GUEST COLUMN:
Robert Lloyd Griffiths
Chair, Wales Productivity Forum;
Director for Wales, ICAEW
Wales has been having the same conversation about productivity for decades. And yet, we are still at the bottom of the table.
That should concern all of us, because productivity is not a niche economic concept. It is the single biggest determinant of our long-term prosperity. It shapes wages, living standards, public services and ultimately the opportunities available to people and businesses across Wales.
If we are serious about improving economic performance, then we need to be equally serious about productivity. At the moment, it seems that we are not.
One of the fundamental challenges is that productivity still sits too far down the list of priorities. It is one of many objectives within government, often competing with dozens of others for attention and resource. But without improved productivity, many of those other objectives become harder to achieve. Economic growth, better public services, higher wages and stronger communities all depend on it.
To treat productivity as just another policy lever is to misunderstand its importance. It should be at the centre of our national economic strategy.
We also need to recognise the structure of the Welsh economy. We often talk about SMEs, but the reality is that the vast majority of businesses in Wales are micro businesses. These are organisations with limited capacity, limited time and limited resource. They are focused on immediate priorities such as paying wages, securing their next contract and maintaining cash flow.
In that context, productivity is not front of mind.
That is not because business owners do not care. It is because the concept is not presented in a way that feels relevant or actionable. If we want businesses to engage, we need to simplify the message. Productivity does not need to be an academic term. It can be understood in straightforward terms as doing things better, faster and more effectively.
If we can communicate that clearly, and demonstrate the benefits in a practical way, we are far more likely to see engagement.
There is also a role for leadership.
Productivity will not improve through fragmented effort. It requires a coordinated approach that brings together government, business, education and wider society. That coordination does not happen by accident. It requires a clear signal from the top that productivity matters and that it will be prioritised.
That is why I believe we need a step change in how we approach this issue. Indeed, our ICAEW manifesto for the Senedd elections calls on the next Welsh Government to put business at the heart of its Programme for Government by establishing an independent Commissioner for productivity to drive sustained improvements in Wales’s economic performance and living standards. This is because we firmly believe that productivity needs a visible champion and a clear place in the national agenda.
Other countries have taken this approach. In Australia, for example, productivity is considered in the development of legislation. There is a clear expectation that policy should support economic performance. That kind of discipline is something we should be considering in Wales.
We also need to move beyond simply measuring productivity and start targeting it. We know where we are. We know that we lag behind other parts of the UK. What we have not done consistently is set clear, ambitious targets for improvement and align our policies to achieve them.
At the same time, we should not lose sight of the bigger picture. Productivity is not about a small number of high-performing sectors or a handful of large businesses. It is about the entire economy. It is about creating an environment where businesses of all sizes can improve, where individuals can develop their skills and where public services operate effectively.
When productivity improves, the benefits are widespread. Businesses become more competitive. Wages increase. Tax revenues grow. Public services can be funded more sustainably. It creates a virtuous cycle that lifts the whole economy.
But that cycle will not start on its own. It requires a collective effort and, crucially, a shared understanding that productivity is not optional. It is essential.
We are beginning to see more momentum in this conversation. There is greater awareness, more engagement and a willingness to address the challenge. That is encouraging. But awareness alone will not change our position.
We need to convert that awareness into action.
If we do not, we will continue to have the same discussion in another decade’s time, asking the same questions and facing the same challenges.
Wales has the capability to improve its productivity. What it needs now is the focus, the leadership and the commitment to make it happen.
