The Industries Set to Shape the Future Welsh Economy

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Industry is no stranger to south east Wales. The legacy of past industries is all around, from Big Pit to the Ford engine plant at Bridgend, due to close later this year.

In Cardiff Capital Region the focus now is not on the past but the future. The 10 local authorities that make up the region, and the central bodies that drive its strategy, are concerned above all with one question: how do we make sure our region is as much an industrial powerhouse in the future as it was a century or more ago?

To do this successfully, Cardiff Capital Region needs to identify the industries that can create prosperity in south east Wales over the next 10 to 20 years, and then work out how best they can be nurtured.

Looking at where the region already has growing or potential strength, the Regional Cabinet has picked out eight sectors – cyber security, compound semiconductors, life sciences, fintech, artificial intelligence, energy and environment, transport engineering and the creative industries – where encouragement now will help embed the industries of the future.

Cyber security

Cardiff Capital Region already has some major international players in cyber security operating here in Airbus and Thales. The focus of their work is protection, attempting to predict cyber attacks and prevent them before they happen, rather than the forensic work of analysing attacks after they have taken place.

Crucially – and this is a major reason for companies like Airbus and Thales being here – their presence supports and is supported by a growing ecosystem of SMEs in the cyber sphere, fortified and fed by the expertise and talent pool coming out of the region’s universities.

These companies may not employ large numbers of people, but they are high skilled, high value jobs, and the young people who fill them spend a lot of money in the local economy. Equally, for the companies working in this field the market is not limited to the region but is global, and there are applications in other sectors from fintech to construction.

Compound semiconductors

The next generation of semiconductors, compound semiconductors will be used in everything from 5G to the Internet of Things, taking in robotics, healthcare, autonomous vehicles and energy efficiency along the way. And the good news is that south east Wales is at the forefront of development, with a world leading cluster emerging in the region.

Pioneering companies such as IQE are already well established here, working closely with Cardiff University in the Compound Semiconductor Centre. Cardiff Capital Region has supported the industry with a £38m investment in a manufacturing facility, the Compound Semiconductor Foundry, at Newport, ensuring that manufacturing of the semiconductors, and the jobs that go with it, is not offshored.

Life sciences

The life sciences sector is a huge one, but Cardiff Capital Region is focusing specifically on medical diagnostics and devices, where the region is strong. As with cyber, it’s a sector that depends on the talent being produced in the region’s universities, and where companies are attracted by the ecosystem of SMEs and start-ups that has developed here.

It’s another growing market as the technology of healthcare becomes ever more advanced, and another sector where the marketplace is global.

Fintech

South east Wales already has a large financial services sector with companies such as Admiral among the region’s largest employers. Much of the employment so far though has been in call centres; in the future companies will increasingly use technology – insurtech – to connect with their customers in new ways.

This disruptive revolution, which is already underway, provides an opportunity for technology-driven SMEs and start-ups to work alongside the industry leaders. The UK currently leads the way in fintech and businesses created and based in south east Wales are among the upsurge.

Transport engineering

The UK Government has changed gears on the decarbonisation of our road transport sector with the announcement that the sale of new petrol and diesel vehicles will be banned from 2032.

With the end of the internal combustion engine in sight, companies working in the field of electric vehicle infrastructure and the development of batteries, as well as other alternatives to fossil fuelled vehicles, will play an important part in our future.

But besides the automotive, south east Wales also has strengths in other transport sectors such as aviation.

Energy and environment

The decarbonisation agenda goes beyond road transport and is becoming increasingly urgent as the target date for Wales and the UK to achieve net zero greenhouse gas emissions approaches. Cardiff Capital Region will encourage companies in this sector, not just because of their potential for growth but because decarbonising is a key part of creating the resilient and sustainable economy that our communities need in the future.

Artificial intelligence

AI in many ways underpins the transformative work that is taking place in many of the other priority sectors. Whether it’s fintech, medical diagnostics or autonomous vehicles, the use of data and AI is playing an increasing role.

Creative industries

The Cardiff Capital Region already has significant strength in TV and film production, both with home grown companies such as Bad Wolf, makers of His Dark Materials, and with outside companies including Hollywood filmmakers coming here to use the region’s studios and outside locations. And the region is also strong in homegrown music.

There’s an important difference between this sector and some of the others. While sectors such as cyber and life sciences rely on high skilled graduates and postgraduates, the creative industries employ a wider range of skills including crafts and trades such as costume and stage design, lighting and sound engineering.

But the region also has many SMEs active in the games media, where technology skills are important.