GUEST COLUMN:
Kate Penney
Research Fellow
The Productivity Institute
Newport is powering ahead when it comes to productivity. Since 2008, its growth has been almost double the Welsh average. Sectoral strengths in advanced manufacturing, semiconductors, clean energy and digital tech, are contributing to a high value economy for the area.
A team of researchers from The Productivity Institute (TPI), headquartered at The University of Manchester, has collaborated with Newport Council as part of TPI’s Investment in Productive Places campaign. The campaign, which involved eight places across the UK, examined a broad range of productivity drivers, or “capitals”, to understand how places can make better use of their existing assets and coordinate investment strategies more effectively.
The seven capitals are financial, physical, human, social, institutional, intangible, and natural, meaning that measures extend beyond a narrow set of economic metrics. Because some forms of capital – such as institutional capital, which reflects the strength of relationships and collaboration, and social capital, which captures factors like pride in place – are more difficult to measure, a mixed-methods approach was used. This included both quantitative data and qualitative insights gathered through workshops and interviews with stakeholders from
Newport’s public, private, and voluntary sectors. These insights matter because they provide important perspectives on how the people who live and work in Newport feel about the best parts of Newport and the challenges it faces.
Whilst Newport has made progress, the report also found challenges, including a skills gap, poor health outcomes, and the need for infrastructure investment, which are inhibiting Newport in reaching its potential.
The capitals approach highlights Newport’s distinctive assets and challenges, helping to coordinate action across different areas of investment. The report finds that Newport does not lack assets; rather, its productivity potential depends on better connecting and building on its existing strengths.
Key opportunities include:
- Building sector-based clusters in semiconductors, fintech and advanced manufacturing to deepen innovation ecosystems
- Improving skills and retention, particularly linking education provision to emerging industries
- Enhancing connectivity, including digital infrastructure and transport links
- Strengthening collaboration, aligning government, business, universities and communities around a shared vision
These priorities reflect a shift from short-term, project-based thinking toward long-term, place-based investment strategies, which is a core principle of The Productivity Institute’s wider Investment in Productive Places programme.
The findings resonate strongly with broader debates about productivity in Wales. Professor Melanie Jones, leading the Wales Productivity Forum, has highlighted that Wales continues to face a persistent productivity gap, with output per hour around 17% below the UK average and little evidence that this gap is closing (Wales’ Productivity Challenge: A Focus on the Future – The Productivity Institute). Furthermore, raising productivity requires sustained, long-term action across policy domains, including health, education and infrastructure, reinforcing how a capitals approach can support coordination and vision.
The report also introduces a capitals data tool (TPI Local Authority Capitals Dashboard) which provides Newport with a more granular and evidence-based picture of its economic strengths and weaknesses across each of the seven capitals. By combining local data, benchmarking and stakeholder insight, the tool shows where constraints are most binding and where investment can have the greatest impact. This gives policymakers and business leaders a clearer basis for prioritisation, highlighting, for example, whether gaps in skills, connectivity or institutional capacity are most limiting growth, and supports a more targeted, coordinated approach to economic strategy.
Newport has a promising opportunity to shape its future by developing a cohesive vision and investment proposition. The capitals approach and data tool support key anchor institutions to work closely together towards a shared vision, and the data provides the foundation to make informed decisions across a range of productivity drivers. This also reinforces the importance of collaboration, as Newport Council cannot do this alone: building a stronger, more productive local economy will depend on coordinated action across business, education, community and public-sector partners.
The report highlights a clear commitment to creating a comprehensive economic narrative and a plan for sustainable growth that highlights strategic areas for investment. By focusing on a diverse range of sectors, alongside complementing support for the semiconductor cluster, Newport can create a robust skills strategy that supports various industries. The report highlights challenges, but also that there is great potential for Newport to thrive.
