Business News Wales Panel Debate
In this Month’s panel debate we ask some of our nations brightest minds to share their views on what Wales should be doing to attract more inward investment.
Mark Hindmarsh | Technology, Start-ups & Business Growth Acceleration
As a keen watcher of trends I like to keep my finger on the pulse when it comes to growth predictors in certain industry sectors, particularly where technology and new innovation are key drivers.
Over the last few years I’ve been tracking growth indicators across three vertical sectors in Wales, sectors I believe will enjoy high growth this year and will continue to be at the heart of the Welsh economy. They are:
Encompassing software, gaming, media production, publishing, music, entertainment and other such disciplines, this sector will enjoy increased growth. Advances in accessible technology, high speed internet and a growing “digital savvy” population in Wales has led to a significant rise in people opting to work in the “Creative Economy” or start-up new ventures offering digital services and fresh opportunities.
Energy & Environmental:
Wales has an opportunity to be a leader in renewable energy leveraging low carbon energy sources such as wind, tidal, solar and biomass. Large-scale projects like the Swansea Bay Tidal Lagoon, (assuming it becomes a reality), and the biomass plants planned for Anglesey and Port Talbot will be catalysts for growth, investment and innovation, as will adoption of technologies such as lithium batteries in vehicles and for off-grid energy storage.
Almost 400 companies in Wales operate within the life sciences sector, which is diverse, research intensive and global in impact and reach. Many companies are commercialising intellectual property spun-out of Welsh universities, a trend which will continue. Diagnostics and big data analytics is an area we’ll see interesting developments this year.
If the sectors mentioned are to remain key contributors to the engine of growth in Wales, it will be essential to educate and retrain the population. After all a well-educated and skilled workforce is instrumental to achieving prosperity in high growth industries.
Dr. Meirion Morgan | Business of Welsh Politics
The global backdrop to Wales’ fragile economy presents many threats and challenges and it’s difficult to see what industries could achieve sound growth over 2016/17. Productivity is still a key issue and PWC’s UK Economic Outlook report  forecasts growth over 2016 for Wales to be 0.5% less than that for the UK as a whole.
Some economists believe the dominance of services in the economy presents issues, with growth to date showing an over-reliance on consumer spending. That said, with both unemployment rates and inflation being low, growth should at least hold in the short-term.
The general contraction in manufacturing seen in 2015 over the UK may have an ongoing and larger effect in Wales than the UK as a whole over 2016/17 because a greater percentage of jobs are dependent on it. The outlook is also mixed, not least because of the forthcoming EU referendum. A recent CBI article  points to Wales’ trade surplus with the EU and support from various businesses to ‘Remain’, so a decision to ‘Leave’ will create a very uncertain future.
Variation across the manufacturing sector and through sub-sectors exacerbates that: the issues at Port Talbot need no elucidation. Bright spots exist, of course – the increase in air travel across Asia should help Airbus and its site in Broughton .
Our politicians, meanwhile, could have a significant and almost immediate positive impact on industry in Wales. The go-ahead on the M4 relief road and action on building the much-hyped South Wales Metro would create an uplift in construction and associated services. A new, energetic Assembly in Cardiff Bay could drive public sector reform – for example, in digital services . Sound management and local procurement could be of enormous benefit to Wales’ nascent tech scene.
But, overall, seeing key industries emerge over 2016/17 is unlikely. The year will be business as usual, save for the vicissitudes introduced by volatility in economies around the world and the EU referendum.
Karen Thomas | Financial Services
Technology. Media & Telecoms. Whilst Technology as a sector individually will grow it will also have a significant impact on the growth and success of other sectors as businesses look to differentiate themselves and gain access to a wider client base than their competitors.
We continue to see a rise in technology based businesses locally and our culture of creativity and entrepreneurship further supports this growth in a sector comprising of film, TV, digital media, animation and software. The recent announcement of the relocation of the BBC to state of the art facilities and Internationally significant companies such as Tinopolis, Boom and Go Compare all help to demonstrate our International profile in this growing sector.
Manufacturing – The announcements of Aston Martin and TVR to open new plants in Wales this year will support the continued focus to ensure that the manufacturing sector in Wales continues to grow. Manufacturing in Aerospace and defence has long been highly regarded but the continued investment to improve the skill levels of those employed in the manufacturing sector to support companies moving up the value chain is critical.
Life Sciences – Large global markets are growing quickly and we have some excellent companies who are starting to increase our international profile which in turn should attract more Life Science innovation and research to Wales. Ensuring that communities are well connected and able to seize new opportunities quickly will be important.
Renewables – Given the culture of creativity and entrepreneurship it would be remiss not to mention the renewables sector as a growth industry for 16/17. As all businesses continue to focus on cost reduction, and energy costs will be a significant part of this, opportunities for the use of renewable energy /technology will only increase.
How we incorporate emerging technology and bring it into existing businesses will be key to the Welsh economy…
Alastair Milburn | Welsh Media
Wales is blazing a trail in many growth industries, and in some areas is truly world-leading.
Digital innovation, the compound semi-conductor sector, health and life sciences are key areas for nurturing and investment.
The Cardiff Capital Region and Swansea Bay City Deals are going to provide an infrastructure that will enable these key sectors to thrive, and it is very exciting to see companies in Wales creating and developing globally-recognised products.
Key to the ongoing success of these sectors are skills and people, and this is going to be one of the biggest issues facing Wales in the coming years – there simply aren’t enough skilled people to allow these industries to thrive as things stand.
We need to stop the ‘brain drain’ which has dogged Wales for decades, and we will need to attract back those who have developed their careers elsewhere. They can bring back their expertise and experiences, and the catalyst for that must be opportunities, visionary thinking from business, and of course, the great work-life balance in Wales.
I think Wales is better placed than it ever has been drive these growth industry, with a Government which is more business-savvy – though it can always do more.
I truly believe the country does not shout loudly enough about its achievements. Yes, GVA needs to improve compared with the rest of the UK – but supporting these key industries with skilled people and support will help to make that happen.
Rhian Elston | Investment Director
As a generalist investor in Wales, Finance Wales works closely with businesses across sectors and at all growth stages. Based on our experience we’re expecting advances in technology and opportunities from funding and inward investment to help drive growth in Wales this year.
In Construction access to funds is having a positive effect with the Wales Property Development Fund helping to deliver 18 construction projects and 191 new homes and with the Welsh Government’s Help to Buy – Wales scheme enabling 3,084 properties to be purchased. These funds will continue to boost the sector which is set to grow at nearly triple the UK average, with over 27,000 jobs to be created in the coming five years, according to new research released by the Construction Industry Training Board (CITB).
In the Digital sector, we’ve seen a rise in diagnostic and big data analytics alongside new fintech companies thanks to advancements in cloud-based technology. Last year Tech Nation named South Wales as one of the UK’s top 5 fastest growing digital areas in the UK with an 87% increase in the concentration of digital companies.
This is supported by the latest ICAEW Confidence Monitor which shows that ICT and Construction expect the strongest growth in sales, employment and pay.
Advanced Manufacturing is rapidly growing and the recent announcements by Aston Martin and TVR to open new plants in Wales will only strengthen this.
Interestingly, in the Health sector in Wales more businesses are exploring the uses of natural compounds to develop new products, with Pembrokeshire based Jellagen who produce Jellyfish-sourced collagen a good example. Food manufacturing is also moving towards use of more natural ingredients and healthier foods with many businesses planning ahead for growth in this area.
Cutting edge sectors like Life Science are also thriving in Wales. There are numerous life science businesses developing products and devices which have the potential to be life-changing and have a global impact. We’re seeing more of our Life Science portfolio become commercialised and facilities like the Life Science Hub provide a huge boost for early stage businesses.