GUEST COLUMN:
Joshua Miles
Head of Wales
Federation of Small Businesses
As the dust settles on a momentous election, the new Cabinet Minister for Enterprise, Connectivity and Energy Adam Price has begun hinting at what’s to come in his first public statements.
One thing in particular caught my eye.
In arguing for a new development agency, he pointed to the Basque Country and said his plan “mirrors exactly” what happened there in the 1980s and 1990s. He highlighted the role of SPRI, the Basque development agency, and Orkestra, its competitiveness institute, in keeping government focused and honest. He argued that the Basque Country moved from a position similar to Wales in the 1980s to become one of Europe’s strongest regional economies.
When most people look to other countries it’s often Scotland or Ireland they go to first. Should we instead be gazing further south?
Looking at the evidence available, the comparison is a useful one. Wales and the Basque Country are both small nations on Europe’s Atlantic edge with an industrial inheritance, a strong minority language and devolved institutions. Both faced the decline of heavy industry, have small capital cities and difficult geography. Both are small enough that economic policy, if done well, can shape national outcomes.
But the real comparison is political.
The Basque Country chose to build economic institutions that would last. Wales has too often built them, doubted them, reorganised them and moved on.
That is the first lesson: long-term institutions matter. The Basques did not stumble into success. They created a durable development agency in SPRI and kept it. They built cluster organisations, backed technology centres, invested in vocational training and created independent analytical capacity through Orkestra so strategy was not driven by ministerial mood. The result was not instant transformation, but steady accumulation of capability. Today the Basque economy is more industrial, innovative and export-oriented than Wales.
Wales, by contrast, has suffered from churn. New plans. New architecture. New narratives. Not enough continuity. The abolition of the Welsh Development Agency did not just remove a brand. It reflected a wider habit of changing structures before they have time to earn trust and credibility. Businesses do not invest on the basis of policy churn. They invest when they believe the institutions around them will still be there in five or ten years.
The second lesson is consensus. Not empty agreement, but real alignment across political parties, business, universities and civic institutions about the broad economic model.
The Basque Country has had a striking consistency of purpose around competitiveness, economic strength and innovation. That has created policy stability over decades. Wales does not need everyone to agree on every idea. It does need a shared view that economic development is a national project, not a nice to have. A new development agency will only work if it is backed beyond one minister, one government and one Senedd term.
The third lesson is one Wales has avoided for too long: you build prosperity by growing your own firms, not just by waiting for someone else to arrive.
Inward investment matters and Wales should continue to attract it. But the Basque model shows that it is not enough on its own. The Basques strengthened domestic firms, supported SME growth, developed clusters, backed supply chains and helped local businesses internationalise. They focused on capability, not just transactions. Wales has too often leaned on branch-plant economics: welcome jobs, certainly, but too little local ownership, rootedness and spillover. The lesson is not to reject inward investment. It is to stop mistaking it for a complete strategy.
So, there are lots of similarities. But what’s not the same?
The biggest difference is fiscal power. The Basque Government raises and retains most of its own taxes. Wales does not. That gives the Basques more room to shape investment and more incentive to think long term. Wales is not in that position, but it is a reason to be more disciplined about the powers and institutions we do have.
The Basques did not transform their economy through one clever announcement or one institutional relaunch. They did it through continuity, discipline, consensus and a relentless focus on building on their economic strengths.
The question for Wales now is whether we can match that approach. Can we turn ambition into a delivery system that genuinely helps Welsh firms to start up, scale up, export and succeed?
That will require a WDA with a clear focus: accessible business support, stronger SME export performance and deeper supply chain integration. It must be outcomes-driven from the outset, with success measured in hard results: more firms starting, more firms scaling and more Welsh businesses trading internationally.
In the end, the real test of our institutions will not be whether they exist, but whether they give Welsh small businesses the confidence to invest, the support to grow, and the ability to stay rooted in the communities they serve.
