Mike Hedges looks at the future direction of the Welsh economy
Historically, the Welsh economy was built on coal mining and the metal industries, along with agriculture. We saw a gradual shift as manufacturing became the main source of employment in the post-war period, with Hoover setting up shop in Merthyr (1948), Ford in Swansea (1965) and Sony in Bridgend (1973). All subsequently closed in more recent times, the Welsh economy has come to rely on the public sector.
In this increasingly fractured economy, Wales needs to concentrate its support in key growth areas – the life sciences, information and communications technology (ICT), creative industries, advanced manufacturing and professional services – with grants, incentives and other government help.
With around 10,000 people employed in the life sciences sector, the £100m Wales Life Sciences Investment Fund plays a key role in our economy – boosting business growth, attracting new companies to Wales, supporting job creation and encouraging graduates to enter the pharmaceutical and healthcare sectors.
Professional and financial services, however, are sectors where Wales, particularly outside Cardiff, remains weak. We have a major and well-respected insurance company in Admiral (one of the biggest private sector employers in Wales), but we desperately need to attract and support more high-value and high-wage employment – initiatives like the Enterprise Zone in central Cardiff are steps in the right direction.
Despite its decline, Wales still has a number of advanced manufacturing industries – from the Airbus plant at Broughton to the Ford engine plant in Bridgend. We have seen Welsh government invest in the sector with the Materials and Manufacturing Education Training and Learning scheme, which aims to increase the number of people gaining technical skills throughout Wales.
One key industry that is not geographically constrained and has the ability to generate huge wealth is ICT. In Wales, medium sized enterprises in the sector have performed strongly with a 92.8 per cent increase in turnover between 2005 and 2013. As superfast broadband rolls out across Wales, there is a need to turn some of these medium sized ICT companies into large ICT companies.
We need a national strategy for each high-value economic sector. We will not develop a successful economy on low pay and seasonal work. Thanks to the Labour government in Wales, progress has already been made, but the level of commitment and investment needs to continue if we are to realise our ambition of a high wage and high skill economy.