEs especially so that we can get there and help
them profit from the principality.
Q802 Hywel Williams: Can I sum up
what you have said? It seems that you are saying that there is
a process which you have gone through from being very large heavy
industries to being lots of SMEs. We have got neighbours next
door who seem to have certain advantages and you are saying that
the links between yourselves and the SMEs here could be better
but they are developing. Those are three aspects. What is your
opinion of the health of the sector itself, without looking at
those things? If there was a patient and you were to give the
patient a thermometer, where would they be, giving us your best
estimates? At Broadmoor?
Professor Thomas: I suppose I
had better say that I am a Professor of Mental Health. Convalescing
would be my diagnosis. They have had a serious illness and there
has been adequate treatment, although sometimes the treatment
was worse than the illness in certain cases, and now the patient
is in recovery stage but needs a lot of help and rehabilitation
if you want a medical analogy. We need to get more economic activity
amongst the population at large. There are pockets of higher unemployment
than others across the population of North Wales. There is rural
sustainability, there is the possibility of renewable energy as
a manufacturing base in North Wales. There is also paper manufacturing
using renewable energy. We also need to look at the number of
people who are in long term unemployment who were previously in
employment as opposed to the school leavers who are coming into
that. They need retraining. Many of them were manufacturing workers
in labour intensive industries who now need retraining for the
hi-tech industries, service industries and SMEs. It is that sort
of treatment. They need a good dosage of retraining investment
in the existing population.
Mr Tatler: Retraining is the key
to the SMEs in the locality, especially in North Wales. One of
the problems that we find is that the market we have here could
eventually be overtaken by the markets abroad. For argument's
sake let us look at the Chinese market. There is no way from a
manufacturing point of view that we would be able to match the
volume that they can produce, so what we have to look at is matching
them in a much smarter way by giving value added and looking at
extra design. As a thumbnail example of this, we have links with
a very interesting company down the coast which manufactures equipment
for the health care sector. They produce an item which costs £25,
for example, to produce and sell. That is with a very slim margin
of profit. The same item could be brought in from China for £7.
It does not take much imagination to see that before long if we
are not careful that will dwindle their profit margins, so they
have to be smarter on their designs.
Chairman: That is a message we have been
hearing round about.
Q803 Mrs Williams: What statistical
data is available, either from universities or from central government,
to monitor the health of manufacturing in Wales?
Mr Howard: We have some statistics.
For example, we found some statistics about the review you are
currently undertaking, where it talks about pockets of good growth,
for example, in transport, in areas of poor growth like electricals,
so we have quite a few business statistics for you.
Professor Thomas: We looked at
unemployment levels and economic activity and we have some statistical
tables available.
Q804 Mrs Williams: What is the source
of these statistics?
Mr Howard: This one is the Welsh
Economic Review, written by Cardiff Business School in the
autumn of 2003. We also have some articles written about the Merseyside
and North Wales—Local Government Must Bridge the Competitiveness
Gaps, and also EU Funding is a Key Issue in an Economy
Which is to Close the Productivity Gap with the Rest of the UK.
The former was the Merseyside and North Wales November 2002 and
the other one was Refocused on Opportunities for Growth in
the National Assembly written by G Rickard, and there are
about eight others as well.
Q805 Mrs Williams: Which is the most
recent of those you have mentioned?
Mr Howard: Autumn 2003 is very
recent. December 2003 is another one showing the productivity
gaps between Wales and the rest of the UK, focusing on Merseyside
and Flintshire, and we have got the Flintshire Moving Forward
document as well, the strategy for 2003 to 2008.
Q806 Chairman: Do you have anything
from the Office of National Statistics, the UK one? A lot of those
are academic and I think you mentioned one from the Welsh Assembly,
but is there anything from the UK which would serve to inform
us on that?
Mr Howard: We may not have one
handy but I can certainly find one for you.
Q807 Chairman: We can find it. I
just wondered whether you had a copy.
Professor Thomas: We use a range
of data. The statistical data we get from the National Office
will come through. We use them normally in teaching and lecturing
but we use them as well in planning and directing entrepreneurship
and we also get things like the rural regeneration plan from Flintshire;
there is also Wrexham. We pick all those kinds of things up, and
we have regular contacts with the Welsh Assembly. The movement
of labour population in public service on is a good indicator
of the economic health of a country in that there is this dichotomy
that if you have got a good economic base with high unemployment
you will have a lot of staff transfer out of public services,
whereas if there is low unemployment and a poor economic base
you have staff staying in the public service. At the moment we
are in the state of a lot of staff beginning to leave public service
which would indicate that the overall general health of the economy
at the moment is quite good. It does not do public services any
good though.
Q808 Mrs Williams: There is a balance,
is there not, to be struck between attracting foreign investment
and encouraging indigenous manufacturing. Do you think that Wales
has the right balance?
Professor Thomas: Personally,
no. We could do with more links with international companies.
In our own area, for instance, in polymers we have formed links
with Japanese companies that have settled in North Wales who are
very interested in knowing optics. There are some good partnerships
that we can develop, particularly with Japan who import a lot
of raw materials and then export finished manufactured goods.
If you take Joe's point, the advantage we have is in design, in
development, it is in exploitation of new research, it is in patents.
Those are the areas where enterprise and innovation can help the
Welsh economy. Then you have the East European countries coming
in now, and Turkey, which has a huge population, so there are
countries around the world which are developing their own manufacturing
base, who have a cheaper labour base to deliver those goods. As
Joe says, we could form partnerships with those and either have
offshoot bases in North Wales where we can help them with development,
or we have bases in those countries now where we can help with
development.
Mr Tatler: This is probably one
of the areas that we could move into quite easily in the design
market. As Mike said, we can link up with some of the newly emerging
countries that have joined the European Community and some of
the emerging countries further abroad as well. What we have to
remember is that we have on the doorstep in North Wales probably
the most successful aeronautical company in the world now. The
investment that they made in that company of several hundred million
pounds, in Broughton is phenomenal. That is the world leader now.
It has overtaken the Americans. These are the types of things
which are on our doorstep and as part of the Welsh strategy we
should be building on that and trying to attract more industry
like that into the principality. We have the expertise in Wales,
there is no doubt about that. What we need is help from the Assembly,
government, the WDA, people like that, to exploit it.
Mr Howard: I would support what
they say in that there is a balance, is there not, between creating
more Welsh entrepreneurs indigenously and then the balance between
external foreign direct investment? There are areas, as these
gentlemen have said, that we can develop and work more on. Joe
mentioned the EU enlargement. We have got Poland, Germany, Salesia
and we see that as a big opportunity to access new markets and
make new collaborations. We are quite positive on new developments.
Professor Thomas: There is a spin-off
for the Welsh economy in that if we get in particular students
from abroad they will be spending their money here, but there
are other spin-off industries as well in linguistics in that people
will require more language courses. You can look at technical
language use with engineering and we are working with the French
on that as well as economic language use. There are lots of spin-offs
that would help the economy locally.
Q809 Mrs Williams: Can you tell us
how this compares with other parts of the UK?
Professor Thomas: We are not as
strong as other parts of the UK. If I talk to colleagues in other
universities, particularly the large ones, Nottingham, Leeds,
some of the London universities, they have huge investments with
other countries abroad. Some have had a long partnership with
the Tiger economies when they went through their inflationary
burst so that they suffered economically there, but in terms of
size and activity and investment we lag behind. We are in the
business of catching up so we have plans to do that. It is not
as if we are complacent about it. Our view is that North Wales
could be the best in the UK within 10 to 12 years.
Mr Howard: Professor Thomas mentioned
the big projects. The North West Development Agency, for example,
is investing millions in large collaborative projects at universities
and the WDA is very good and they have done an excellent job for
us but there is perhaps more scope for that. Professor Thomas
also mentioned the Tiger economy. In Ireland where they do a lot
of match funding there is a lot of readily available match funding
that allows entrepreneurship and innovations in manufacturing
to grow and prosper.
Q810 Hywel Williams: I wondered what
was the perception of universities in other countries of the potential
links that they could have in the UK in general. One is aware
that it is London, Oxford, Cambridge occasionally which are better
known. Are business people who are thinking of investing or forming
links aware of North East Wales and Wales?
Professor Thomas: We do need the
help of central government departments in that. For instance,
we are making very strong links with China here in North East
Wales and they are very keen to work with us, but one of the things
they have said is, "You are not on the British Council list
of educational institutions in the UK". However, the University
of Wales has a fairly good reputation worldwide. People do know
of the University of Wales and we know with our links with American
universities like Washington and Georgetown, where we are running
modules with them, they do know of us. The difference in other
countries is that the two-way thing. If you look at some of the
universities, for instance, in China, there are three tiers of
universities in China, only one of which matches the UK's definition
of a university. One other category would be defined in the UK
as a further education college, so you have to be careful how
these partnerships are linked. My view is that if we are linked
with the universities abroad, for example, the University of Wales
is behind that, they have their own contacts with business employers
and that is how we get into their industrial markets. I would
not say that the University of Wales is in the shadow of any other
institution in the UK. The Oxbridges and so on are all known.
If you go to America and say you are from Manchester, they will
say, "Is that anywhere in England?".
Mr Howard: That is quite a funny
story. When I was working in UCLA in the 1980s and 1990s and I
was searching out the best degree in aquaculture, for example,
I found that two of the best universities in Europe were Stirling
and Bangor, so I left my job on a Wednesday night and the next
thing I was in Wales and I have never looked back. There is a
perception abroad that people often do not remember where Wales
is, but there is a job we can do to get Wales on the more internationally
renowned map. I am an example of, having found you out, I came
and stayed. It is fantastic.
Mr Tatler: What we have done in
the last few years in NEWI, especially on the engineering side,
is that the quality of the academics that we have managed to attract
do want to come to NEWI and to engineering is amazing. We have
some colleagues who have helped us break into the Chinese market.
We have colleagues who are over-enthusiastic for the work that
we do here. The next area we will be looking at from an engineering
point of view will be the Russian market. We have a really excellent
Russian academic who will be helping us move forward into that
area.
Q811 Hywel Williams: You are talking
about your success overseas. How far does your good names overseas
match any assessment that has been made of you in terms of research
or in terms of star ratings? Are you better than your ratings?
I am sure you are.
Professor Thomas: We think so.
Q812 Hywel Williams: It is a question
as to how sensitive the assessments of institutions such as yourselves
are and how money is then diverted to you or not.
Professor Thomas: We think that
now the focus on Third Mission activity, widening access, entrepreneurship,
innovation, will help and institution like NEWI. If you take the
research assessment exercise we do not do well on it. We are small,
we only started going into the RAE in the last round, where we
did well. In chemistry we got three A's. In other areas we were
not submitted because we were too small. We have now got strategies
in place for the next RAE and our aim is to get up the table and
to keep fighting for that. There are other tables that industrialists
probably do not look at. For instance, we are probably third or
fourth best in the UK for widening access to students. We match
any other ones in Wales for that. We are also third in the UK
for the number of students who complete programmes here and who
carry disabilities of one description or another. In my area about
a quarter of our students, in health, for instance, carry some
sort of disability, like dyslexia, but they still complete the
course. We have a 98% employment rate. If you push those to local
businesses and industries, if they come here for training then
they will exit with the awards as well, which is quite important
in terms of retention of links.
Mr Howard: I would support that.
We have noticed another in Britain that has a widening participation
agenda, and that is HMC in Oxford. That is one of the main reasons
why we linked up with them. We do joint teaching of entrepreneurship
with Oxford University and that reinforces what Professor Thomas
has said about our strength in participation.
Professor Thomas: In water polymers,
for instance, and hydro colloids, we have developed a master's
programme specifically for the international market through the
Japanese companies and the GO Phillips Centre We have here. Those
students will be coming in so we are beginning to get our name
known in postgraduate education as well.
Mr Tatler: In engineering we have
never been really active in in research but now in the last two
or three years with the academics that have come in we are moving
very fast on research. We are building up expertise in specific
areas. One of the areas we would like to lead on in Wales is aerospace.
Aerospace from the Welsh perception is 40% of the UK market and
that is what we do in Wales. We do 40% of the UK market. Let us
make no bones about that. We have Airbus, DARA, we have a plethora
of small SMEs that do this. What we have to do in Wales is collaborate
with all the HE institutions and the FE institutions to ensure
that we can have a world class aerospace academic community and
we have set up for the first time all the Welsh institutions,
both HEIs and the FEs together, into an academic forum for aerospace.
The WDA are involved in this as well and next week at Newtown
we have the third meeting and we are going to put forward a bid
to HEFCW to fund this consortium and the idea is that we have
the Cranfield of Wales that will match anything in the world.
Q813 Mr Edwards: What would full
university status here do for what you are talking about?
Professor Thomas: It will mean
that we have a badge of recognition for our own aspirations. We
consider ourselves to be a university. We are run like a university.
We need the external agents to recognise that. We are pleased
that we will hopefully be submitted shortly for degree awarding
powers, so we need that badge of recognition. It indicates maturity
for us. It indicates that we hold our heads up amongst our academic
colleagues elsewhere but we know that they go to the league tables
and we know they look at badges of recognition, so that helps
us. It will certainly help in particular if we get help from HEFCW
to raise our ceiling to get more students in, particularly international
students. It will also help in the business community, so this
is very important for us. We also think it helps North East Wales
as an area. We are not failing to push for city status. We need
another city in North Wales, so we think having university status
will help that in the long run. It will also help us compete with
the English universities. Bolton has come through, Chester have
come through, and they are all within 50 minutes of us, so we
need to be able to hold that competitive edge. It is very important
for us to get that.
Mr Tatler: If you speak to the
students, although they come in to a higher education institution,
they will tell you that the experience they get is as good as
any in the universities in the country. When we go out into industry,
once we have spoken to the industrialists they realise that they
are not just talking to the technical college down the road but
to people from a university background.
Q814 Mr Edwards: Can I ask about
manufacturing now and Wales's manufacturing position? Wales has
to compete with manufacturing both within the European Union and
outside the EU. What do you think Wales should be doing more of
to ensure that it is successful in that competition?
Mr Tatler: The way we have to
move forward is on the design and enterprise element. There is
no way that we are going to be able to compete with the volume
market, as I explained previously in the example of the company
which is on the coast. We have to be smarter, we have to be able
to offer training facilities so that we have a flexible workforce
that can be adaptable to change. That is the big thing we have
to be able to do in the manufacturing market. It is like these
fish that we see work: they all go in one direction and the next
minute they have to change. We have to be able to do that. That
is one way in which we could help the industry achieve that, by
training.
Professor Thomas: If you take
the full gamut from heavy industries and engineering technical
and other areas as well, Wales is in a very good position to fight
for a position worldwide in nanotechnology. There is enough expertise
in Wales to look at, for instance, genetics. There are two branches
of nanotechnology. One would be in Joe's area of computers and
engineering. The other is in genetics and proteins. You will read
a lot in the press and technical journals about the genetics research.
That is already outdated. The new research is in proteins and
that is nanotechnology engineering in a different sense. Wales
is in a very good position to deliver that, as it is in sports,
tourism and health relates issues. We can be very strong in those.
I do not know whether you know this, but in NEWI we have, as you
can see around you, a very strong arts and cultural centre, we
have a working animation centre, we have a sound studio and a
very good employment rate for our students who come out from NEWI.
There is always the opportunity to build up an arts, cultural
and media industry in Wales. We have already got BBC Wales, we
have got S4C, etc. We can build that up in film studios and SMEs.
The potential is there certainly for us to be a strong industrial
competitor across the whole of Europe in these areas.
Q815 Mr Edwards: Are we disadvantaged
in Wales by being outside the Eurozone?
Professor Thomas: That is a difficult
one to answer. I would say yes in the sense that with the new
countries coming in we are still part of Europe and we follow
central government in that sense. I do not want to get political
about it. For us in education the difficulty is that Europe is
considered home. International students for all higher education
institutions in the UK is outside of Europe, so from an academic
point of view there are disadvantages anyway in being part of
Europe. It would be easier if we had a funding regime inter-European
Community that allowed people to recognise that taking students
from Italy is not that much different from taking students from
East Africa or China.
Q816 Mr Edwards: You have mentioned
the accession countries in the European Union and what impact
that can have on higher education and opening up of that market.
What is the impact of the new countries coming into the EU on
manufacturing in Wales?
Professor Thomas: I saw a statement
from the North West Development Agency in England about a year
ago. They had carried out a survey of local businesses in the
north west in which they asked what would be the impact of that,
and they said that their immediate concern was for bilingual workers,
and I would support that. As Wales has a bilingual policy it seems
to us that we have an advantage already in that.
Q817 Mr Edwards: Does anyone else
wish to comment?
Mr Tatler: When you look at the
numbers of foreign students that come through the doors of the
institution and by the time they have been with us two or three
years they go back to their countries fully bilingual. We are
at a disadvantage, there is no doubt about that.
Q818 Julie Morgan: I am going back
to links with industry. We have already touched on this but your
paper highlights your "excellent professional and commercial
contacts" that ensure that students are able to meet the
requirements of industry. How do you set about those links and
how do you make sure they are kept up to date?
Mr Tatler: I think giving an example
is the best way to answer this question, and the example is with
the premier industry in the area, Airbus. A number of years ago
now Airbus used to send HND students to us and then for some reason
the policy was that they stopped recruiting a technical base.
They found that that was a bad mistake, so they decided they had
to start up the HNC/HND, route again. Their first port of call
was obviously to come to us. We had long negotiations with Airbus
and we have now got an excellent relationship with them where
we have HNC students and degree students coming on to the courses.
We have a liaison officer who goes in very regularly to speak
to the training partners.. The Managing Director of Airbus is
a Fellow of the Institution. We have very regular meetings with
them to keep our finger on the pulse. In fact, we have now written
a foundation degree. We have been in consultation with them and
they are so pleased with the work that we do that we are now producing
a foundation degree for Airbus at Broughton to do this. That will
be written not from the pure academic point of view. It is going
to be written as a partnership between Airbus and NEWI where the
engineers at the chalk face, if you like, will be helping us write
the course for them. A spin-off that is that they are flying us
down to Bristol to speak to the Filton factory which is the main
research and development base to show them how we can interface
with industry and how they should be doing it now at Bristol for
their apprentices. Hopefully they are going to take our model,
if you like, so again we can see that we are going over the border
into England and taking our expertise there.
Q819 Julie Morgan: Do they pay you?
You talked about the degree course. Would they support their staff
to go on a degree course here?
Mr Tatler: Oh yes. The company
are very good on that. They give them time off and they pay them
and if they need extra time off for extra tutorials or study time
they support them. It is a very good scheme that they have. What
it has to do, however, is fit into the business plan for each
of the little elements that make up Airbus. That is the way they
work.
Professor Thomas: It is a bit
like a cobweb all over NEWI, our links with the local communities
and businesses. I have made a list. For instance, we have a lot
of links with sports industries. There are local authorities,
professional bodies, there is Bala White Water. In humanities
and arts we are involved in local societies in public lecture
speaking and so on. In forensic science we have good links with
the North Wales Police. There is a series of professional programmes
in business that are run like a professional body. In sciences
we have links with Chesham Chemicals. In arts there are local
exhibitions for students and there are also exhibitions here on
site where employers come in and see the work and that leads on
to employment. In health we have 57 full time health professionals
here every year for a one-year full time programme. On top of
that we have got things like secondments. In my area last year
we seconded an academic member of staff to Powys Health Authority
while the manager there came here for six months. We also have
joint appointments with lecturer/practitioners, sessional speakers.
We then formalise it where each area has to meet one academic
term with local business partners that we have identified to help
us and guide us. We would argue that we are very well entrenched.
We cannot have an ivory tower approach to this.
Mr Tatler: I would support that
last statement that Mike made about the ivory tower. This is something
that we at NEWI do not believe in. We are a very practical type
of university. One of the things that we are doing at the present
time is that there is a thing called the Royal Academy of Engineering
and that allows academics to have secondment into industry. We
are hopefully having at least one with potential other academics
being seconded into local industries who will feed into not only
the courses but also set up centres of excellence that we want
to strive for in engineering.
Mr Howard: There was a recent
survey in the North West Development Agency that companies wanted
co-ordinated support and access to support, so with that in mind
we have also set up with the WDA and with Knowhow Wales some networking
events so that we can get academics together with companies to
bridge that divide, and that works very well. In our first two
meetings, the second of which was held at Airbus, we had 180 companies
attend. I did the first talk on negotiation after visiting Harvard
University last year and then we had Warwick International talking
about six Sigma. We also had digital media networks, where those
sectors and clusters can work with companies and our academics
here and that is funded from Cardiff. We are also re-launching
the employability survey here at NEWI which tries to point out
which curricula are adding to the employability of graduates so
we can upskill them. We have new subject sector boards that are
looking at all of our curricula to make sure that people are employable.
We have just won a £315,000 e-learning bid and we are leading
that project on behalf of CUNW. Part of that initiative is to
meet the needs of businesses and their e-learning needs. We have
incubator units as well where we try and help companies that way
and keep our links current. We have a series of job shops for
continuing professional developments and a whole series of placement
schemes that we put in companies. One final example is that we
had 99 students on one scheme over the last two years and 14 of
them set up their companies afterwards, so we are linking at all
levels.
Mr Tatler: I want to pick up on
something that Huw said about how do we support industry to go
forward and be more competitive. One of the things that we find
with SMEs because they are so small is the difficulty of allowing
the employees time off to come to study. The only time that they
can probably come would be in the evenings and if you have been
working all day it is very tiresome to come and do rigorous academic
work. One of the ways forward, and I believe that this is something
that we really need to grab hold of if we are going to develop
manufacturing and engineering industry in Wales, is to take hold
this e-learning E-learning has big potential for small industries
who cannot allow their employees time off to come to retraining
but with good quality packages, and again the WDA are interested
in this from an aeronautical point of view, e-learning is a way
forward that we can develop as an academic community to help the
SMEs achieve the standard of expertise that they will need to
fight off the third world countries.
| 
