Any new agency must focus relentlessly on scaling firms, strengthening supply chains and retaining economic value in Wales.
The former WDA.
Few ideas in Welsh economic policy return as regularly, or with as much emotional force, as calls to recreate the Welsh Development Agency (WDA).
This is not surprising as for many people, the WDA still represents a period when Wales appeared more confident about its economic future, more visible internationally and more willing to go out into the world and sell itself. It had a recognisable brand, gave investors a single front door and, at its best, projected a sense of economic ambition that has often felt absent since devolution.
It is easy, therefore, to understand why the Plaid Cymru Government has placed the creation of a new National Development Agency for Wales at the centre of its economic offer. The proposal recognises something many businesses have quietly argued for years, which is that Wales lacks a clear, authoritative, business-facing institution with the commercial credibility and technical expertise to align ambition with delivery.
But the real question is not whether Wales needs a stronger economic development capacity, as it clearly does. The question is what kind of institution Wales now needs and whether recreating the logic of the old WDA is the right answer for the economy Wales faces in 2026.
That matters because the challenge facing Wales today is very different from the one it faced in the 1980s. Then, the priority was to replace lost heavy industry and attract jobs at scale, and the WDA played an important role in doing that, particularly through inward investment.
However, that model was also transactional and heavily dependent on mobile manufacturing capital, and whilst jobs were created, this did not always lead to deep Welsh supply chains, locally rooted ownership or long-term innovation capacity. By the time the WDA was absorbed into the Welsh Government in 2006, there were serious concerns about duplication, accountability and insufficient support for indigenous Welsh firms.
Today’s challenge is different as Wales no longer simply needs to attract jobs from elsewhere but must create, finance, scale, and retain more high-value Welsh firms in sectors where knowledge, intellectual property, technology, and creativity increasingly determine prosperity. That is why the design of any new agency matters far more than the name above the door.
If a new development agency tries to become everything at once – inward investment agency, business support body, regional development body and finance provider – it risks becoming another layer in an already crowded landscape. Wales already has the Development Bank of Wales, Business Wales, city and growth deals, local authorities, freeports and multiple sector initiatives, and the worst outcome would be to create another institution that adds complexity rather than cutting through it.
In my view, the purpose of a modern Welsh economic agency should be much clearer and much sharper. In other words, its role should not be to recreate the WDA but to build the next generation of Welsh-owned, innovation-led and export-capable firms. Above all, the test must be productivity, and for all the debate about agencies, strategies and structures, too many firms operate in low-margin sectors, too few invest sufficiently in technology and innovation, management capability remains uneven, and export intensity is too weak across much of the economy.
A new agency will only matter if it improves that underlying performance, and its purpose should not simply be to announce projects or support more businesses, but to help Welsh firms generate more value from each hour worked, each pound invested, and each idea generated.
For too long, Welsh economic policy has confused the reorganisation of business support with economic progress, and whilst we have had strategies, reviews and initiatives, we still lack a disciplined system for turning ideas into investable companies and investable companies into scaling Welsh firms.
Whilst venture capital investment remains heavily concentrated around Oxford, Cambridge and London, we all know that Wales can generate ideas, research and technical capability but, in the past, has often lacked the capital, commercial expertise and investor networks needed to turn those opportunities into globally competitive businesses.
This is particularly important in sectors where Wales already has genuine strengths, such as the South Wales semiconductor cluster, which is the obvious example. It is internationally significant and frequently described as one of Wales’s most important technology assets. Yet despite decades of public investment, it has not generated enough Welsh-owned spin-outs, supplier firms or venture-backed scale-ups and whilst this is not a reason to abandon the cluster, it should be a real incentive to redesign the support system around it to consistently create firms.
The same challenge applies to renewable energy, and Wales rightly wants to capture more value from its natural resources, but unless we build stronger Welsh firms around those opportunities, there is a risk that Wales simply hosts infrastructure while other places capture the intellectual property, ownership returns and higher-value supply-chain opportunities.
Any new agency must therefore focus relentlessly on scaling firms, strengthening supply chains and retaining economic value in Wales. This also raises difficult questions about existing institutions such as the Development Bank of Wales and Business Wales, which are partly responsible for growth but seemingly not accountable for outcomes.
That is why governance matters, and if a new national development agency is created, it must be genuinely arm’s length from day-to-day political churn, with a clear mission, measurable objectives, long-term funding and the freedom to recruit commercial expertise. In other words, the goal should not be to recreate the past but to build an organisation capable of helping Welsh firms grow, innovate and export
Ultimately, the test is simple: if a new agency can help create more Welsh firms that grow to a meaningful scale, raise serious investment, improve productivity, and retain their headquarters in Wales, it could become one of the most important economic institutions created since devolution.
But if it merely becomes a rehash of what we already have, then Wales will once again have done what it has too often done before, which is to rebadge business support, rearrange the deckchairs of economic development, and mistake reorganisation for real and lasting change.
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