Wales emerges as UK leader in high-value intangible investment, major study finds
Wales emerges as UK leader in high-value intangible investment, major study finds
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Wales is outperforming the rest of the UK in high-value intangible investment as businesses increasingly prioritise skills, digital capability and organisational development, according to new research published by the Enterprise Research Centre (ERC).
The study, Productive Investment Decisions in Welsh Firms, was commissioned by Economic Intelligence Wales (EIW) and provides one of the most detailed examinations to date of how Welsh firms are shifting their investment strategies.
The findings indicate that businesses in Wales are funnelling resources more consistently, and more significantly, into people, training, branding and software than their counterparts elsewhere in the UK.
According to the report, 87% of Welsh firms invested in staff training or education between 2019 and 2024, far exceeding the UK average of 72%.
Training is now the biggest investment category in Wales, rising to 93% for strategically significant decisions.
Welsh businesses also lead in several other intangible areas, including branding (51%), organisational structure (41%) and software or databases (63%).
Economists have increasingly linked intangible investment covering skills, digital systems, organisational improvements and brand strength to long-term productivity growth.
The ERC’s findings place Wales ahead of UK benchmarks, suggesting the country is building a skills-driven economy centred on innovation and continuous learning.
The publication follows a June briefing jointly hosted by the Federation of Small Businesses, the Development Bank of Wales and Economic Intelligence Wales.
That event focused on how closing skills gaps could unlock productivity gains and accelerate growth across the Welsh economy.
The study found that Welsh businesses expect quick and reliable paybacks. 69% anticipate returns within five years, while 94% said they were ‘somewhat’ or ‘very certain’ their investments would bear fruit, levels of confidence that are typically attractive to potential investors.
Economic Intelligence Wales is a collaboration between the Development Bank of Wales, Cardiff Business School, Bangor Business School, the Enterprise Research Centre and the Office for National Statistics.
Its mandate is to provide independent data, analysis and insight to support economic development.
Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans, said: “By investing in skills and training at levels above the UK average, Welsh businesses are building a workforce that is adaptable, innovative and ready for the future.
“This commitment to upskilling and emerging technologies is the foundation of a stronger, more productive economy, and it’s encouraging to see Welsh firms taking such a forward-thinking approach.”
Professor Stephen Roper, report author and Director of the Enterprise Research Centre, said: “Wales stands out across the UK for its strong emphasis on investment in skills, digital capability, branding and organisational development.
“This is significant because these intangible assets are increasingly linked to productivity growth, and the fact that Welsh firms are investing more heavily in them than the UK average is an extremely positive sign for the future competitiveness of the Welsh economy.
“This confidence, coupled with the appetite for investment in skills and digital capability, suggests that Welsh firms are positioning themselves for future growth despite economic pressures.”
Rhian Elston, Wales Investment Director at the Development Bank of Wales, said: “This report shows that Welsh businesses are strongly committed to developing their people and strengthening their capabilities, which is ultimately what will improve productivity and strengthen Wales’ competitive position.
“Intangible investment is one of the most important drivers of long-term productivity, yet it can be one of the hardest areas for firms to finance.
“That’s where our funding solutions can really help by lowering barriers to investment. We’re here to provide the capital that Welsh businesses need to take advantage of new opportunities and capitalise on emerging sectors including the recently announced AI growth zones as this is what will drive innovation and long-term growth.”
Professor of Economics at Cardiff Business School and Academic Lead for the Wales Productivity Forum, Melanie Jones, said: “This research provides important new evidence on Welsh firm’s investment in training, organisational capability and digital improvement.
“This type of investment is likely to support long-term productivity improvement which is essential to improving future living standards in Wales.”
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