Welsh Government urged to hold more discussions with entrepreneurs, not just business organisations
For 27 years, Welsh economic policy has prioritised the politics of representation over the discipline of delivery, a pattern that has left the country’s economy underperforming relative to the rest of the UK despite repeated strategies, advisory groups and consultations. Since devolution began in 1999, the gap in GDP per capita between Wales and England has widened to more than £10,500 by 2022, and Welsh productivity has fallen from 86.8 percent of the UK average in 1997 to 80.6 percent by 2017. The same familiar business membership bodies, employer groups and professional networks have consistently been invited into the same rooms as ministers to offer broadly similar views on the same persistent problems, raising uncomfortable questions about whether the system itself is capable of driving genuine economic change.
Critique of the established voices
The dependence on a narrow circle of representative organisations has become a defining feature of economic governance in Wales. These bodies, which include professional networks and employer groups, have provided useful work over the years, acting as bridges between government and the business community at times when ministers needed to hear from the real economy. But after more than a quarter of a century of devolved economic policy, the results speak for themselves: Wales still produces too few high-growth firms, ambitious founders often look outside the country for finance and networks, and public investment still too frequently fails to generate lasting private-sector momentum. The Welsh Government has a statutory duty under the Government of Wales Act 2006 to consult businesses where its functions affect them, and the Business Scheme published in 2008 commits to involving business in policy formulation at the earliest opportunity. Yet stakeholders have noted that consultations can sometimes appear superficial, despite a formal process that includes a minimum of 12 weeks for responses and commitments to publish summary reports. The very characteristics that make these organisations acceptable to government — respectability, familiarity, structure, consultativeness — can also make them insufficient for the challenge of reshaping an economy that has consistently lagged behind.
Why representative bodies fall short
Representation is not the same as leadership, and being present in the machinery of government is not the same as changing the economy’s performance outside it. Many of these organisations are, by their nature, cautious institutions that must reflect a wide range of interests and avoid alienating too many of their members. This tendency to gravitate towards the lowest common denominator rather than the sharpest edge of economic change means they are ill-suited to challenge the comfortable assumptions that have underpinned policy for too long. Recent statistics underline the urgency of the problem: Welsh business births are down more than 27 percent from a post-Covid peak in 2021, more than double the rate of decline across the UK, and the stock of active enterprises in Wales has shrunk since 2021, indicating a contracting business base. Opportunity perceptions remain a significant barrier — only 31.9 percent of non-entrepreneurs in Wales believed there were good local start-up opportunities in 2024, compared with a UK average of 43.2 percent. Fear of failure also remains a notable barrier, while access to finance is a persistent concern, with many Welsh founders reporting they need to go to London for wider venture capital funding despite the role of the Development Bank of Wales. The same bodies that supported the Labour Government for more than 25 years are now expected to sit down with the new Plaid Cymru Enterprise Minister to say much of the same things they said to his predecessor, raising the question of what such continuity has actually achieved. Where are the organisations prepared to push harder, speak more directly and challenge the comfortable consensus? Where are those who, after decades of public investment in skills, infrastructure, innovation and enterprise support, question why Wales still does not have enough firms capable of competing seriously in UK and global markets?
A call for disruptive entrepreneurs
The question is not whether business should continue to have a voice — of course it should — but whether the voices inside the room represent the founders still outside the system, especially the disruptive entrepreneurs who should be at the heart of any serious economic development strategy. Wales needs far more of these individuals and the businesses they build, and the next phase of economic development cannot be built solely around organisations whose primary function is to explain the business concerns of a small number of firms to government. There is evidence that the potential exists: seven Welsh companies made the 2025 Sunday Times Hundred list, including de Novo Solutions in Newport with a 187 percent growth rate and Litelok in Swansea at 59.2 percent. The Wales Fast Growth 50 for 2025 ranked Smart Energy Homes in Cwmbran as the fastest-growing firm, with revenues increasing by 2,672.7 percent between 2022 and 2024. Other examples include Creo Medical in the life sciences sector, which has established hubs in the US and Singapore, and LIMB-art, a producer of prosthetic leg covers, as well as Hexigone, a coatings technology company with global distributors. Initiatives such as the Business Wales Start-Up Accelerator have shown results — LanoTech, a company pioneering sustainable animal feed, secured significant investment after completing the programme. Yet despite these successes, the entrepreneurial ecosystem faces structural barriers. The new Minister for Enterprise, Connectivity and Energy, Adam Price, has declared that Wales is “open for business” and has promised to place “productivity at the heart of its approach,” aiming to halve the productivity gap with the UK within a decade. His government has also announced plans to create a new National Development Agency for Wales, a recognition that the country lacks a clear, authoritative business-facing institution. But there are concerns that this may simply be a reorganisation rather than a fundamental change, and that the agency should be a central economic delivery vehicle with clear, measurable targets.
A simple test of whether anything has genuinely changed under the new government would be for the minister, within his first hundred days, to bring together the founders and chief executives of Wales’s 100 most innovative and entrepreneurial companies for a summit built around one question: what would it take to double the number of Welsh businesses scaling past £10m over the next four years? Not a consultation but a working session of the people building real growth, many of whom have never once been invited into the room. Given the way the civil service in Wales seems terrified of anyone with a radical idea, the comfortable consensus will probably continue as it always has, with the same familiar faces sitting around the same table. It would be a truly new start for devolution if those in power were willing to fill the room where it happens with the incredible businesses that are building the country’s future.
