SWANSEA Bay could become the world's "software valley", according to Sir Terry Matthews.

City-educated Sir Terry believes that if the region can harness energy and innovation from local graduates, it could become a world beater.

The Newport-born entrepreneur was speaking at the Swansea Business Club breakfast at the Towers Hotel in Jersey Marine.

Wales's first self-made billionaire, he made his fortune with telecommunications company The Mitel Corporation, which he sold to BT in 1985, and he believes that spirit of enterprise could help the region.

He said the business community had a duty to encourage graduates to stay local and invest in and support their ideas and energy.

"There is no shortage of brain power here. It is just about encouraging them to grasp first mover advantage and create deep rooted local companies here," he said.

"Just look at Google. That was only formed 10 years ago by two graduates in a garage with no money. You don't need money or funds, you just need ideas and the desire to work hard.

"In all my successful ventures, I have backed young quality graduates. I have given them ownership through things like share options, and I have encouraged their ideas. You do that and you get a razor sharp focus and huge commitment.

"They generally have no families, and they will work 24/7 for you. That means you can develop products quickly and get them to market quickly. Timing is everything in business."

Sir Terry added that, with his start-ups, he also liked to form a strategic alliance with an established company early on.

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"It means potentially big customers suddenly take you seriously, whereas as a mere start-up you wouldn't get a foot in the door," he said. Sir Terry made his fortune through starting and growing high-tech communications and telecoms companies such as Mitel and Newbridge Networks.

Despite his wealth, he is still starting new ventures both in Wales and Canada, where he initially made his fortune.

In total, he has started 90 companies, and has closed just five of them.

He also built and owns the Celtic Manor resort near Newport, which will host the 2010 Ryder Cup. The building was originally the maternity ward where Sir Terry was born.

He described the Ryder Cup as a huge opportunity for Wales, but also one that the tourism industry and business community must grasp.

"Wherever I go in the world, people ask me about the Ryder Cup, and they know it is being played in Wales," he said. "The tournament has a billion viewers.

"There are now 12 months to go, and, regardless of economic conditions, the hotel is booked solid as a result. This is a massive opportunity for us to showcase what we have and can offer the rest of the world."

When asked if he felt Wales was seizing that opportunity, he said that 12 months ago he felt disappointed.

Preparations and important infrastructure projects were taking longer than he would have liked.

But things have now turned around, he said.

"Some important projects are now finished, and you can see things coming together," he said. "People are painting their houses in Newport in anticipation, for example. I have a good feeling about it."