Economic growth and prosperity have always been driven by innovation. New ideas, technologies and ways of working create new industries, improve productivity and ultimately raise living standards. This has been true throughout history, and it remains just as relevant today.
In the Cardiff Capital Region, we have been focused on how technology can make a difference to our economy. There are already areas where Wales is developing a strong reputation, and in which we see the potential to reinforce local success. Several of our key priority sectors – such as semiconductors, fintech, cyber security and life sciences – are characterised by innovation and research, and are already seeing significant growth. These sectors or “clusters” have global potential, and by encouraging and supporting innovation, we can help businesses scale and compete at an international level.
The CCR Innovation Investment Capital fund is one way we are doing this. A £50 million fund providing investments of between £2 million and £7 million, it is designed to help high-growth businesses take the next step, whether they are already based in the region or looking to relocate. The aim is to generate inclusive prosperity, supporting businesses that will create high-value jobs and drive long-term economic growth.
Supporting innovation is not just about providing funding. It is also about creating the right environment for businesses to take risks, test new ideas and bring new products and services to market. That means fostering a culture where innovation is encouraged, where businesses have access to skills, talent and collaboration, and where they are supported to scale. It also means recognising that innovation is unpredictable. The most transformative ideas often come from unexpected places, and the best approach is to create the conditions where those ideas can flourish.
One area where innovation is already having a huge impact is artificial intelligence. AI is developing rapidly, and its potential applications are vast. Many of the tasks that people currently do will be taken over by automation – and not just mundane or repetitive tasks. But while this may displace some jobs in the short term, the long-term effect will be to create entirely new types of work, in sectors that may not even exist yet.
This has happened many times before. When I was growing up, there was no digital media sector. Now it is a vast global industry employing many thousands of people. Technology constantly creates new opportunities, and the best way to ensure we benefit from this is to embrace it and prepare for change, rather than resist it.
For businesses, this means thinking about how they can use innovation to remain competitive. Whether that is investing in research and development, adopting new technologies or finding new ways to serve customers, businesses that focus on innovation will be the ones that thrive. For policymakers, it means ensuring that the right infrastructure, funding and support are in place to help businesses make that leap.
The challenge is that innovation does not always fit neatly into economic planning. It does not follow a predictable path, and its benefits are not always immediate. And if growth is to be as inclusive as possible, technology and innovation alone will not be enough. But history tells us that economies which foster innovation grow more quickly and create more opportunities.
Wales has the talent, the businesses and the ambition to be at the forefront of this. By ensuring we have the right support in place, we can create an environment where innovation drives long-term prosperity across the region.
