Investment needed to getWales moving
THE aerospace and automotive industries are hugely important for the Welsh economy, not only in direct jobs but those they support in their wider supply chain.
These are worrying times for both, including Airbus’ wingmaking factory in Flintshire, where more jobs losses have been confirmed. This is why Wales needs a wave of investment from cybersecurity and fintech through to renewables, while making every effort to protect major employers already here.
Deeside, with its proximity to the north of England and the automotive-focused Midlands, could be an ideal location for a gigafactory to provide batteries of scale as we move from diesel and petrol-fuelled vehicles to electric.
We also need government to help firms get to the next level, which not only requires patient long-term capital, but a network of smart expertise and support built into a new venture fund of scale.
Yes, private equity and venture capital funds abound globally and can be tapped into by firms in Wales, but the more embedded funds in Wales, the better.
So why not a government (Welsh and potentially UK too) backed fund, which could also be backed by private investors, with the financial firepower never seen before in Wales? This crisis has proved we need a new way of supporting our economy.
It would have to be a radical departure from those funds that once invested are happy to sit back, take monitoring fees and appear engaged through nominated non-executives, whilst just waiting to push the time-to-exit button. This should be an all-encompassing fund, run by real experts – fund management could come from those currently in the VC sector – and one that helps create the environment for investment.
It could, for example, help create joint ventures by fostering collaboration between existing firms; having proactively identified where companies could benefit from pooling their expertise, contacts, customers, products and services, from tourism and manufacturing to cleantech and fintech.
The fund should be able to support businesses at different stages, including say grant support through the proof of concept and minimum viable product phases, through to funding for commercialisation and growth right up to scale-up. It should also have a global reach in identifying collaboration potential and seeking to bring investment into Wales too.