From
Past to Present – a look at the future direction for the Welsh Economy
By
Mike Hedges AM – Labour Assembly Member for Swansea East
Historically, the Welsh
economy was built on the coal mining, the metal industries (especially steel),
along with agriculture. We saw a gradual shift in the main source of employment
in the post-war period with the boom in the number of inward investment manufacturing
factories setting up shop in Wales; this included the establishment of Hoover
in Merthyr (1948), Ford in Swansea (1965) and Sony in Bridgend (1973), with all
subsequently closing
In more recent time, the Welsh
economy has also relied on the public sector, with a number of government
services being relocated to Wales, such as the Royal Mint in Llantrisant, the
DVLA in Swansea, Companies House in Cardiff, and the National Statistics Office
in Newport.
If Wales is to have a
successful, vibrant and thriving economy, we need to concentre on key growth
areas and support those industries with grants, incentives and other government
help. Although everyone will have different ideas on which sectors to support,
it’s my belief that we must concentrate on supporting and nurturing the life
sciences, ICT, creative industries, advanced manufacturing and professional
services.
With around 10,000 people in
Wales in over 300 companies employed within the life science sector. The £100m Wales Life Sciences Investment
Fund, supported by the Welsh Government, is a key element in the drive to boost
our economy. We’ve already seen the fund play an integral role in business
growth by attracting new companies to Wales, along with supporting job
creation, encouraging graduates to enter into employment in the pharmaceutical
and healthcare sectors.
The evidence also tells us
that businesses in the life sciences sector can grow very quickly in a global
market, with the rewards for success being huge. This means that a small number
of successful businesses in the life sciences industry - compared to other
sectors – have the power and potential to generate economic value for Wales and
creating well-paid jobs.
In the Welsh creative
industries sector, we have the BBC studios in Cardiff Bay, a vibrant animation
sector particularly for children, with notable programmes produced in the form
of Super Ted and Fireman Sam. More recently in my home town of Swansea, we have
seen the opening of the Swansea Bay Studios, on the site of the former Ford
plant on Fabian Way, where the internationally acclaimed Da Vinci’s Demons was
filmed and produced.
In addition, Pinewood Studios
– the film company responsible for the James Bond franchise – also has a home
in Wales, with an impressive studio complex.
Professional and financial
services are however sectors where Wales, particularly outside Cardiff, remains
weak. We need to develop our professional services and use the flourishing
university sector to generate employment in this area. In the 1970s and 1980s,
Swansea University was at the forefront of finite element analysis, yet Wales
generated very little benefit from it. Professional services in finance and
engineering can generate high salaries and also produce clusters of related
activity. 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 in the financial
sector. One initiative to boost the finance sector is the finance enterprise
zone in central Cardiff.
Despite the decline in
manufacturing Wales has seen over the last fifty years, our economy still has a
number of advanced manufacturing industries. This includes the Airbus plant at
Broughton, the Toyota plant in Deeside and the Ford engine plant in Bridgend.
We have also seen Welsh Government investment into the sector with the
Materials Manufacturing and Learning scheme, led by Swansea University, 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.
There is a tendency for ICT companies to cluster together, not just in Silicon
Valley in California, but also around Cambridge University. In Wales, medium
sized enterprises in the sector have performed strongly with a 92.8% increase
in turnover between 2005 and 2013. There is a need to turn some of the medium
sized ICT companies into large ICT companies. We know that ICT is a high paying
sector and that superfast broadband rollout across Wales is making it possible
for ICT companies to develop across Wales.
With the quality of ICT
graduates being produced in the Welsh universities, it has to be a severe
disappointment that Wales has a lower proportion of its population working in
ICT companies than the rest of the UK. If we are to make Wales an obvious home
for such ICT companies, then we need to look at providing the same support that
has been available for the life sciences sector.
Developing an economy is about
developing and promoting high-value economic sectors. We will not develop a
successful economy and high GVA on low pay and seasonal work. We therefore need
a national strategy for each of these targeted growth sectors. Thanks to the
Welsh Government, a strong level of progress has already been made in these
growth sectors, but the level of commitment and investment needs to continue if
we are to really realise our ambition of producing a high wage and high skill
economy
