The future will bring massive challenges to the Welsh economy, which has long been heavily dependent on what some would call ‘sunset’ industries. There are many schools of thought on just how far we should support our more traditional industries, but I believe we need to recognise the importance of traditional sectors, embrace them and make them work for us in the future as they have worked for us in the past.
In Wales we are proud of our automotive and manufacturing sectors. The 2003 figures show that manufacturing accounted for almost 20 per cent of GVA (gross value added) in Wales, compared with just over 15 per cent across the UK as a whole. That represents a considerable difference in our relative dependence on a traditional industry base. The very latest figures show that in December 2005, manufacturing still accounted for 14.7 per cent of total employee jobs in Wales, compared with 11.5 per cent across the UK as a whole.
Twenty-first century manufacturing, including a thriving automotive industry, is providing our people with decent jobs and a bright future. Gross disposable household income per head in Wales has increased by 25.6 per cent between 1999 and 2004, compared with an increase of 23.6 per cent nationally during this period. Only the East of England has seen a bigger increase than Wales over this period.
Wales is moving forward on the knowledge agenda, and as part of this 21st century agenda, we value the highly skilled jobs that a modern automotive sector provides. We understand the difficulties presented by overseas competition, of course, but, because of the importance of the sector to our overall economy, we are resolved to keep our market share.
There are several Welsh initiatives that underpin and enhance the industry – one of which is Accelerate Wales, the first major initiative for the automotive industry in Wales. It draws upon the skills and expertise of its partners in terms of business support, development and education and is supported by significant resources. Accelerate Wales adopts a top-down supply-chain-specific approach. Accelerate will provide resources for the sector in the form of Supply Chain Champions, each being based at a ‘lead’ company. They project manage activity to improve the performance of companies within their supply chain. Like other regions within the UK, we are very keen indeed to keep supply chain business as close as we can to avoid contracts going ‘up the line’ to England or further.
In Wales we are doing all we can to improve the skills of our workforce to ensure we can service a successful ‘hub and spoke’ supply chain model. That means encouraging and developing high-specification, up-to-the-minute courses at our further and higher education institutions. It also means fostering an interest within our future workforce. This can be done in a number of ways – working with schools and also with sports enthusiasts, where an interest in, say, motorsport and rallying could lead to a career within the automotive industry.
I said at the outset that we need to make manufacturing, including automotives, work for us in the future as it has done in the past. I am pleased that the Welsh Assembly Government sees a place for those industries. Last year, 220 offers of Regional Selective Assistance or Assembly Investment Grant were made to manufacturing projects, safeguarding over 2,700 jobs and helping to create over 4,000 jobs. This is a good record that I want to see repeated.
Wales has an incredible history of successful manufacturing – utilising a skilled and stable workforce to produce items that the rest of the world want to buy. The automotive industry links our proud past with a future that, with the right support and the right motivation, can be equally bright.