Prof Max Munday

Examining the Welsh economy interconnections

Some opening issues for the day

• the nature of the economic interconnections arising directly and indirectly from E4G type activity;

• How far is it possible to explicitly measure the economic outcomes connected to the projects? exploring some practical evaluation issues

• some case material covering results from past studies in Wales

Progress of the regional economy

• understood in terms of improvements in regional GVA and related changes in productivity

• convergence and structural funds• expect projects working with the built &

natural environment to influence elements of the tourism facing economy & to have economic impacts in terms of GVA and employment improvements

E4G might……

• improve skills supply side for tourism in the region• create employment• safeguard existing tourism revenues, stopping leakages• improve the diversity of local offer and perhaps extend

the season;• change the distribution of visitor types: perhaps

encouraging more staying visitors; or changing the nature of average spending patterns in rural areas;

• change the connections between leisure activities / interests and other activities

Don’t forget residents!• A focus on the ‘visitor economy’ in performance

indicators • But projects improving services from the built or

natural environment benefit local communities. • Improved flow of services from the habitat may

mean that local residents do not go outside of the community to spend money

• …..and flow of social and environmental services deriving from project outcomes can spill over into the economic arena (areas more attractive to live in, and perhaps making areas more attractive for new firm location).

Scale of benefits linked to E4G…..

• scale of regional economic benefits linked to project spending and levered tourism is related to the following;

• gross spending of project monies and related employment incomes in reference areas;

• new and safeguarded tourism revenues associated with the improved or maintained natural and man made capital;

• new employment and incomes connected long term to improved natural assets….

Economy wide effects

• Direct + Indirect effects

• What influences regional economy-wide effects?

Regional effects

• direction of spending i.e. how far is project-related spending tied to employment, and what are monies spent on

• what is levered tourism spending spent on• where spending is on goods and services, then what

proportion of these bought within local economy? • also relevant is location of 1st round spending e.g.

even relatively small project expenditures need to be placed in their respective local economy contexts such that a thousand pounds of spending in a remote rural community may have a stronger economic profile than the same amount in a core location

Tourism: directly and indirectly..

All overnight

Daytrippers Total

Trips (m) 9.36m 43.50m 52.90m

Nights (m) 41.25m 43.50m 84.80m

Gross spending (£m)

£1873.0m £1400.0m £3273.0m

Direct spending Welsh goods and services £m

£1489.1m £822.9m £2311.9m

GVA supported directly and indirectly

£1350.9m £716.8m £2067.7m

Emp supported directly and indirectly FTE

44,202 24,816 69,019

GVA per £1m gross tourist spending (£m)

£0.72m £0.51m £0.63m

Thorny issues to think about

• Additionality (MEANS)• Whole project impact or just the European

funded element?• What would have occurred without EU

support?; • Could money have been used more

efficiently • Can outputs be credited to the project

(tourism, weather, currency…)

Other tricky issues

• Double counting

• Displacement

• Gross – DWT – DISP – Adj for DC + Multiplier effects = Net

How big is gap gross & net??

Priority/Measure Number of projects in sample

Total Gross New Jobs for project

Approx. Net New Jobs attributable to Programme funding

Net outcome attributable to Programme Funding over total project gross outputs

P1 M1 Financial support SMEs

4 72 24-36 33-50%

P1 M2 Promoting entrepreneurship

3 2386 348-511 15-21%

P1 M3 Dev. competitive SMEs

5 2651 1370-1948 52-74%

P2 M2 Stimulating ICT use

2 2891 876-1279 30-44%

P2 M3 Dev. of innov and R&D in SMEs

4 1134 417-639 37-56%

All Measures 18 9134 3035-4412 33-48%

Summary

• Economic interconnections can be mapped

• Some difficult and thorny issues to be confronted

• Two examples

• Blaenavon

• Anglesey Fens