27 Apr INTERVIEW WITH KELLIE BEIRNE, DIRECTOR, CARDIFF CAPITAL REGION
Wales can be ambitious about economic growth and its advancement with societal missions given its strengths spanning life sciences, semiconductor clusters, Fintech, cybersecurity and the creative industries.
What are the region’s industrial strengths? Upon what key pillars does the Welsh economy sit, and how is the country positioning itself to enter a new era of industry?
Well, it’s not enough for us to “do well” in Wales; we want to do well and do good, which comes down to balancing ambitions for economic growth and advancement with societal missions and making societal progress as a small, quite compact, but very well-connected nation. Wales was the crucible of the Industrial Revolution and things have changed significantly ever since, as we are now dealing with the aftereffects of deindustrialization. However, we can see a bright future.
In the Cardiff Capital Region, in particular, we have decided to focus on a small number of things that we can do well. We have to be focused and select the sectors and clusters around which to grow ecosystems and create the conditions where we can connect people, capital, property, ideas, skills and the talent we want to develop in the region. Our work and research show that the kind of innovation ecosystems that we should be developing are a small set of sectoral specialisms. And the first is in advanced compound semiconductors.
We are the home and global hub of the world’s first compound semiconductor cluster and the Mega Foundry in Newport which is owned by the CCR City Deal and supported by the U.K. and Wales governments, which is vital because advanced compound semiconductors are ubiquitous: they are in every single kind of device, be it in energy systems, 5G, communications, medical devices or components for automotive.
With the current global shortage of silicon chips, we have a unique advantage in the epitaxy wafer market. Unlocking this, through entities like CS Connected — the cluster group for the sector, supported by the U.K. and Welsh governments, industry, academia and the CCR — is of critical importance.
Our other strength is around life sciences: medical devices and diagnostics, in particular. There are many microbusinesses and SMEs that don’t just have local and domestic strengths but also operate within global supply chains; they are part of an international picture. Post-COVID, the opportunity to delocalize supply chains could be of massive benefit to Wales. We can be very quick to respond to some of the shocks that we see in the international economy because we have well-developed systems, and relationships that span the public, private, community and university sectors.
The next area is Fintech or, as we like to describe it, “insuretech” because of a strong comparative advantage in the sector. We are home to Confused.com, GoCompare and Admiral, which is a FTSE 100 company. We see rich and diverse innovation in this sector coming from the likely future of financial systems and processes. Also, technologies in the green sector are being supported by the region through collaborations such as Fintech Wales — and that applies to Wales as a whole.
We also have some excellent strengths in our cybersecurity industries. Over time, this has become increasingly important; not just to businesses in the private sector, but also to the public sector and to civil society. Security is obviously key to all of us in this digital age and we are pleased to be co-founders, alongside the Welsh Government, in the region’s Cyber Innovation Hub.
The other sector of which we are incredibly proud is our creative industries. We are home to media.cymru — an industry hub in Cardiff that has a broad reach across many different industrial and public-sector partners and that comprises 1,300 SMEs. For instance, BBC Wales, S4C and Cardiff University’s prestigious Centre for Journalism is located in the heart of Cardiff, surrounded by many major production and studio houses. Our studio and production sector runs right across the region, and we are currently pushing for an expansion of film and studio by creating production space across the entire patch that we cover.
There is an extraordinarily rich tapestry in Cardiff and the theme of advancing to Net Zero transcends all of this. In addition, where I believe we really stand out is our many dynamic public-sector jobs; a huge asset because the public sector has a role in identifying and convening around some of the biggest societal and industrial issues of today, and in using its balance sheet to leverage the innovative procurement of new innovations and new technologies.
The Welsh public sector and its success in initiatives supported by WG, such as SBRI and CCR’s own Challenge Fund, show how public services can innovate and bring people and partners together, to develop new solutions to intractable problems.
Our mission, as supported by both the Wales and U.K. governments and the ten LAs that make up the Cardiff Capital region and contribute to our £1.3 billion City Deal, is very much about taking a distributed approach to growth and promoting a shared sense of prosperity. It is not enough to just create hubs of growth. We must manage supply-chain impacts, perform entrepreneurial and public-policy experiments, grow the skills and talent base across our entire country and drive inclusive and distributed growth. Sustainability and growth are important, but how we distribute and spread those benefits is critical to our values of integrity and fairness.
Can you give us an overview of the kinds of success the Cardiff Capital Region City Deal has had in the recent past? What kind of strategies and targets is the organization looking at, in order to reignite the economy?
Our City Deal comprises a £1.3 billion investment fund, and is supported and financed by the U.K. and Welsh governments, and the ten local authorities that make up the Cardiff Capital Region; that is, it touches over 50% of the Welsh population, and accounts for more than half of the total economic output of the country. It covers a very densely populated area with a high proportion of industries and private-sector companies — mainly SMEs, both in the service sector, foundational and tradeable economies, and in the specialist innovation-rich clusters I have spoken about.
Around £730 million of the City Deal Investment Fund is going into delivering the Southeast Wales Metro. The metro is extremely important because it is about enhancing connectivity, making sure that we not only move people around the region but also bring people together — to connect, make and create. There is a real focus on having purpose and the economic growth structure behind transport infrastructure is critical. It is also about ensuring that this is compatible with our aims around the journey to net zero and that we do more to encourage people out of their cars and into public transport and active travel modes of transit.
The remaining £500 million of the CCR Investment Fund is deployed in line with our investment strategy. We see the public sector in the words of Professor Mariana Mazzucato, who devised the Entrepreneurial State principles at UCL. She says that the public sector can help create and stimulate new markets, and should fulfil its role around risk-reward, responsibility and distributing growth.
We therefore see our role as that of a co-investor, leveraging as much private-sector investment as possible. Wherever we can, we want to see a return on our investments. Essentially, we are trying to live off the interest as a principle, and not just spend the capital and empty the fund: we want to leverage our investments for ongoing impact.
We have therefore assembled our investment fund in relation to infrastructure, innovation and “challenge” priorities. In terms of infrastructure, we want to make sure that the region is well-connected, has good digital infrastructure, good access and connectivity, and a good skills base as we have a highly qualified population in the Cardiff Capital Region, with near to 70,000 students. We are focusing on research and development intensity and on how to create the conditions for an R&D system that takes the best ideas and IP from universities and FE colleges and works with industry and business to help bring them to life.
The challenge fund is of real interest. Rather than assuming that we have all the answers in the public sector and in the post-COVID era, we have zeroed in on local wealth-building and on untapping opportunity in the every-day, or foundational, economy. We have established a fund, which we call our Local Wealth-Building Challenge Fund, where we are training public servants to make sure they have the skills and capabilities for 21st-century public service and can identify and solve problems in innovative ways.
Then we have a Challenge Fund that focuses on priorities such as the future of high streets, more rapid decarbonization, food resilience, and the future of hospitality. This allows quick experimentation, permitting the public sector to work with the private sector using SBRI principles to explore new ways of responding to issues and challenges that create opportunities and — potentially — commercial markets.
Alongside all of this, we invest in skills and talent development aligned to our cluster specialisms — a new Masters course for cyber; developing new short-course academies; a Venture Graduate scheme: and investing in supporting young and female entrepreneurs to innovate. I feel very proud of the investment we have made in the adventure tourism attraction Zip World, which is up at the former Tower Colliery site in Hirwaun in the northern valleys. It’s a fantastic project in that it demonstrates our commitment to the foundational economy and leverages the value of investment in developments like the dualling of the new Heads of the Valleys Road.
Again, this is great for local wealth-building and for ensuring local communities engage and share in the opportunities brought about by being a world-class tourism destination. Industry, R&D and infrastructure are all important, but ensuring we invest in the foundational economy and local wealth building in a grassroots way is also critical to our future success.
What significant trends are taking shape in SMEs in the Cardiff Capital Region and what kind of support is the organization and government giving these entities, in order to drive the economy?
Over half our workforce in the region is qualified to degree level. One of the major trends we are seeing is the need for highly skilled specialisms, and without delay. This calls for short, sharp bursts, to reskill and upskill. We are supporting business and industry through our plans for short-course, “assured” academies, and working with partners to enable work-ready skills to be deployed at speed.
We are in the process of finalizing a £50 million innovation investment fund which will focus on enabling innovative SMEs that want to scale up to do so swiftly but sustainably. We hope that our successful fund manager will bring another £50 million to the table, too; so we are co-funding some of the best innovations and targeting new, inward investment opportunities. This is important because U.K. trends show that public investment in R&D can help “crowd in” private-sector investment in R&D.
The other important trends surround ESG. We want to ensure the businesses we work with engage in ESG and EDI in meaningful ways. That is a huge agenda item because more diverse investments, economic gains and benefits all rely on diversity in the workforce (including boards and committees) and on ensuring that businesses embrace equality, diversity and inclusion in order to influence positively the decisions they make and the work that they do. We can all learn a lot from the growing B Corp movement.
The Cardiff Capital Region is in the process of finalizing the acquisition of a former coal-fired power station on a 500-acre site in the Vale of Glamorgan. In terms of pioneering our commitment to sustainability, it has two national grid substations and it is coastal which means it has a high tidal range. It also has railway access, and it links to Cardiff Airport and the St Athan Enterprise Zone.
As well as taking further strides towards domestic green-energy generation capability — key to energy security — there will also be important local supply-chain opportunities. In addition, we have the potential to build our own highly skilled workforce and to work with local people and social activists to preserve and enhance the unique bio-diversity and ecology of the site. This project is a great example of how we can demonstrate a whole package of measures that invest in building energy resilience whilst working towards a more sustainable, equitable and inclusive mandate.
What specific areas in green growth do you see as holding potential for collaboration between Wales and the U.S.? What opportunities for investors and U.S. firms would you like to highlight?
There is so much going on in the Cardiff Capital Region. The repurposing of a former coal-fired power station is just one example. There are also opportunities to grow the offshore wind industry, for instance, the Celtic Sea offshore Wind Programme. In the Capital Cardiff Region, we have the world’s second-highest tidal range, so harnessing and leveraging that innate energy source — in terms of tidal power opportunities, barrages and capturing energy from water — is just one example of our innate natural resources and assets working to create indsutries of the future.
From an energy-strategy perspective, we are homing in on the decarbonization of transport. This is a significant issue for us and ties nicely into the Southeast Wales Metro and our ambitions to get more people out of their cars and into active travel and public transport. This approach to transit oriented development is a common thread running through planning policy and broader land-use. It is also key to how we play our part in leveraging the potential of key assets, such as our Ports in Cardiff Newport and the Vale of Glamorgan and Cardiff Airport.
In terms of the energy-generation potential and our recent acquisition of a former power station; we believe green hydrogen will quickly become part of our energy mix. The price of green hydrogen is currently higher than that of grey hydrogen. Many analysts and industry experts say that, by 2030, this could be viable.
Our clusters — from advanced compound semi-conductors and media.cymru to Fintech and cyber — are all open for business and, with the support of the U.K. and Welsh governments as well as CCR, we are pioneering innovative developments in relation to skills, inward investment and shared collaborative research and development programs. And with the overlay of our new £50 million innovation investment fund, we are ramping up the pace and intensity.
We are home to the South Wales Industrial Alliance which is doing fantastic work at the moment around the steel industry, in particular. Wales is a huge producer and exporter of steel and there are clearly huge industry-wide challenges and opportunities around decarbonization.
Industry needs to be decarbonized. FLEXIS is another brilliant collaboration across all universities in Wales undertaking research and prototyping around renewable energies and innovative technologies. Examples of how this collaboration is being leveraged include Bridgend’s district-heating systems. Based in mid Wales and operating across the country is Riversimple, a circular-economy company pioneering a green hydrogen small vehicle that operates via a “mobility-as-a-service” business model. There are some really interesting things going on that undoubtedly present massive investment opportunities for powering the future of a fairer, greener, more equitable Welsh economy.
How would you assess the region’s R&D and education capabilities? How important is it for local industry to create synergies with the research and education sectors, and what are the state and organization doing to foster these connections?
R&D and investing in research and innovations system is a key opportunity in my view, and will reinforce the upward trajectory of the region’s economy. The Welsh government invests in this already through the office of the Chief Scientific Adviser. We have smart specialization programs and ongoing relationships with Europe through Vanguard and MANUMIX. Our universities have extensive research strengths and research excellence and this is evident in sector such as cyber, precision medicine, the Institute for Compound Semiconductors and the brand new social-science research park at Cardiff University — SPARK/SBARC. The U.K. government has deployed two ‘Strength in Places’ fund investments in the region, supported by CCR, the Welsh government and other industry partners. This has supported our clusters program with £100 million of additional investment to date and has supported our approach to inward investment, global trade and global branding. There is always more to do and we are curating all the parts of the system that can best boost our R&D credentials.
What are your ambitions and goals as director of Cardiff Capital Region?
If we are going to have a diverse economy, it needs diversity of opinions, thoughts and people. But you cannot just badge it as ESG (Equality, Diversity and Inclusion); it has to be a critical thread that runs through your culture. In terms of STEM and some of the clusters I have mentioned, it is about ensuring that we have levels of female representation that parallel male ones. Much of that starts with schooling; namely, investing in schools, in programs and in making sure that we start at a young age without excluding anyone.
There is a huge amount of talent in places you would least expect to find it. “Every mind matters” is a significant mantra and something we try to embody in everything we do. I feel particularly passionate about ensuring that everyone gets a chance and has the support, mentoring role-models and networks to achieve the things and embody the values that matter most to them.
One of our programs is the Venture Graduate Scheme for which we have recruited far and wide. We have just taken a cohort of new graduates into our office; having that fresh perspective of free-flowing thought is refreshing and adds something extra to the team, for which we feel truly fortunate.
What potential does the region have and what needs to happen for it to meet its aspirations?
The region has great potential in terms of its economic base and diverse industries but also, beyond that, in terms of its commitment to people. It is really important that we support industries, businesses and workplaces to be the kinds of spaces where people are supported to bring their whole selves to work. Investing in wellbeing is key to this and we are proud of our world-leading Wellbeing of Future Generations Act which pioneers looking ahead and making decisions in the interests of those who are yet to be born.
The Cardiff Capital Region is rich in so many assets. We are fortunate to have a beautiful country: a stunning coastline, mountains, valleys, rural areas as well as fantastic cities. However, more than that, we have people with grit and determination who stay the course.
They are passionate about Wales’ place in the world, and they are such a joy and inspiration to work with. That sense of trust and closeness is critical; really caring about the future and the impact on our future generations. In fact, it is enshrined in legislation here in Wales in that it is a statutory requirement to look selflessly beyond yourself at what is coming down the road. That really characterizes where we want to be as a nation and that sense of foresight is a unique selling point.
Do you have a final message for readers?
If you are looking for a great place to do business and to connect with good, forward-thinking, enlightened people who want to make things happen, inspire innovation, and be the next generation of economic and civic entrepreneurs, this is the place to come and to have that conversation.
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