Innovation Europe > News > Innovation EU Vol2-1 > Innovation Wales

Overview

Occupying much of the western edge of Great Britain, Wales is one of the four nations that make up the UK. It has a population of 2.9 million, the majority concentrated along the southern coastal belt and in the north east and its capital city is Cardiff, an international city of 315,000 inhabitants, containing a strong business base and worldrenowned sporting and cultural venues.

Other major centres are Newport and Swansea in the south and Wrexham in the north. Although integral to the UK, Wales has its own distinctive culture and language. English is spoken by everyone, while Welsh is also spoken by 20% of the population.

Workforce and population

An educated and productive population is one of Wales’ key competitive assets. There are a host of positive trends that offer even greater human resource benefits to businesses.

• Wales’ population is rising steadily.
• The working-age population is also on the increase.
• Growing numbers of young people are in further and higher education and formal work-based learning.
• Staff retention is among the highest in the UK.
• Industrial disputes are well below the national average.

At present, the Welsh workforce numbers around 1.3 million and the working age population is projected to increase by a further 105,000 over the next decade. The proportion of the workforce involved in manufacturing is around 17%, compared to the UK average of 14%.

Over the past seven years, the proportion of the workforce involved in service industries has grown by around 160,000 to nearly 910,000. Of these more than 136,000 are engaged in financial and other business services. This represents a rise of around 22% over the same period.

Productivity

Manufacturing productivity in Wales is 8.6% above the UK average. Wales’ Unit Labour Cost (ULC) in manufacturing - the combination productivity and wages - is the lowest in the UK. The country has one of the EU’s highest staff retention rates, with only 3% annual turnover in some sectors. In the contact centre sector, notorious for attrition problems, Wales has the highest retention rates in the UK by a considerable margin.

Education

Wales’ 13 universities or institutes of higher education have a current combined student population of more than 100,000. In addition more than 250,000 are studying both full and part time at Wales’ 26 colleges of further education (FE). FE students are pursuing a wide range of vocational courses, many supported directly by industry.

Welsh universities are highly rated. The most recent Research Assessment Exercise (RAE) ranked 44 Welsh university departments as being of international standard.

Business and innovation

Despite the recession, investment in innovation has continued in the private sector in Wales. During 2008-09, 17% more Wales-based Knowledge Transfer Projects were approved than during the previous year.

This echoes performance at the UK level, where 24% more new KTP projects were approved. In line with expectations, output volume rose for the first time since April 2008, after five consecutive quarterly declines. A similar increase is forecast in the next three months. Average unit costs fell at a slower pace than predicted and this trend is expected to continue, with only marginal declines predicted over the next three months.

Domestic prices fell for the fifth consecutive month, defying expectations of being broadly stable. Export prices enjoyed a significant rise for the first time since October 2008 to buck the predicted decline. This situation is expected to continue over the next quarter.

Employment rose in the three months to January 2010 to surpass expectations of stabilising after five consecutive quarters of decline. And investment intentions for the coming year are more upbeat than in recent months. Increasing operating efficiency is the key driver for planned capital investment in 2010. The proportion of firms planning investment in expansion and growth has also risen significantly above the long-run average in Wales.

A total of £131 million of European grants were awarded to 34 different Welsh organisations during the period 2000-2006 to help develop a greater culture of innovation in Wales within 105 projects, which had a total value of a quarter of a billion pounds.

With regard to the number of new companies in high-technology sectors, a target of 2,000 was established for the programme and many more incentives have been put in place to further develop the opportunities in Wales.