The Future Calls for Inclusive Growth – Part 2

Professor Sir Adrian Webb outlines his vision of where Wales’ economy needs to go to ensure green, sustainable growth.

This is the second part of two essays on the future of Wales’ economy. You can read part one here. This was originally published by the RSA.

What should Wales prioritise?

The economic downturn comes first; and we must avoid a lost generation.  The UK answer has been a financial safety net for business and individuals. A Skills Safety Net must now be a priority.

Re-skilling, and transferable skills for young people entering the labour market into unemployment, requires a scale of productive activity that an economy in downturn cannot itself generate; we have to look beyond it.

Repairing the natural world through multiple conservation projects would be one example, a potential route to new skills and access to apprenticeships and internships through a ‘Conservation Corps’.

Wales needs a Welsh Skills Safety Net a KickstartPlus – with a strong focus on opportunities at scale for young people through imaginative initiatives.

Longer term the answer cannot be particular sectors or businesses per se, nor can it be infrastructure, essential as it is to underpin inclusive growth. Scarce resources and political capital could usefully be focused on: strengthening Welsh research and development and innovation (which in Welsh companies is an early victim of Covid-19); the commercialisation of our intellectual property; a concerted drive to expand and sustain new firm incubation; and the refocusing of the skills agenda.

Fundamentally however, priorities should be guided by the overarching vision and green growth must be to the fore. The limited amount of green investment that followed the financial crisis proved to be highly cost effective; more and better is needed this time.

But green growth is not only about tackling the climate crisis; reversing the collapse in bio-diversity is also an existential necessity. 

Affordable new-build zero-carbon homes must be part of any wellbeing and anti-poverty strategy.”

Combatting climate change and the loss of bio-diversity (and a Conservation Corps) should be part of a long-term green growth strategy as well as a short-term response to a Covid-19 induced economic downturn.

The foundational economy highlights the principle – ‘stickability’ – anchored growth that maximises the multiplier effect. Indeed, prioritising this in Wales suggests the need to champion stickability as a core principle: according priority to the development of ‘anchored’ organisations and activities that will be long-term drivers of sustainable growth in Wales and which will substantially promote local supply chains.

Many possibilities across many economic sectors can fit this template, by no means all of them in high tech or advanced manufacturing. Tourism and hospitality is an anchored activity with significant multiplier potential and one in which the necessity of a renewal strategy is recognised.

The creative industries are an international fast growth area with gaming as the economic powerhouse. Success in the creative industries is about cultural underpinnings not just the traditional levers of economic development of infrastructure, skills and financial incentives.

A vibrant, liberal, cultural ambience attracts creative people and companies. Wales has anchor institutions – the BBC, S4C, and TV/film production capacity – which provide that ambience and the core of a cluster on which to build.

To prioritise housing and the national estate, could potentially be a triple win: anchored green growth with major social benefits; major opportunities for local sourcing; and imaginative engagement of local communities.

Affordable homes help combat inequalities in health and educational opportunity, alleviate homelessness and improve mental wellbeing. Affordable new-build zero-carbon homes must be part of any wellbeing and anti-poverty strategy.

A major new build programme at scale requires more than traditional building methods. Factory based modern methods of construction (MMC) could help address issues of pace, quality and scarce traditional building skills.

Though not new internationally, these methods are poorly developed in the UK. There are issues that require government attention and support but the potential boost for foundational economies is apparent.

Priorities derived from the vision outlined here could help transform Wales and act as a marker for other parts of the UK.”

Local small and medium size enterprises (SMEs) could feature strongly in production and supply chains; a regionally enabled generation of such SMEs in the weakest local economies could mitigate place-based economic inequalities.

Affording a home is about total outgoings not just rental or purchase costs. Decarbonising the housing stock is crucial to the green agenda, and it would also deliver lower energy costs and reduce fuel poverty.

The Welsh Government has committed to an ambitious timetable for decarbonising social housing. Crucially, decarbonisation illustrates how ambitious we could be; how whole communities could be actively engaged in shaping their futures. The current focus on retrofitting of insulation in social housing building-by-building must not be derailed, but it need not be the limit of our ambitions.

We could expand our ambition by engaging with whole communities, private as well as social housing, all public buildings – including the NHS, schools, colleges and universities – and the willing private sector. That would permit a communal approach to technologies that are not affordable on a house-by-house basis (such as land-based wind generation and ground source heating).

Syniadau uchelgeisiol, awdurdodol a mentrus.
Ymunwch â ni i gyfrannu at wneud Cymru gwell.

There are choices to be made that can be tailored to local situations and democratised to energise local engagement, reduce alienation, enhance social cohesion and recycle expenditure locally. Such an approach might do more to mobilise consent for change than the culling of planning constraints proposed in England.

As a green growth priority that would strengthen foundational economies and expand engagement and agency, Wales should embrace:

  • Major programmes in new-build affordable housing at scale and the adaptation of the existing stock to reach the goal of carbon neutrality;
  • Innovative funding solutions to match the scale of the need and opportunity;
  • Modern methods of construction as part of the new-build agenda, with a focus on promoting local foundational economy supply chains, especially in the weakest local economies;
  • Research and development and skills programmes in higher and further education to meet the needs of the new-build and decarbonisation agenda; and
  • A strategy to achieve net carbon zero outcomes for whole communities based on participative co-design of locally appropriate combinations of reduced energy demand and green energy production, storage and shared supply across all public buildings and willing private house owners and businesses.

A Pathway to Renewal

Wales is very actively engaged in discussion of post-Covid-19 and post-Brexit renewal. 

Inclusive green growth is essential to address gross material inequalities and existential threats facing our society. Pursued in a way that systematically extends agency and participation it could enhance personal wellbeing and social cohesion. It could also help stabilise and renew our troubled democracy.

All articles published on the welsh agenda are subject to IWA’s disclaimer.

Prof. Sir Adrian Webb is former Vice-Chancellor of the University of Glamorgan and current Chair of the Welsh Government Ministerial Advisory Board on the Economy.

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