Page last updated at 06:55 GMT, Friday, 23 January 2009

Firms 'must re-skill' in downturn

warehouse scene
Welsh firms are urged to boost training for staff as a way out of the recession

Wales could be well placed to come out of the recession faster than other parts of the UK, if firms and workers boost their skills, says an economist.

Prof Kent Matthews, of Cardiff Business School, said the outlook for Wales in the recession was "grim" but its public sector spending would be a "cushion".

He spoke at a conference assessing what skills Welsh employers are looking for.

But one boss said the number of school leavers in Wales unable to read or write was "the elephant in the room".

Tim Tindle said his light engineering firm had interviewed around 1,000 people as part of relocating to Wrexham, north Wales, from sites in London and Germany, but found that some were unemployable because they could not read or write.

He said: "If the schools teach people to read and write and add up, we can give them the training they need.

The short scene is grim - Wales and the UK is in line for a long "U-shaped" recession
Prof Kent Matthews, Cardiff Business School

"We have these [skills] conferences but, if they can't read or write, for what? It's the elephant in the room that no-one is talking about."

Around 350 firms, half of them with 100 or more staff, are attending the Wales Employment and Skills Board (WESB) conference, which opened on Thursday, as the UK was formally declared to be in recession.

The assembly government-sponsored event was designed to pass on to ministers the views of employers on how skills training could put Wales in a stronger position when the economy recovers.

Prof Matthews, the Sir Julian Hodge Professor of Banking and Finance at Cardiff Business School, said Wales' manufacturing sector, at nearly 18% of the economy compared to England's 13%, needed to use the downturn as an opportunity to re-train workers.

'Downward trend'

He said the plunging pound should make it easier for firms to export manufactured goods and firms would be better placed to respond if they increased staff skills and training.

Tourism should also benefit from sterling losing its value against other currencies, while Wales' public sector spending, greater as a proportion of its economy than the average for the UK, would also give it a "softer cushion" as the recession went on, he added.

He said: "The short scene is grim. Wales and the UK is in line for a long "U-shaped" recession. Wales has a softer cushion and the potential for a faster trajectory out, with the depreciation of sterling."

The conference was introduced by WESB chairman Sir Adrian Webb. He said: "The Welsh economy has been significantly underperforming for some time. It has been on a downward trend compared with the rest of the UK for some years."

Iraqi-born entrepreneur Ali Anwar said Wales was increasingly being recognised abroad as a country in its own right since devolution.

'Own language'

He said Welsh firms should look to increase their trade connections with the so-called bric economies - Brazil, Russia, India and China - and to highlight its heritage and the Welsh language to do so.

He said: "The obvious place where Welsh is likely to be spoken is Wales and that can give employers an edge in increasing their customer base. All nations are unique but Wales is more unique because it has its own language."

A Welsh Assembly Government spokesman said: "Improving skills at this time is now more important than ever and improving basic skills is at the heart of all the Welsh Assembly Government's education and training policies from the groundbreaking Foundation Phase to 14-19 education.

"On top of this, our Basic Skills Strategy aims to raise the standards of reading, writing and mathematics to help improve people's skills and career opportunities."

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