Our mission as a business community is clear. We need to help more Welsh businesses become more productive, more resilient and better equipped to grow.
Productivity is central to the Welsh Government's ambition to close the gap with the rest of the UK, but it should not be seen as a narrow measure of efficiency alone.
For some, productivity is associated with cutting costs, reducing headcount or introducing new technology. While those factors can play a role, the reality is usually far less dramatic. The businesses that consistently improve performance tend to focus on something more fundamental: creating greater value through better decisions, stronger capabilities and continuous improvement.
Recent research from Economic Intelligence Wales identified more than 1,700 Welsh businesses described as Productivity Heroes – firms that are increasing productivity while also growing turnover and employment. Their success provides valuable insight into what productive growth looks like in practice.
Creating value where it matters most
One of the strongest themes running through the research is the importance of understanding customers.
High-performing businesses tend to have a clear view of what their customers need and where they deliver the greatest value. They use feedback to improve products and services, adapt to changing market conditions and focus resources where they can make the biggest difference.
That customer understanding often shapes better decisions across the business, from investment priorities to operational improvements. Productivity, in that sense, is not simply about efficiency. It begins with creating more value for the people a business exists to serve.
The role of people in productive growth
The findings also challenge the idea that productivity and employment sit at opposite ends of the spectrum.
Many of the businesses identified in the research are increasing productivity while continuing to create jobs. Rather than viewing people as a cost to be minimised, they invest in skills, training and leadership development to build stronger organisations over time.
Across every sector, businesses need the capability to respond to change, seize opportunities and meet evolving customer expectations. Developing people helps create that capability, strengthening resilience while supporting sustainable growth.
Why leadership makes the difference
Successful businesses rarely arrive at higher productivity by chance.
Strong leadership helps create an environment where improvement becomes part of everyday decision-making. That means setting a clear direction, encouraging innovation and creating a culture where people feel empowered to identify opportunities and solve problems.
The most productive businesses also tend to think beyond immediate pressures. They focus on long-term performance, recognising that meaningful progress is often achieved through a series of improvements made consistently over time rather than a single transformational change.
Turning innovation into practical advantage
Innovation and technology are important drivers of growth, but neither should be viewed as a silver bullet.
The businesses achieving the greatest success are typically those that use technology in support of a broader strategy. New systems, equipment and digital tools are adopted because they help improve customer outcomes, strengthen operations or create new opportunities.
The same principle applies to innovation more generally. Sometimes it involves a new product or service. Equally, it can be about improving existing processes, finding smarter ways of working or identifying opportunities that others have overlooked.
Used well, innovation supports a wider culture of continuous improvement rather than acting as an objective in itself.
Enabling more businesses to succeed
Perhaps the most encouraging aspect of the research is that these businesses can be found across Wales, in a wide range of sectors and locations.
The challenge is no longer demonstrating that productivity improvement is possible. Wales already has thousands of businesses showing what productive growth looks like in practice.
The opportunity now is to help more businesses develop the confidence, capacity and capability to follow a similar path. That may involve investing in people, strengthening leadership teams, embracing innovation or pursuing opportunities that support long-term growth.
At the Development Bank of Wales, we see the role that investment can play in helping businesses take those next steps. Access to finance can provide the backing needed to invest in growth, build resilience and act on opportunities when they arise.
A mindset for long-term success
The Productivity Heroes research does not point to a single formula for success.
Instead, it highlights a common set of characteristics shared by many successful businesses: a strong focus on customers, investment in people, effective leadership, a willingness to innovate and a commitment to continual improvement.
Productivity is not the end goal. It is often the outcome of doing those things consistently, and doing them well.
Thinking about your next step?
Whether you're investing in growth, developing your team or exploring new opportunities, find out how we can support your ambitions at Development Bank of Wales.
