Building a new and dynamic relationship with Welsh businesses
EARLIER this week I was proud to launch our new Economic Contract which will change the relationship that we, the Welsh Government, have with the business community.
The Economic Contract will help us build a new and dynamic relationship with businesses in Wales that is based on the principle of public investment with a social purpose, and this is something that is right at the heart of our Economic Action Plan which I launched in December.
We are building on some excellent work to support and grow Wales’ economy.
With over 37,000 jobs supported across the whole of Wales in the last year and over 190,000 in the last five years of government, our record is strong.
But we know that our economy is changing and we must change with it if we are to be inclusive and competitive in the future.
Welsh Government officials and I have travelled the length and breadth of Wales this year to talk to businesses, representative organisations and others about the Economic Action Plan and to seek their input on how we implement and deliver its commitments.
These conversations have been stimulating, challenging and above all hugely interesting and informative, and I am grateful to all those who took time to talk with us.
The nature of those conversations was diverse – but a number of common messages came to the fore again and again.
That economic development is underpinned by strong relationships, not just between business and government, but with a range of other partners too, including our learning institutions, trade unions, local authorities and the third sector.
That there is a need for proportionality and flexibility in addressing varying needs of businesses of different sizes, types, and locations across Wales.
And that making a difference is about more than simply changes in policy – it is about cultures, behaviours and ways of working.
All of those points have been used to develop our new operating model which I launched earlier this week.
The Economic Contract sits right at the heart of that operating model and will develop a new and strengthened relationship with business that drives inclusive growth and responsible business behaviours.
It means that businesses seeking Welsh Government support will now have to enter into an ongoing dialogue with us that will move the relationship away from coexistence and towards collaboration.
We will expect those businesses to commit to growth, fair work, reducing carbon footprints, health, skills, and learning in the workplace – behaviours already exhibited in many successful and responsible businesses.
And while we will recognise those businesses already taking steps to adopt responsible business and employment practices, we will encourage and support others to take a similar path.
It is about engagement, incentive, and spreading good practice – a genuine, reciprocal “something for something” approach.
While the Economic Contract focuses on what businesses are doing today, it is our Calls to Action that will prepare business for tomorrow. We want to work with business to co-invest in the types of investment that will help them to futureproof and will strengthen our economy today and for future generations.
So from now on our five Calls to Action will be the new lens through which we will channel our direct business finance.
They will challenge government and businesses to look at future investment through the contribution it will make to innovation and entrepreneurship; R&D and automation; exports and trade; high-quality employment and skills; and decarbonisation.
Together, the Economic Contractand Calls to Action form the basis of our new approach aimed at ensuring public investment with a social purpose – and from this week all new business investment proposals that come forward for direct Welsh Government financial support will be subject to this new prism.
Over time, I want to broaden the scope of this new approach and embrace direct financial support to business across all of government. However, this is a significant change – and I want to ensure we implement it well and use our learning from this implementation.
Another change this week is the launch of our Economy Futures Fund, which is a direct response to calls from businesses and others for a simplified and streamlined approach.
Businesses undoubtedly value the financial support we provide and it plays a big role in helping some to fulfil their aspirations to sustain and grow.
However sometimes the sheer range of schemes, programmes and funds on offer can be confusing and complex. This new fund is much clearer and more responsive.
I am also establishing a new overarching ministerial advisory board alongside a parallel process to streamline existing advisory bodies where possible and practicable.
The board will chaired by Sir Adrian Webb, and will complement existing social partnership arrangements and provide a strong external mechanism for challenge and advice to support effective implementation of the Economic Action Plan.
The elements of the plan launched this week are just the start and we have other important work to do, including around regional economic development and wider cross-government activity.
We will focus on these areas in the second phase of implementation and to help take this forward I am establishing, and will chair, a crossgovernment delivery board of senior civil servants.
Finally, throughout the delivery of this plan, I want us to learn from international best practice, and this will include opening ourselves up to constructive challenge from the OECD and other international experts in the economic development field.
A bold move, some might say, but a move that demonstrates our absolute commitment to using the Economic Action Plan to build the strong foundations for inclusive growth that we need, to supercharge the industries of the future and to empower our regions so the fruits of prosperity fall much more evenly across Wales.