Wales’ tradeable services sector can play a larger role in export growth, but structural barriers and limited export readiness may constrain its ability to scale internationally, a Welsh Government-commissioned report suggests.
The report, Wales’ tradeable services sector: a mixed-methods study, identified nine priority sub-sectors based on their potential exportability, alignment with Welsh Government strategic plans, innovation, and evidence of recent jobs or GVA growth above overall service-sector trends.
These are financial and insurance services; IT and development; creative and digital media; legal and accounting; management consultancy; architectural and engineering activities, technical testing and analysis; scientific research and development; advertising and market research; and other professional, scientific, technical services.
These tradeable service sub-sectors account for 30% of tradeable service employment and 13.1% of total Welsh GVA.
The data shows that financial and insurance services are the largest contributor, generating £5.1bn in GVA and accounting for 38% of service exports. Other sectors contribute to exports at lower levels.
Service sector exports have grown in relative importance within the Welsh economy in recent years. As of 2022, service sector exports accounted for 29.7% of total Welsh exports, worth a total of £9.4 billion, the report notes.
However, the report identifies uneven export capacity. Stakeholder evidence points to limited export readiness, gaps in trade knowledge, and difficulties accessing specialist support as barriers to growth, particularly for smaller firms.
Operational constraints are also highlighted. Businesses cite access to skilled labour, management capability, and digital infrastructure as limiting factors, while transport connectivity and regional disparities affect the ability to scale operations.
The report also indicates that existing support mechanisms are often perceived as geared towards goods-based sectors, with limited provision tailored to service exports.
To address these issues, the report sets out a series of policy priorities focused on strengthening the enabling conditions for tradeable services growth.
The report suggests increasing support for innovation in micro and small firms through access to applied research and development, alongside improving data collection to provide better visibility of service sector performance and emerging trends.
In addition, the report indicates that existing export support structures could be adapted to better reflect service-sector needs, including more tailored advisory services, simplified access to support, and improved guidance on areas such as intellectual property and regulatory requirements.
