New plan to transform Welsh economy revealed
ANEW economic action plan aiming to help businesses in Wales focus on key areas such as innovation, exports, up-skilling and automation has been revealed by the Welsh Government today.
Prosperity for All will demand that firms seeking financial support from a new £100m funding pot comply with the terms of a new economic contract, which will also include a commitment to their staff ’s wellbeing and mental health in particular.
The blueprint, which will now go out to consultation with businesses and trade unions, also looks to address regional imbalances in Wales’ economic prosperity and to support important sectors such as tourism and food.
Economy Secretary Ken Skates said: “We must get ahead [...] to equip our people, businesses and places to face the future with confidence.
“This approach to economic development and prosperity will stand as a template for government support across the public and private sector, helping to develop a stronger sense of unity and purpose.”
However, as is stands there are no clear targets such as seeking to close Wales’ productivity and gross value added per head gap with the UK average over a specified period of time.
ANEW economic action plan which streamlines the current number of priority sectors towards backing growth businesses of the future, and which will require firms seeking support to adhere to an economic contract, has been revealed by the Welsh Government.
As part of the wider across government department Strategy for All initiative, the economic action plan from Economy Secretary Ken Skates also looks to address regional imbalances in economic prosperity in Wales while seeking to build a more vibrant foundation economy, including support for indigenous firms in areas such as tourism and food.
The plan, which will now go out to consultation ahead of the start of its implementation from next April, also has five calls to action for businesses seeking funding from a £100m new funding pot, including developing headquartered businesses in Wales, with a focus on innovation and research and development.
But first firms will have to comply with the terms of a new economic contract, which will include a commitment to the wellbeing of their staff and mental health in particular.
The Welsh Government will now consult with businesses and trade unions before finalising the terms of the contract.
However, as is stands there are no clear targets such as seeking to close Wales’ productivity and gross value added per head gap with the UK average over a specified period of time.
Mr Skates said “We live in an age of unprecedented change alongside huge opportunity. Fired by the fourth industrial revolution, the way we live, work and spend our leisure time is transforming before our eyes.
“We must get ahead of that change to equip our people, businesses and places to face the future with confidence.
“Our new economic action plan seeks to do just that.
At the heart of Prosperity for All: the economic action plan is a commitment to develop a new and dynamic relationship between Government and business that is based on the principle of public investment with a social purpose.
“This will mean us introducing a new economic contract that will require businesses seeking Welsh Government support to commit to growth, fair work, reducing their carbon footprint and promoting health, up-skilling and learning in the work place.
“In return, and in response to calls from the sector, the Welsh Government will provide a simplified, unified and competitive package of business support.
“This approach to economic development and prosperity will stand as a template for government support across the public and private sector, helping to develop a stronger sense of unity and purpose
The five calls to action to help businesses overcome the key challenges of the future are:
Innovation, entrepreneurship and headquarters – to support businesses to innovate and introduce new products and services;
Exports and trade – to proactively support trade with the UK and the rest of the world;
High quality employment, skills development and fair work - to improve the skills base and ensure work is fairly rewarded;
R&D, automation and digitisation – to help develop new products, automate and digitise to ensure Wales remains competitive in the fourth industrial age; and
De-carbonisation – to enable more Welsh businesses to become carbon light or free.
In abandoning a wide number of priority sectors, first introduced in 2009, the plan is seeking to simplify the approach around three national thematic sectors and four foundation sectors, that also include retail and care.
It also proposing one grand ministerial advisory group to Mr Skates, which will include those from the private sector, although there could be specific and separate task and finish groups. The new thematic sectors are: Tradeable services, including fintech services, online insurance and creative,
High value manufacturing, including compound semiconductors and new composites manufacturing; and
Enablers including digital, energy efficiency and renewables – offer particular opportunities to drive industries of the future.
The plan commits the Welsh Government to a five year programme of capital funding aimed at delivering projects in the most “efficient and effective way.”
This is expected to drive efficiencies of between 15 -20% on new projects, and taking the 2018/19 draft published budget figures for transport capital over the next three years as a benchmark, could drive efficiencies of up to £630m over a ten year period.
Mr Skakes said: “While our economic contract requires business to do the right things today, our calls to action require businesses to respond to the challenges of tomorrow. Together they will ensure the investment we provide to business delivers for the present and the future.
“And our decision to focus our support on three thematic sectors and four foundations sectors will enable us to maximise the impact of our interventions.
“A key part of the plan is recognition of the distinctive opportunities and challenges of our regional economies. Rather than a one size fits all approach we will strengthen regional collaboration and use local intelligence to tailor national delivery, and ensure prosperity falls more evenly across Wales.
“I call upon the business community, our learning institutions, trade unions and our wider society to work with us so together we can grow our economy, build a fairer Wales and seek to deliver our ambition of Prosperity for All.”
Speaking ahead of the publication of the action plan, Plaid Cymru’s shadow cabinet secretary for finance and economy, Adam Price, said: “The Welsh Government has certainly built up expectation for its economic strategy. It was first expected fifteen months ago, and the business community has been left in limbo by this government as it awaits the answers it needs.
“The few indications that we do have for this strategy are not good.
“When I spoke to some key business people and leading economists about this document some months ago, none of them had any indication about it because the government had not spoken to them.
“I hope that the Minister has since rectified this situation and has developed a comprehensive strategy that will turn around Wales’ economic fortunes. This should also include economic indicators so that the government can set itself targets and that we can hold it to account on its progress.”