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TOPIC
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The contribution of the legal profession to economic
development against the background of extended powers;
the potential benefits of working together more easily
in a small country.
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AUTHOR
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Nicholas Neal, Executive Director of Land Development
and Legal Services
Welsh Development Agency
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Context
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| 1. |
"Winning Wales", the Welsh Assembly
Government's economic development strategy for Wales,
has as its mission statement : "To achieve a prosperous
Welsh economy that is dynamic, inclusive and sustainable,
based on successful, innovative business with skilled,
well motivated people". |
| 2. |
With that as our destination, let us briefly
examine where we are now |
| 2.1 |
Wales is undergoing its third "industrial
revolution" and in so doing our economy is performing
relatively poorly compared to other UK Regions (even when
the South East of England is excluded from the calculations). |
| 2.2 |
We were the first Country to develop a coal
and steel industry; following their decline in 1960s and
1970s, we were amongst the first to develop low-skill,
high volume manufacturing. For the future we will no longer
be able to compete with South East Asia and Eastern Europe,
and the Agency is concentrating on added value, high skilled
sectors to create a new, third "niche" for Wales.
These include the aerospace, automotive, electronics and
bio technology sectors. |
| 2.3 |
Statistically, with 5% of UK population
living in Wales, we should expect a corresponding GDP
figure, but it is only 4%, i.e. Welsh GDP is only 80%
of the UK average, and we have a huge challenge to meet
the Winning Wales target of 90% of the UK average within
10 years. |
| 3. |
Although Wales has traditionally been a
manufacturing nation, there has been increased growth
in the professional sector, of which Law is an integral
part. Growth in professional services runs along
side high level managerial jobs, and the creation and
retention of more head office functions, and these are
areas on which the Welsh Assembly Government and the Agency
are concentrating. |
| 4. |
Law is already a significant part of the
economy of Wales. Latest figures show that the sector
accounts for 1 % of Welsh GDP, compared with 1.8% for
agriculture, 2.4% for iron and steel (before the recent
Corus announcements) and 3% for banking. |
| 5. |
Apart from the particular circumstances
of the traditional legal practices in rural Wales
(e.g. the geographic spread, reluctance to "modernise",
competition in the conveyancing market) the prospects
for increasing the economic development contribution of
legal services, without extended powers, are good. |
| 6. |
In particular, the investment into the development
of the Welsh economy through the knowledge based industries
of the future, will require increased legal support and
involvement in the "newer" areas of intellectual
property rights, and the issues surrounding e-business. |
| 7. |
There has been substantial up-skilling amongst
the legal profession in Wales, which, combined with a
substantially lower cost base than the South East of England,
provides great potential. In addition, the quality of
law graduates from Welsh Universities is increasingly
recognised, together with the quality of life itself.
Indeed, the WDA is unique amongst the Regional Development
Agencies in Britain, in having a social as well as economic
remit, and our involvement extends to the whole "package"
of providing land for the range and choice of housing,
leisure and retail facilities, as well as high quality
employment sites, and town centre regeneration. |
| 8. |
This up-skilling must be significant in
highly specialised areas such as Compulsory Purchase and
Compensation which are seen as necessary to ensure complex
site delivery within tight time scales. |
| 9. |
The European Commission
is becoming more active in enforcing its State Aids
policy. The net effect of this will be to ensure a "level
playing field" of financial inducements throughout
Europe. In turn, this means the flexibility to offer something
different to potential inward investors will be restricted
to non-financial incentives, and this is where Wales could
make a significant difference. |
| 10. |
In essence, we
have been working hard on defining the Team Wales approach
which can provide distinctive features such as:
• Accessible Ministers
• Attractive Sites
• Skilled, available work force/dedicated
training
• Quality of life
• "One Stop Shop", including
professional services |
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These have proved
successful in securing major inward investment opportunities
in the past. On a practical level, having the powers to
tailor primary legislation, the legal system and institutions
to Welsh needs is bound to increase the synergy of "Team
Wales", its competitive approach, and the range and
quality of services that can be provided. |
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One clear example
of the Team Wales approach was the LG Electronics and
Semiconductor plants at Newport. Led by a public sector
team of the Agency, Training and Enterprise Council, Environment
Agency Wales, Countryside Council for Wales, the "Team"
expanded to include local architects, engineers and planners
employed by LG, who also recruited their legal services
locally. The dynamism and focus of a single team really
made the difference, although sadly no one was able to
foresee the collapse of the semiconductor industry globally. |
| 11. |
Interestingly,
the main focus for attracting foreign direct investment
has moved from the economies of South East Asia to North
America, from where we have had the most success in recent
years. In 2001/2002, 33% of all inward investment projects
into Wales originated from USA. Having grown up with a
federal system they are very comfortable with a tiered
approach to Government |
| 12.
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The Welsh economy is in the
midst of change, but the concentration on high skills,
added value, and business services will provide opportunities
to expand the quantum and expertise of legal services
and their contribution to the economic development Wales
in the future. |
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