Wales was the first country in the world to industrialize, based on readily available coal and easy access to water. Since then, the nation has moved far beyond its declining traditional industries to become a world-leader in sustainability, digital technologies and life sciences. The government has invested heavily in building up new research-driven sectors. More than 700 multinational companies have established themselves in the country to take advantage of the country’s strong government support and close access to European markets, including corporate giants such as Toyota, General Electric Company, Sony and Airbus.
The country has solid industrial and trade relationships with Europe and North America, particularly with the large U.S market where it holds strong historical ties. The industrial structure in Wales is predominantly composed of small and medium-sized enterprises, with more than 87 percent of all businesses having less than 10 employees. Its nascent startup culture is ushering in a new era of opportunity for the grass-covered state as nations around the world take advantage of openings in the market after the COVID-19 crisis.
Wales-U.S. Partnership
The Wales-U.S. relationship stems from its strong historical roots. The Welsh were some of the first settlers in America and more than 10 million American citizens now sport a Welsh surname. Today, the U.S. is the largest source of foreign direct investment into Wales in terms of developments, with 270 U.S. businesses having a home base in the country that employ around 50,000 people. Additionally, the U.S. is Wales’ largest trading partner outside of Europe, accounting for 14.7 percent of annual exports equal to $3.27 billion. As traditional trade markets are shaken due to Brexit, the U.S. stands out as a prime collaborator with U.K. countries. The small nation of 3.1 billion has recently shifted its focus on research-driven sectors that make it an important collaborative partner with U.S. industry, chiefly in compound semiconductors, cybersecurity and life sciences. What was once an exodus to a new land of opportunity is now an influx of investment during a new era of industry.
Higher Education
A large attractor for companies looking to enter the Welsh market is its access to strong talent and state-of-the-art research. The country is home to nine universities, including two research-intensive academic institutions. University of Cardiff and University of Swansea boast robust science, technology and engineering research centers that actively drive the country’s ambitions to grow its up-and-coming advanced manufacturing, life sciences, clean technology and digital sectors. The state’s Global Wales program set up to support the sector and increase international participation has raised the number of international students to more than 25,000 per year and is actively engaging with the American, Indian and Vietnamese markets to draw talent from across the globe. The initiative is also seeking to redraw research alliances with academia in Europe after Brexit to keep the country’s education sector at the forefront of modern transformation.
Life sciences
Wales is home to an extremely vibrant life sciences industry with a wide international footprint. The sector’s more than 360 companies have an approximate turnover of $2.7 billion and employ more than 12,000 doctors and researchers. About 75% of its efforts are export based, with direct contributions being made in Spain, Ireland, Canada, Brazil, Qatar and Singapore, among others. Natural and medical health sciences make up 54% and 39% of Wales’ total research output respectively. Key areas such as regenerative medicine and stem cell research have taken bold steps forward and attracted a significant amount of foreign direct investment. The government established a dedicated Welsh Life Science Investment Fund to support continued transformation of the sector, which has so far invested more than $66 billion towards putting Welsh health science research and innovation on the global map.
Tech and Innovation
Wales is one of many nations focusing its attention on innovation and technology to turn around its economy. The country has been successful in attracting funding from the European Union’s innovation platform Horizon 2020, which saw 189 Welsh participants receive $92.7 million in funding. New digital technologies mark a new era of opportunity for the country, primarily in the areas of advanced mechanics and fintech. Wales has successfully produced a prominent cybersecurity sector on the backs of large aerospace companies Thales and Airbus. The two have jointly invested $37.5 million towards research centers geared at cybersecurity in partnership with the state and academia. The state recently proposed a refreshed innovation strategy that looks to change the flow of investments towards smaller businesses and regional areas to diversify the economic landscape, targeting key sectors and putting innovation in the nation’s driver’s seat. The roadmap looks to better connect businesses with the country’s many public research centers, science parks, industrial incubators and enterprise hubs. Most recently, two world-class innovation hubs were introduced to the country in semiconductor applications and advanced manufacturing. The medieval nation traditionally known for its castles and crags now sits poised to blossom into an international hub for digital and future technologies.
Path to Net-Zero
Wales possesses immense energy potential from renewables, making it a prime location for investment as nations around the world actively transition away from fossil fuels to meet net-zero targets. Currently, the Welsh energy and environment sector is worth $6.4 billion and employs more than 58,000 workers. Since 2010, the Celtic nation has grown its renewable generation capacity by 449 percent from 789 MW to 3,540 MW. The nation recently pledged to up renewable energy generation by more than 100 MW between 2021 and 2026 to meet an ambitious target of locally producing 1 GW by 2030. To do so, the country is focusing on untapped opportunities in onshore and offshore wind, solar and tidal energies. However, Wales requires massive investments and industry collaborations to green light projects and upskill its workers to successfully complete its goal of being a renewable energy hub.
Agri-Food
Wales’ agri-food sector has traditionally been the nation’s economic backbone. Its famously rich green landscape has become a critical resource, with around 80 percent of land in Wales managed in some way to support farming. The $7.82-billion industry is supported by 217,000 workers in agriculture, food production, farm equipment manufacturing, freezing, distribution and food import and export. The Welsh government is highly active in supporting the agri-food sector with recent investments of $24.6 million put towards promotion and development of the industry, particularly in the realm of sustainable farming. Given that only 1 percent of all agriculture, forestry and fishing companies in Wales employ more than 10 workers, specific emphasis has been put on upping access to critical and state-of-the-art digital technologies and practices that are more easily accessed by larger corporations. The net exporter of agricultural goods sees a green horizon for its agri-food industry and aims to keep it that way.
