Short-term policy cycles and fragmented decision-making are limiting Wales' ability to improve productivity over time, according to business, education and policy leaders.
At a roundtable hosted by Business News Wales and the Wales Productivity Forum, participants said the structures underpinning economic development – including funding models, governance and policy alignment – are not set up to support long-term productivity gains.
A consistent concern was the impact of short funding cycles, particularly in publicly funded programmes and services. Annual or near-term settlements were described as restricting the ability of organisations to plan, invest and build capacity over time.
Phil Jones, chief executive of Business in Focus, said short-term contracting arrangements can have a direct impact on delivery, including the ability to recruit and retain experienced staff, which in turn affects the quality of support provided to businesses.
There was also a broader view that political timescales are misaligned with the nature of productivity improvement, which typically takes years, if not decades, to materialise. Participants said this can encourage a focus on more immediate, visible outcomes rather than longer-term economic performance.
Robert Lloyd Griffiths, chair of the Wales Productivity Forum and director for Wales of ICAEW, said productivity needs to be more firmly embedded within government policy, with greater emphasis placed on its long-term importance to economic performance.
He said that while there is recognition of the issue, this has not yet translated into sustained action or consistent prioritisation across government.
Sharon James-Evans, principal of Cardiff and Vale College, said a lack of alignment between key policy areas – including skills, education, health and economic development – is further limiting progress. She said these systems often operate in silos, despite being closely interconnected in practice.
Examples highlighted included differences in apprenticeship frameworks and funding systems across the UK, as well as challenges for employers in accessing support. Participants said this complexity can create barriers to investment in skills and workforce development.
There were also calls for a more consistent long-term approach to education and training, with concerns raised about frequent changes to qualifications and funding structures, which can create uncertainty for both providers and employers.
Infrastructure was identified as another area where long-term planning is critical. Digital connectivity, transport and access to childcare were all cited as factors influencing participation in the workforce and the ability of businesses to operate effectively, particularly outside urban centres.
Rachel Lai, partner at Menzies LLP, said gaps in digital infrastructure can limit opportunities for remote working and economic activity in rural areas, while inconsistencies in policy between Wales and England can affect workforce participation and skills development.
Alongside structural issues, participants pointed to the need for greater coordination between the public and private sectors. Aligning priorities – particularly in areas such as technology adoption and skills investment – was seen as essential to improving productivity outcomes.
Steph Rodger, head of finance at Green Gen Cymru, said a more joined-up approach could help ensure both sectors are moving at a similar pace, particularly in response to developments such as artificial intelligence.
There was also support for stronger independent oversight to help maintain focus beyond political cycles. Suggestions included the creation of a dedicated productivity commission or advisory body to provide continuity, evaluate policy impact and draw on best practice from outside Wales.
Professor Melanie Jones, lead of the Wales Productivity Forum at Cardiff Business School, said greater scrutiny and evaluation of policy would help address what she described as a tendency towards frequent policy change without a clear understanding of what works.
Participants said improving productivity will require a shift towards longer-term thinking, greater policy stability and more coordinated decision-making across institutions.
