If we want to improve productivity in Wales, we need to be clear about where it is actually being won and lost. It isn’t just about output or effort, it’s about how decisions are made, how quickly they are made, and whether the systems around businesses are helping or hindering progress.
Productivity looks very different depending on the sector you’re in. In some cases, outputs can be measured quickly and clearly. In others, particularly in longer-term development projects, the real value may not materialise for years. Yet too often, the focus remains on short-term, immediate outputs, which doesn’t reflect the reality of how many businesses operate.
Working in finance within a business that is developing energy infrastructure, I see this first-hand. The type of projects we are involved in are long-term by nature. Designing and consenting a new electricity network, connecting renewable generation, and building the infrastructure to support it does not deliver instant results. The impact comes further down the line – in energy resilience, in enabling investment, and in supporting wider economic activity. Measuring productivity in that context is very different to measuring output in a more immediate, transactional environment.
That is why a more tailored approach to productivity is important. Different industries operate on different timescales and deliver value in different ways. A one-size-fits-all approach risks undervaluing sectors where the benefits are longer term but no less significant. If we are serious about improving productivity, we need to recognise those differences and measure success accordingly.
At the same time, there are some common factors that cut across all sectors. One of the most significant is decision-making. Productivity is heavily influenced by how efficiently decisions are made – not just within businesses, but across the wider system they operate in. Delays, uncertainty and overly complex processes can all act as barriers, slowing down progress even where there is clear intent to move forward.
This is where alignment between the public and private sectors becomes critical. In energy, many of the targets, urgency and ambition are set by government. The private sector then responds through timely, commercially driven decisions that are shaped by investors, competition and the need to deliver returns. It is vital that government narratives and policies are carried consistently through every level of the public sector. Large infrastructure delivery, planning processes, funding decisions and policy frameworks all sit across that boundary. When those systems are not aligned, it creates friction that holds back progress.
There is a real opportunity to address that, particularly as we look ahead to how new technologies will shape the economy. The pace of change we are seeing with AI is a good example. In finance, it is already clear that roles will look very different in the coming years. The same will be true across many sectors. The question is not whether that change will happen, but how we respond to it.
A clear, joined-up approach is needed, one that looks at how AI can be used to improve efficiency and decision-making, while also ensuring that the workforce is equipped with the right skills. Those two things need to move together. Without that alignment, there is a risk that technology becomes another source of disconnect, rather than a driver of productivity.
There are also more practical, day-to-day considerations that should not be overlooked. Businesses often encounter differences in policy and support depending on where they are based. That can be something as straightforward as access to funding for training or differences in how programmes are delivered across borders. While some variation is inevitable, reducing unnecessary complexity would make it easier for businesses to invest in their people and improve performance.
What is clear is that there is no single lever that will unlock productivity. It is shaped by a combination of factors, how we measure success, how quickly decisions are made, how well different parts of the system work together, and how effectively we adopt new technologies.
There are reasons to be positive. In my experience, the next generation entering the workforce is engaged, confident and keen to understand how businesses operate. The challenge is ensuring that the systems they step into allow them to contribute effectively, rather than slowing them down.
If we focus on improving decision-making, reducing friction in systems and taking a more realistic view of how value is created across different sectors, we can start to make meaningful progress. Productivity is not an abstract concept – it is the cumulative impact of how well everything works together in practice.
