An Economic Strategy for Wales Listening to alternative perspectives

Ahead of the development of a new Economic Strategy for Wales later this year, the National Assembly for Wales’s Committee on the Economy, Infrastructure and Skills considered some alternative perspectives on what it could include.

The Committee held a series of thematic seminars in the 2017 Spring term, designed to challenge conventional thinking and stimulate discussion.

What might an effective, inclusive strategy, which works for everyone in Wales, look like?

Experts were invited to share their research and knowledge with the Committee.

Russell George AM – Chair of the Economy, Infrastructure and Skills Committee

“This series of discussions has been one of the most interesting and stimulating pieces of work the committee has undertaken to date.

We wanted to hear voices that challenge some of the accepted and conventional wisdom that has shaped successive strategies.

We wanted to question the very pillars on which economic strategy should be built, and see what ideas emerged.

The Committee has reached no conclusions – that wasn’t our aim with this particular piece of work. What we have done is provided a platform for ideas which we hope will be considered by the Cabinet Secretary and his department as they work on the strategy. We will certainly use what we have learned when we come to scrutinise the strategy later this year.

This short report collects together some of the key facts, quotes and provides signposts to further information across the five areas we considered.

I hope you will find it as interesting as I have.” - Russell George, AM

The Challenge

The Welsh economy faces a number of difficulties. Some of these are unique to Wales, whilst others are evident across the UK.

  • Compared to other devolved nations and English regions, Wales has the lowest Gross Value Added (GVA – a measure of economic output) per person.
  • Many communities still suffer the negative effects of globalisation and deindustrialisation. Inequality and poverty persist; some depend highly on a single employer, putting them at risk.
  • A gender pay gap exists – by one measure, women earn 15.7 per cent less than men. Many women are underemployed or stuck in part time work when they would rather a full time position.
  • Habitats and species are being lost, adversely affecting biodiversity.

The expert witnesses discussed some of the ways an economic strategy could address these issues in a series of five sessions looking at women in the economy; the economy and the environment; the future of the Welsh economy; quality of work; and the foundational economy.

Women in the economy

Many women face a number of unique economic challenges; lower wages through part-time work, a childcare gap, underutilisation of skills, and more.

See more about gender equality and its indicators in Wales

How could an economic strategy cater for the needs of women in the economy? On February 2nd 2017 the Committee heard from:

Helen Walbey UK policy portfolio chair for diversity and health, Federation of Small Business; Dr Alison Parken Senior research fellow, Cardiff University Business School Director of the Women Adding Value to the Economy (WAVE) project; Natasha Davies Policy and research lead, Chwarae Teg

“Women have tended to move into the labour market in areas that would have been previously seen as things that women know naturally how to do: caring work, healthcare work, educational work, administrative work. Those things are not valued in the same way as much of the skilled work that men tend to dominate.” - Dr Parken

“This issue of cultural change and gender stereotyping is really important. Children are aware of gender roles from when they are five years old.

We need to look at how this economic strategy embeds into schools and the choices that we are making available to young Welsh women.” – Ms Walbey

“An important role for an economic strategy is to talk about what foundations should the Welsh economy be based on, and I would make the argument that it has to be based on a foundation of quality employment and decent work, because that will inevitably benefit women.” – Natasha Davies

“When women’s work is most often offered on a part-time basis, the choice to work full time is removed, [and] they seem to be fairly dead-end jobs – there’s no career ladder, little opportunity for job enrichment, and workplace learning is difficult to come by.” – Dr Parken

The Committee asked the panel for their 'key asks' of the upcoming economic strategy. See their responses below.

Suggested further reading.

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The Economy and the Environment

A Prosperous Wales is one of the seven goals set out in the The Wellbeing of Future Generations (Wales) Act 2015. This goal sets an aspiration for Wales to be:

An innovative, productive and low carbon society which recognises the limits of the global environment and therefore uses resources efficiently and proportionately (including acting on climate change); and which develops a skilled and well-educated population in an economy which generates wealth and provides employment opportunities, allowing people to take advantage of the wealth generated through securing decent work.

How could an economic strategy need to be structured to meet this goal? How might the strategy deliver economically more generally?

On February 16th 2017 the Committee spoke to:

Anne Meikle Head of WWF Cymru; Professor Calvin Jones Professor of economics, Cardiff Business School

“What does this circular, zero-waste economy look like, and how do you get there? We’ve done some very good things that are about trying to reduce the amount of waste, but you can only get part of the way to zero waste by recycling things better. You have to redesign them.” – Anne Meikle

“I’d take £1 billion or £1.5 billion away from the M4 and I would just pump prime renewables everywhere in Wales” - Calvin Jones

“You should consider energy efficiency, retrofitting of buildings and everything else, as part of the national infrastructure programme.” – Anne Meikle

“If I was king of the world, I wouldn’t have an economic development strategy, and do you know what? I’d just abolish the department and I’d rename it the skills department and I would just concentrate on making sure the next generation of Welsh kids grew up to be more highly skilled, with a wider range of more resilient attitudes and aptitudes.” – Calvin Jones

“We could increase GVA by inviting a shedload of geneticists, lawyers and accountants to come and live in Cardiff Bay. Would that help? Well, only in a very narrow sense. I think there’s an issue about who we are helping.” – Calvin Jones

Suggested further reading

The Future of the Welsh Economy project

Academics working with the Hodge Foundation recently reported the findings from the ‘Future of the Welsh Economy’ project, whose main objective was to identify the best measures and policy options for triggering transformative change in the Welsh economy.

On February 16th 2017, the Committee spoke to three of its key contributors:

Professor Gerry Holtham Visiting professor, Cardiff Metropolitan University; Professor Rob Huggins Professor of economic geography, Cardiff University; Professor Brian Morgan Professor of entrepreneurship, Cardiff Metropolitan University

“You need to get economic development out of politics – that’s what we need.” – Professor Morgan

“I think we would plead for something that is long-term in terms of an economic development strategy. You know … if we’re going to see real change, maybe it’s going to be generational, in a way, and we really need to take that into account and sow some seeds that will really nurture the economy over the long term.” – Professor Huggins

“We need to be offering that type of financial package that is attractive in terms of future finance, in terms of continuity finance. We need to invest in entrepreneurship. We need to make sure that we have got those starter units that small businesses can start up and grow and flourish, and we need that infrastructure plan.” – Professor Morgan

The Committee Chair asked each Witness what they specifically thought should be included in the economic strategy:

Suggested further reading

Quality of Work

Many areas of Wales are challenged with high levels of unemployment and low wages through the cumulative effects of deindustrialisation and globalisation. A proliferation of part time work, temporary employment and zero-hours contracts have contributed to declining job security and the challenges this brings.

How could an economic strategy help to improve employment conditions for Welsh workers in an inclusive way?

On 15th March 2017, the Committee sought the views of experts researching in this area.

Nisreen Mansour Policy and research officer, Bevan Foundation; Francis Stuart Policy and practice officer for UK Poverty programme Oxfam Scotland

“We need to be communicating the benefits of ethical employment practices much more. We know that there are benefits around productivity, particularly around retention and recruitment, and employers need to be aware that, actually, it makes good business sense to be doing this – it’s not just about creating fair employment.” – Nisreen Mansour

“The Living Wage campaign … is a good example of something that has had impact. And I think that’s partly because it’s a broad-based campaign with a significant element of support from civic society organisations. It’s a recognisable brand.” – Francis Stuart

Oxfam’s Scotland’s research asked 3,000 people across Scotland:

“‘What do you need to live well in your community?’ … Top of the list were things like good physical and mental health, and a decent, safe and affordable home to live in. So, that, to us, was about questioning the model of economic development and saying, ‘Rather than just focusing on economic growth all the time, you need to focus on these types of things that matter to people.” - Francis Stuart

Suggested further reading

The Foundational Economy

Past economic development strategies have tended to focus on high-value manufacturing and exporting sectors. Although these are vital to the Welsh economy, many have argued that this excludes the ‘foundational economy’ – more mundane, pervasive part of the economy which provides every day goods and services vital to everyday life.

Assembly members debated the foundational economy in Plenary on March 8th 2017.

On March 15th the Committee spoke to a prominent academic within the Centre for Research on Socio-Cultural Change (CRESC), whose recent work suggests that a stronger focus should be given to the foundational economy.

Professor Karel Williams Professor of accounting and political philosophy University of Manchester, CRESC

“I think what we need to do is to say, ‘Look, we have activities like care. How can we build better jobs? How can we build grounded firms, rather than give way to anonymous chains in these areas? How can we deliver more consistent quality service? How can we say that this is being done, ideally, on a consensual, cross-party political basis, so that we rebuild trust with the voters?’”

“I think we have really got too much into a kind of cringing supplicant posture vis-à-vis big business—you know, ‘Thank you so much for coming to us, we are so grateful. Can we please build you a bit more infrastructure?’ … Everything in society is a two-way street of rights and responsibilities, and within that two-way street, I think people like utility companies, like supermarkets, who are taking household spend on a semi-captive basis from an area, need to be asked, ‘What are you putting back into the community?’ And I don’t think that, in sheltered activities, to offer decent contracts to farmers would bankrupt the supermarkets.”

“…If we could get beyond thinking foundational economy, and talking foundational economy in the next stage to doing foundational economy in areas like adult care, in areas like food, supermarkets and things of that sort, I think Wales could be a world leader in that kind of innovation of policy, which had … welfare implications for the population. What would you want to be proud of? That we have adult care arrangements that people from all over the world would want to come and see would be really nice.” - Professor Karel Williams

Suggested further reading.

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