Designing the Conditions for Prosperity

The Cardiff Capital Region (CCR) offers a quietly instructive view of how modern economies actually grow.

Its investment approach rests on a simple but often overlooked principle: public capital should behave more like patient capital, and when the state takes risk responsibly, it should also share in reward responsibly. The Evergreen Investment Framework embodies this logic. Returns are recycled, not extracted. Success funds future success.

This is not ideology. It is institutional memory applied to finance.

What makes the model work, however, is not the mechanics. It is the culture beneath it. Over time, CCR has built something intangible but invaluable: trust. Trust between local authorities that might otherwise default to parochialism. Trust between public bodies and private investors who know commitments will be honoured. Trust between academia, business and government, allowing ideas to move from laboratory to market without losing momentum.

Nearly a decade of experience shows that when ten local authorities are willing to adapt together and respond together, lines on a map matter less. Making a region investable becomes a positive-sum game rather than a contest for diminishing resources.

Trust rarely features in economic textbooks, yet it is foundational. Where trust exists, transaction costs fall, decisions accelerate and collective intelligence emerges. Where it erodes, systems compensate with process, paperwork and paralysis.

This matters because the modern economy is too complex for any single institution to control. Growth now depends on what might be called a collective brain: a system where diverse perspectives interact, challenge assumptions and converge on better decisions than any one actor could reach alone. The CCR experience shows this does not arise spontaneously. It must be designed, nurtured and protected. Structural reform and political cycles must not be allowed to kill long-term investment momentum.

At its core, this is about investability.

Investability is not about tax gimmicks or branding exercises. It is about whether a place can credibly answer three questions investors ask, often subconsciously. Is it connected? Is it competitive? And is it resilient?

Connectivity is more than transport links. It is institutional. It is whether government speaks with one voice, whether sectors collaborate rather than compete for diminishing resources, and whether data, capital, talent and ideas can move freely across boundaries. Physical infrastructure is merely the visible expression of something deeper: coordination.

Competitiveness, meanwhile, is no longer about being cheaper. It is about being smarter. Places that succeed are those that create, commercialise and retain intellectual property. That means not just inventing ideas, but enabling them to scale – through planning systems that facilitate delivery, procurement that rewards innovation, and regulation that manages risk without suffocating experimentation.

Resilience determines whether growth endures. It is about future-proofing: ensuring today’s investments create tomorrow’s capabilities. That requires skills aligned to emerging industries, secure and affordable energy, and institutions capable of learning. Resilience is not stability. It is adaptability.

Which brings us to a quieter but more dangerous question for Wales.

What happens if innovation – and the creation of investable ideas – is not treated as a central economic strategy?

The answer is not a dramatic collapse. It is something far more corrosive: gradual uninvestability. Capital looks elsewhere. Talent leaves quietly. Infrastructure underperforms. Public services become harder to fund, not because effort is lacking, but because the economic base is too thin to sustain ambition. Places do not fail loudly. They simply become irrelevant.

There is a persistent assumption in economic debate that growth will simply arrive if we wait long enough. That jobs will follow people, capital will follow labour, and prosperity can be preserved rather than actively created. History suggests otherwise. Growth is not passive. It is deliberate, fragile, and dependent on the choices places make about what they value, what they build, and what they are prepared to risk.

At the heart of modern growth lies something intangible: an idea. Unlike a machine or a road, an idea does not wear out. It can be used repeatedly, simultaneously and at scale. It does not diminish with use. This is why intellectual property matters not as an abstract legal concept, but as the most powerful engine of sustained prosperity we have yet discovered.

Daniel Susskind, in Growth: A Reckoning, captures the shift succinctly. Prosperity in advanced economies increasingly comes not from investing in people alone, but from investing in technologies and ideas that amplify human capability. This brings trade-offs. Growth driven by ideas can strain institutions and widen inequality. But the alternative – stagnation – is worse.

If Wales were to abandon innovation as a growth strategy, it would not simply miss out on future industries. It would hollow out the collective capacity that makes regions investable in the first place. Without investable ideas, there is nothing around which trust can organise itself. Without trust, collaboration collapses.

The real risk for Wales is not that innovation brings trade-offs. All growth does. The real risk is choosing stasis because change feels uncomfortable.

Prosperity is not something we inherit. It is something we build – collectively, deliberately, and with the humility to recognise that no single actor holds the answer.