In Newport, a global semiconductor manufacturer is pouring £250m into expanding its site to produce next-generation chips for electric vehicles. In the Celtic Sea off Pembrokeshire, plans are gathering pace for floating wind turbines.
These two seemingly unconnected projects share a common thread: they are the product of close collaboration between the Welsh Government, UK Government and business. Call it what you will – joined-up thinking, an economic mission, or plain common sense – Wales has been building an industrial strategy in all but name, and it delivers results. Now, as an ambitious UK-wide Modern Industrial Strategy is launched, Wales needs a codified and common roadmap to keep the winning formula alive. A single industrial strategy for Wales is needed. Not a carbon copy of the UK strategy but a plan that combines the power, ideas and resources of all public bodies in Wales, especially local authorities and both governments.
A decade ago, few would have pegged Wales as a player in the semiconductor industry. Today, the compound semiconductor cluster in south-east Wales is internationally recognised and growing fast. Anchored by firms like IQE and a rejuvenated Newport semiconductor wafer fab, the cluster was nurtured by deliberate policy choices.
When US-based Vishay invested £250m to expand in Wales, it was a vote of confidence in a region that offers cutting-edge expertise and a supportive business environment. The UK Government’s Automotive Transformation Fund provided co-funding to de-risk the venture, and the Welsh Government chipped in with site support and training initiatives. As one UK minister put it, the deal is “a huge vote of confidence in the Welsh economy” – supporting hundreds of skilled jobs and helping make Britain “the destination of choice” for future industries.
Crucially, the two governments worked in concert. An Investment Zone in south-east Wales focused on semiconductors – jointly selected by Westminster and the Senedd – is lining up £160m of funding to accelerate infrastructure and skills for the cluster. “Substantial growth has taken place, and I’m proud of the role we’ve played in creating those opportunities,” Vaughan Gething said in his resignation speech as First Minister in 2024. He highlighted it as a model of the long-term approach Wales is taking to investment in areas of genuine strength. The cluster now exports over 95% of its output worldwide, adding around £500m a year to Welsh exports. What began as a niche academic idea is now a high-growth, export-led industry supporting thousands of jobs – proof that industrial strategy doesn’t need a grand title to get results.
Wales’s other great industrial opportunity lies in clean energy, and here too a joint approach is unlocking investment. Earlier this year, Copenhagen-based fund CIP teamed up with Bute Energy in a £600m deal to build new wind farms across Wales. The project, facilitated by supportive planning from the Welsh Government and revenue guarantees through the UK’s Contracts for Difference (CfD) scheme, is set to create up to 2,000 jobs. It’s a template for how global capital can be drawn by the promise of stable policy and shared risk. This pattern of teamwork extends beyond individual projects. The new freeports at Anglesey and at Milford Haven/Port Talbot were co-designed and jointly funded by the Welsh and UK governments. These zones are explicitly geared toward renewable energy manufacturing, storage and export – leveraging Wales’s natural advantages in wind and marine power while tapping UK-wide trade networks. Business leaders have welcomed the joined-up approach as it reduces uncertainty. Instead of playing politics with projects, Cardiff and London struck agreements that give investors clarity on incentives, planning and support. For companies eyeing multi-million-pound bets on hydrogen production or battery factories, that and the stability that is as valuable as any grant.
Perhaps the clearest endorsement of Wales’s de facto industrial strategy comes from the investors and executives who are choosing to grow in Wales. They cite the combination of local commitment and national support as a key strength. Skilled graduates from Welsh universities, backed by devolved education initiatives, meet UK-funded research programmes in partnerships that benefit everyone. The strategy is working – even if we haven’t been calling it one.
Thus far, the approach has been pragmatic, perhaps reactive, and case-by-case. Now, with a UK Industrial Strategy and eight sector plans, packed with new policies, competitions, committees and billions on the table, a formal Industrial Strategy for Wales, explicitly defined, could help bind these threads into an even stronger narrative for investors. It would signal that beyond semiconductors and clean energy, the nation has a coherent plan for all its growth sectors – from advanced manufacturing to creative industries – underpinned by lasting political consensus.
Wales has demonstrated success where both governments and business align – so evident in the semiconductor and renewables clusters. For these sectors, the relationship between business, the UK and Welsh governments is working, and the UK Industrial Strategy will be swiftly implemented. However, some sectors like construction have slipped through the cracks. That's not right. We need to know, the sooner the better, how the industrial strategy responsibilities will be shared between governments. That is why we need to transition to a Welsh Industrial Strategy that protects what is working, joins the dots across departments, updates the 2017 Economic Mission and kickstart a transition to a proactive cross-government strategy that benefits all sectors.
For now, what’s important is that companies on the ground feel the effect of this partnership approach. Real money is being spent on Welsh soil to build everything from microchips to wind turbines. By working together underpinned by a long-term plan across devolved and reserved powers, Wales and the UK will have created a platform on which business can thrive. Formal title or not, that is an industrial strategy. The challenge and opportunity ahead is to build on this foundation – and perhaps finally give it a name – so that Wales’s collaborative success story can continue, even more visibly, for years to come.
