Wales a UK leader when it comes to investment

EARLY half of Welsh firms fail to undertake business cases for their most strategic investments which could lessen productivity improvement outcomes, new research from the Enterprise Research Centre shows.

- SION BARRY

Commissioned by Economic Intelligence Wales, the Productive Investment Decisions in Welsh Firms report does show that Welsh businesses are investing more consistently and more heavily in people, skills, branding and digital capabilities than firms elsewhere in the UK.

Some 67% of Welsh firms planned their most strategically significant investments in under a year, while 88% completed their planning within three years.

As with the rest of the UK, a large proportion did not use formal methods for investment planning, with the report showing as many as 47% did not have a business investment plan (for 2024) and 49% did not develop a business case for their most strategic investment while the majority of firms in the rest of the UK do.

Moreover, just over a third (36%) did not evaluate the proposed investment, and 25% did not monitor its performance after completion.

The lack of formalised strategies did not stop Welsh firms from making significant investments, with report adding this “could potentially reduce the productivity benefits of those investments”.

The report says the informality of investment planning should be the focus for policy intervention with a structure of support to help firms evaluate their investment priorities to “better deliver productivity gains and monitor investments”.

Wales is similar to the rest of the UK in terms of the average number of people involved in business investment decisions as well as the proportion of investment decision-makers who are women (41%) and from ethnic minority groups (7%).