These are the slides presented at the Economic Forum on 7 December 2022.

1. Cardiff Economic Forum
7 December 2022
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2. Introduction
Sonia Carrera
Deputy Director
Office for National Statistics
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3. Agenda
09.30am – 10.00am Registration and tea and coffee
10.00am – 10.05am Introduction – Sonia Carrera, Deputy Director, Office for National Statistics
10.05am – 10.10am Welcome - Stephanie Howarth, Chief Statistician, Welsh Government
10.10am – 10.25am State of the UK Economy – Richard Heys, Deputy Chief Economist, Office for National Statistics
10.25am – 10.40am ONS plans for subnational statistics – Andrea Lacey, Head of Subnational Statistics
Development, Office for National Statistics and Heledd Rees, Office for National Statistics
10.40am – 10.55am Q&A
10.55am – 11.10am Break/refreshments
11.10am – 11.25am How has health and labour force participation in Wales been impacted by the pandemic? –
Brendan Collins, Head of Health Economics, Welsh Government
11.25am –11.40am Different inward investment models in the local economy: Some insights from the Compound
Semiconductor sector – Max Munday, Cardiff University
11.40am – 11.55am Q&A
11.55am – 12.00am Closing remarks, Sonia Carrera, Deputy Director, Office for National Statistics
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4. Welcome
Stephanie Howarth
Chief Statistician
Welsh Government

5. State of the UK
Economy
Richard Heys
Deputy Chief Economist
Welsh Government
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6. The long-term productivity outlook is challenging
Source: ONS Source: ONS
80
85
90
95
100
105
110
115
120
125
130
2000 Q1 2003 Q3 2007 Q1 2010 Q3 2014 Q1 2017 Q3 2021 Q1
Labour productivity, 2000Q1 - 2022Q2
(2019=100)
output per hour pre-crisis trend post-crisis trend
-10
-8
-6
-4
-2
0
2
4
6
8
2019 Q1 2019 Q3 2020 Q1 2020 Q3 2021 Q1 2021 Q3 2022 Q1 2022 Q3
per
cent
Output per hour: between and within effects
Between industry re-allocation Within-industry productivity growth Total
Period of CJRS
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7. The broad economic outlook is challenging
75
80
85
90
95
100
105
110
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Index
2019
=
100
Independent forecasts, UK economy
OBR March 2020 forecast OBR March 2022 forecast
OBR November 2022 forecast BofE November 2022 forecast (ME)
BofE November 2022 forecast (3%)
Source: Office for Budget Responsibility, Bank of England Source: GfK Consumer Confidence
-60
-50
-40
-30
-20
-10
0
10
20
1985 1990 1995 2000 2005 2010 2015 2020
Overall
Index
Score
UK household confidence
GFK - Overall Index Score, consumer confidence
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8. Forward indicators of inflation continue to indicate
further pressure
85
90
95
100
105
110
115
120
2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1
Labour costs, 2015Q1-2022Q1
Unit labour costs Average Weekly Earnings (nominal)
-10
-5
0
5
10
15
20
25
Jan-10 Jul-11 Jan-13 Jul-14 Jan-16 Jul-17 Jan-19 Jul-20 Jan-22
per
cent
CPI and PPI, annual growth rates
input PPI CPI
Source: ONS Consumer Price Inflation, Producer Price Inflation
Source: ONS – UK Flash Productivity, Average weekly Earnings
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9. High inflation continues to be a challenge for
the UK and global economies
Source: ONS Source: ONS, Global Inflation
-2
0
2
4
6
8
10
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Per
cent
G7 CPI (UK CPIH)
Max/Min Median UK
-2
0
2
4
6
8
10
12
Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22
Per
cent
CPI Inflation
Energy Food Other CPI
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10. Macroeconomic policy is tightening in response
Source: Bank of England Source: HM Treasury – Autumn Statement
0
1
2
3
4
5
6
Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25
Per
cent
UK base Interest rates
Bank Rate Market Expectations Aug-22
Market Expectations Nov-22
-£10
£0
£10
£20
£30
£40
£50
£60
2022-23* 2023-24* 2024-25 2025-26 2026-27 2027-28
Billions
Autumn Statement Spending Plans
Tax Spending
*Not including EPG
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11. The UK slowdown appears consumption-led, driven
by the inflationary impact on real pay
Source: ONS – Retail Sales
75
80
85
90
95
100
105
110
115
120
Oct-19 Feb-20 Jun-20 Oct-20 Feb-21 Jun-21 Oct-21 Feb-22 Jun-22 Oct-22
Index
2019=100
UK Retail Sales
Value Volume
95
100
105
110
115
120
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
Jan
19
=
100
Total UK Weekly Earnings
Real Pay Nominal Pay
Source: ONS – Average Weekly earnings
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12. Real incomes are forecast to fall, impacting
business confidence
Source: Office for Budget Responsibility
-5
-3
-1
1
3
5
2000-01 2004-05 2008-09 2012-13 2016-17 2020-21 2024-25
Per
cent
UK real household disposable income
-18 -16 -14 -12 -10 -8 -6 -4 -2 0
all
Services
Construction
production
per cent
Net change, reported and expected turnover
increases
Oct 1st - Oct 31st Dec 1st - Dec 31st
Source: ONS – BICS wave 69, ONS Calculations
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13. Conclusions
• Inflation is forecast to peak this quarter and then fall into the new
year
• Interest rates have risen around the world in response to rising
inflation
• The UK is expected to be in recession for just over a year from
2022 Q3
• Productivity continues to act as a drag on the UK’s long-term
growth prospects
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14. Office for National Statistics
ONS plans for
subnational statistics
Andrea Lacey
and Heledd Rees
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15. Contents
• Strategy and workplan
• Timely, granular subnational statistics and insight
• Improved dissemination
• ONS Devolved Liaison Offer
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16. Senior Subnational Data
Group
Strategy and workplan

17. GSS Subnational Data Strategy (December 21)
A framework to guide the GSS in producing and
disseminating more timely, granular and harmonised
subnational statistics, that meet user needs
Referenced in the Levelling Up White Paper as a key enabler in the Government’s ambition
to improve subnational data and improve transparency and accountability to the public

18. GSS Subnational Data Strategy ambitions
Produce more timely, granular and harmonised subnational statistics
Build capability and capacity for subnational statistics and analysis
Improve the dissemination of subnational statistics
Explore Subnational Statistics service

19. ONS Subnational Workplan
ONS committed to follow up the Strategy with a workplan
Published 16 May 2022
A cross-cutting overview of the wide range of new or improved subnational
outputs and initiatives, planned for the next 18 months, across the Office
A strong commitment for UK-wide coverage, where possible, enabled by
solid collaboration with the Devolved Administrations
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20. Timely, granular
subnational statistics
and insight
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21. Model-based early estimates of regional GVA
• Started publishing model-based
quarterly estimates of regional GVA
from October 2021 onwards
• Early indication of quarterly GDP,
published 5 months in advance
Source
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22. Productivity in towns and travel to work areas
• Experimental labour
productivity data for
TTWAs and towns made
available for the first time
in December 2021
• Complements existing
annual subregional
productivity release
Source
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23. Disaggregating annual subnational GVA to
lower levels of geography
• As part of the ONS strategy to provide more
granular data to our users
• Experimental statistics using granular
geographies as building blocks to derive GVA for
flexible/bespoke geographies
• To gain a better understanding of hyper-local
economy from both a business and household
perspective, this work provides new insights in
understanding regional disparities
Source
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24. Granular Local Statistics
LUSD
Research and Development Subnational Trade Public Sector Finances
• Best practice guidance for Government
departments on collating R&D
expenditure data
• Regional Public Funded R&D Expenditure
• Improved UK-wide regional estimates of
business R&D
• Published experimental data on Local
Businesses that carry out international
trade in services 2020
• Publish subnational TiS and TiG with
2021 data and timeseries
• Experimental article on inter-regional
trade
• Administrative data to supplement
Local Government and Public Corporations
data
• Analyse central and local government
expenditure reported via Transparency
Declarations
• Explore existing DLUHC and
Devolved Administrations LA level source
data to supplement HMT Country
Regional Analysis
More accurate measurement of the impact
of policy interventions to support the
R&D mission.
Transformation of how government
departments manage their R&D data
Producing more robust R&D statistics.
Better understanding and insight into
trade flows around the UK
Supporting development of regional
supply use tables in future.
Better understand the distribution of public
sector expenditure between local authorities
Enabling better understanding of
subregional differences and
supporting policy interventions to reduce
regional disparities.
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25. Housing data
ONS Housing Analysis team works closely with DLUHC, the DAs
and other government departments to continuously improve our
publications and data availability across the UK covering
• Dwelling stock
• Housing affordability
• Energy efficiency of housing
Our statistics inform national and local policy making on
housing issues, with a focus on developing measures that
cover a range of aspects on housing and deliver UK-wide
statistics to support understanding of housing across the UK.
In 2022 we published:
• Subnational dwelling stock by tenure – Improved data visuals
• Housing affordability – New data visualisations
• UK dwelling stock – Accessible spreadsheets
• Purchase affordability – New publication
• Energy efficiency of housing – Time series added,
• UK house building – Local authorities added
• Private rental affordability – Wales and Northern Ireland to be
added (Due to publish 19 December)
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26. Census Maps
• Census maps is an interactive tool lets you explore Census 2021 data across England and Wales at a local neighbourhood
level. Output Areas is the smallest statistical geography that data are released for, with each area typically home to
between 100 and 625 usual residents.
• Census 2021 data have so far been released for variables on the topics of demography and migration - more topics will be
added as they become available.
• Supports Levelling Up by supporting local policy and decision making around planning of local services.
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27. Improved
Dissemination
10 January 2023
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28. Explore Subnational Statistics
• Announced in GSS subnational data strategy
• One-stop-shop for subnational data and statistics
• Standardised geographies and user-defined areas
• Prototyped as Subnational indicators explorer – second
iteration published in May 2022, another update 1st
December adding more indicators
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29. LUDA/X-Govt platform
• Cross Govt levelling up data collaboration platform –
develop suite of dashboards to support decision
making across Govt.​
• Space for shared analysis and output production​.
• Stores all levelling up data, including ESS data.​​
• Will allow Govt colleagues to respond rapidly to
queries using available data.
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30. Devolved Liaison
Officer for Wales
10 January 2023
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31. Vision
An analytical advisory service for local leaders, with dedicated analysts
based across the UK, ensuring they have access to data, statistics, and
analysis to support decision making
Aims
In development – for discussion
Support users to
navigate
subnational data
and analysis
(both readily
available and in
development)
Work with
regional partners
to influence ONS
plans and
priorities
Make links
between national
and ONS data
with local data,
adding analysis
for greater
insight
Join up
geographically
disparate areas
with similar
challenges

32. Service offer
Analytical
Providing data and statistical advice as well as collecting user priorities
to inform ONS analysis plans
Data
Supporting users to navigate the data landscape, access data platforms
and connecting to expert advice at ONS for specific data sets
Network
Hosting regular events based on analytical themes, sharing knowledge
and presence within existing networks and using our political/analytical
knowledge to facilitate policy making
Strategic
Using our
unique position
within central
government to
understand,
identify, and
align priorities
for both local
and central
decision
makers,
alongside
capturing user
needs
ons.local@ons.gov.uk
Building
Capability
Support,
inform, and
advise local
colleagues on
a variety of
opportunities
across the
three pillars,
with the aim of
continuous
development of
the offer

33. Phased implementation
• Support to understand and interpret datasets
• Individual work plans agreed with regions
• Developing collaborative analytical projects of
benefit to multiple areas and regions
• Support to access data platforms and existing data
sources
• Hosting forums to discuss cross-cutting themes
• Feedback to inform wider ONS prioritisation
• Dedicated ONS Local space on website
• Webinars
• Events
• Newsletter
• Evaluating stakeholder needs
Stage one
Stage two
Stage three
In development – for discussion

34. Phasing of offer
Phase 1
• Early activity will be establishing
themselves as the Devolved
Liaison Officer (DLO) within
Welsh Government, Scottish
Government or NISRA, and
within ONS
Phase 2
• Next activity will be further
relationship building with related
and impactful organisations e.g.
Data Cymru in Wales, NRS in
Scotland
Phase 3
• Operational service within
whatever remit is decided in
Phase 1 and 2
September 2022 to March 2023 March 2023 onwards
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35. Upcoming highlights
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36. Project Granularity Estimated
Publication
Quality of work in the UK:
Job Quality Indicator analysis
bi- and multi-variate breakdowns by
devolved administration, region, city
region and local authority
Dec 2022
Night-time Economy National estimates and MSOA in places Jan 2023
Understanding Towns in England &
Wales: Towns and Out of Towns
Towns in England and Wales Jan 2023
Research & Development Regional estimates Feb 2023
Understanding Towns in England &
Wales: Geographic Mobility
Towns in England and Wales Mar 2023
Gross Disposable Household Income
(GDHI)
Components of GDHI at LSOA level End of 2023
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37. How has health and labour force
participation been impacted by the
pandemic?
Dr Brendan Collins
Head of Health Economics, Advanced Analytics and Policy Modelling
Welsh Government Science Evidence Advice

38. Thank you
• Thank you to Alexandra Fitzpatrick, Luned Jones, and their
teams for data on labour force in Wales
• Thank you to Lois Griffiths and her colleagues at PHW for
sharing and summarising their research
• Thank you to CEDAR and Adferiad service users for long covid
data

39. In this presentation
• The five harms of the pandemic
• People leaving the workforce due to long term sick
• Looking in more detail around long covid
• Possible policy responses

40. The five harms of the covid pandemic

41. Covid: a syndemic
• Risk factors – clinical,
behavioural, place
• Neomaterial, psychosocial,
cultural, power, theories of
inequalities
• Financial and health resilience -
house, garden, car, money in the
bank, stable relationship –
• ‘Shadow pandemics’ hidden

42. What is happening to make people leave
the workforce?
Human
capital
Productivity
Health

43. Are we seeing a crisis in terms of chronic
illness causing economic inactivity?

44. Current questions
1. How many people are leaving the labour force and how
much of this is due to ill health and how much is due to
other factors?
2. Is this a new trend since the pandemic or a longer term
trend?
3. Are these health issues likely to be directly or indirectly
due to covid infection, or lack of NHS capacity (e.g.
waiting lists for surgery)?
4. What is the policy response?

45. There is a dynamic relationship between
wealth and health

46. Health outcomes of the pandemic in
Wales
• Around 11,000 covid deaths since the pandemic – mortality rates in
most deprived are around twice those in least deprived
• Around 7,000 excess deaths
• Around 96,000 people with long covid (symptoms longer than 4 weeks)
• Increased risk of health problems (particularly CVD events) in time after
covid infection
• Diagnosis of long term conditions has fallen since the pandemic, with
the proportion of first diagnoses in hospital (rather than primary care)
increasing
• Elective waiting lists have increased since the pandemic (from 457k in
March 2020 to 692k in February 2022)

47. Being infected multiple times with SARS-COV-2
increases the risk of other health problems

48. Intersecting risk factors for covid
outcomes
Hospital porter Hospital cleaner Hospital receptionist

49. OBR change in activity in UK – long term
sick increasing

50. Long term sick is the biggest reason for
economic inactivity in Wales
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22
% Economic Inactivity by reason
Student Looking after family/home Temporary sick Long-term sick Discouraged Retired Other

51. Economic inactivity due to long term illness in
Wales since the pandemic is still not as high
as historical rates
20.0
25.0
30.0
35.0
40.0
45.0
50.0
All persons Males

52. From IFS analysis: most people who are long
term sick have been out of work for at least 5
years – might be because respondents only give
one main reason for inactivity in LFS

53. PHW research on employment since the
pandemic in Wales
• Research from Public Health Wales on employment and health since the
pandemic suggests people with health conditions are more likely to consider
becoming self employed.
• Older people are less likely to want to retrain or upskill. Older people with poorer
health are 4 times more likely to consider retirement than healthier counterparts.
• Working from home wasn’t always good for people with poor mental wellbeing or
health problems; often made them worse. People with poor mental wellbeing
wanted to spend less time working from home than people with better mental
wellbeing.
• People with poorer health were more likely to be in precarious work, and people
with lower mental wellbeing more likely to experience unemployment.
Seeking good work in the COVID-19 recovery by Griffiths et al. 2022
Exploring the Health Impacts and Inequalities of the New Way of Working by Griffiths et al 2022
Precarious employment and associations with health during COVID-19 by Gray et al. 2022
Characteristics of those most vulnerable to employment changes during the COVID-19 pandemic
by Gray et al 2020.

54. UK labour force
survey data
suggests increase
in ‘other’ health
problems – could
be partly long
covid, but biggest
increase was from
2019-20

55. Delving deeper into long covid in Wales
• The UK has the Office for National Statistics (ONS) Covid Infection Survey that
tested a random sample of households, and included questions about symptoms
including long covid.
• In the 4 weeks up to 4 June 2022, an estimated 96,000 people living in private
households in Wales had experienced self-reported long COVID symptoms of any
duration (3.0% of the population).
• The estimate for those people who first had (or suspected they had) COVID-19 at
least 12 weeks prior was 72,000 (2.3% of the population) and at least 12 months
previously was 41,000 (1.3% of the population).
• 22% of long covid suffers say it affected their daily activities ‘a lot’.
• Around 2,000 people have accessed specific long covid services in Wales
(‘Adferiad’ Welsh for recovery)

56. Long covid is distributed unevenly by age
with the highest rates in 35-69 year olds.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2 to 16 17 to 34 35 to 49 50 to 69 70+
Number
Age group
Estimated number of people with long covid in Wales by age group

57. Local data on long covid patients
• We have data for around 1,100 people accessing the long covid
recovery services in Wales.
• There may be some double counting of individuals in these
data.
• These are likely to represent the more severe end of the
spectrum for long covid so we cannot generalise too much.
• Collected EQ-5D-5L data – Euroqol 5 dimension, 5 level –
which is often used to calculate QALYs.

58. Health related quality of life in long covid
patients accessing services in Wales is much
lower than the general UK population
0.596
0.519
0.554
0.447
0.429
0.617
0.696
0.498
0.927 0.911
0.847
0.799
0.779
0.726 0.726
0.856
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
18 - 30 31 - 40 41 - 50 51 - 60 61 - 70 71 - 80 81 - 90 Grand Total
Average
EQ-5D
Index
Score
Age Groups
average long covid lowest popn norm
1 =Full health

59. Most significant factors in regression of
symptoms and characteristics of population
and EQ-5D index scores
• Strongest relationship with EQ-5D index scores (poorer health)
• Depression/anxiety
• Fatigue
• Chest pain
• Long term sick
• Disabled
• Smaller but still significant effects
• Shortness of breath, chest pain, loss of appetite, pins and needles, joint pain,
covid hospital admission, tinnitus, nausea, age. (Cough actually associated
with better health).

60. Even if long covid patients’ health was lower
than the general population before covid, they
have still likely lost some QALYs from long
covid
Duration of
health loss
Assumed health status before long covid
Same as general population
20% lower than general
population
QALYs lost
Value of
QALYs lost QALYs lost
Value of
QALYs lost
3 months 0.088 £6,193 0.046 £3,197
6 months 0.177 £12,385 0.091 £6,393
9 months 0.265 £18,578 0.137 £9,590
12 months 0.354 £24,770 0.183 £12,786

61. Summary
• People leaving the workforce due to long term sick is increasing
in the UK and in Wales
• We don’t know how much is due to increased risk of health
problems after covid, long covid, or waiting for NHS care
• Long covid does cause significant health deficits in a proportion
of the population

62. Possible policy responses -1
• Focus on employers and good, fair work – for instance social care real
living wage
• Impacts of Brexit, changes in fertility patterns on future population
• Consider impacts of cost of living crisis on health and work choices
• Focus on musculoskeletal conditions and mental health conditions
• NHS waiting lists
• Methods like distributional cost effectiveness analysis to balance value
for money and equity impacts
• Need to think about how the public sector promote health among staff.

63. Possible policy responses -2
• Need to promote healthy behaviours at stress points in people’s lives –
being made redundant, relationship breakdown, bereavement etc
• Social wage – early years education, free school meals, free
prescriptions, council tax benefit, etc
• Focus on foundational economy and sustainability
• Reduce economic and health inequalities – increase financial and health
literacy starting with school
• Policy interventions to improve health, promote physical activity, healthy
food systems

64. Thank you
• Brendan Collins
Brendan.collins001@gov.wales

65. Strength in Places Fund
Different inward investment models in the
local economy: Some insights from the
Compound Semiconductor Sector
Professor Max Munday, Professor Rob Huggins, Dr A Roberts, Dr W Cai.
Welsh Economy Research Unit, Cardiff Business School, Social Science Research
Park (SPARK)

66. High level outline
 A long history of debates on the transformative role or otherwise of
inward investment in the regional economy.
 Some of this has been ‘fought’ out in the context of historical
inward investment success in Wales.
 Wales and the CS cluster might be a valuable contemporary lens
through which to explore the regional transformative benefits or
otherwise of inward investment.
 Are there selected characteristics of the CS cluster firms which
differentiate them from other parts of the inward investment sector
in Wales?
 Might this group of inward investors might yield transformative
change for Wales?

67. Wales inward investment success 1984-2007
1,446 acquisition,
expansion, joint venture
and new projects
£13,566m of
investment
99,691 planned new
jobs
70,927 safeguarded
jobs
Some history: Wales had a period of strong success in attracting inward
investment…..
Sample
(Ownership /
Business Structure
Classification)
1977 1986 1997 2003
Plants
(N)
Emp. Mean
Emp
Plants
(N)
Emp. Mean
Emp
Plants
(N)
Emp. Mean
Emp
Plants
(N)
Emp. Mean
Emp
Domestic plants 2,561 223,685 87.3 2,169 136,721 63.0 1,693 124,756 73.7 1,339 99,042 74.0
E.U. 90 28,557 317.3 128 20,151 157.4 136 20,584 151.4 110 17,421 158.4
Non-E.U.Europe .. .. .. 15 1,525 101.7 20 2,112 105.6 15 1,935 129.0
North America 122 48,216 395.2 150 36,172 241.1 158 33,752 213.6 136 28,849 212.1
Asia .. .. .. 19 7,098 373.6 43 17,391 404.4 39 12,287 315.1
Foreign owned
plants
251 85,161 339.3 336 66,341 197.4 375 75,540 201.4 315 62,400 198.1
Foreign/ All (%) 8.9 27.6 13.4 32.7 18.1 37.7 18.4 37.7
All 2,812 308,846 109.8 2,505 203,062 81.1 2,072 200,323 96.7 1,713 165,484 96.6
Source: McNabb and Munday, 2017
Plants and Employment by Ownership and
Business Structure, Wales, Selected Years
But how successful has inward
investment been in transforming the
Welsh economy?

68. Inward investment into the Welsh
economy: rehearsing the debate?
Employment creation
Improvements to Welsh
productivity – the batting
average effect
Supply chain effects in Wales;
regional multiplier effects
Demonstration effects,
industrial relations, HRM
methods
New production methods
introduced
Trade effects through
increased exports
Advertising effects for the
region
Concerns on low levels of BERD
Concerns on low levels of
embeddedness and low levels of
linkages with local firms
Concerns of reported
performance
Production-only orientation
Limited decision making
autonomy and functional
diversity
Crowding out effects with
respect to indigenous enterprise
Long term stability and
transformational capacity.
Does inward investment by the CS
cluster have different
characteristics to much that has
gone before with beneficial local
economic impacts.

69. Moving towards knowledge-based inward investment?
The PAST! Inward investment policy based
on pragmatic attractions such as financial
incentives, ample land availability, and a
sound infrastructure with competitively
priced labour.
The NOW! The challenge for
economically disadvantaged
regional economies is to formulate
the conditions both for retaining
home-grown companies and for
encouraging inward investors to
choose their nation as a home for
knowledge-intensive industries.
Under the new environment, the
primary goal and means of inward
investment attraction is based more
on the creation of knowledge
spillovers, such as the transfer of new
skills, science, and management
techniques.
Policy?
Needs to reflect far more on whether assistance offered to inward
investors should be better connected to the expected level of
benefits. Policy actors need to look more at inward investment
motivations, the expected levels of earnings and productivity growth,
and the stage of the life cycle reached by industry products etc
Policy steered more towards inward investors who bring HQ-type
functions, and with the lack of higher order management and research
functions in Welsh manufacturing working to worsen problems of a low
skills equilibrium

70. Does the CS cluster in Wales measure
up?
What is produced?
Why is ‘it’ produced
in Wales?
How well is the
cluster embedded in
the local economy?
Research has tried to investigate how far
the CS cluster of firms might represent a
different model of inward investment.
Cardiff and Swansea
University
Compound Semiconductor
Centre
CSA Applications Catapult
Nexperia, Microchip,
Microlink, Rockley, IQE,
SPTS
Direct
activity
supported
in Wales
by
operations
Estimated
1,600 FTE
jobs
Estimated
£194m GVA
+ Indirect
supported by
wages
spending and
local Wales
purchases
Estimated
2,390 FTE
jobs
Estimated
£277m GVA

71. CS cluster how does it measure up?? Early doors but….
Figure 5 CScluster local economic effects checklist
Potential effects Nature of effects CS cluster in Wales?
General productivity
spillovers
Role of inward investment in technical
change and progress and domestic sector
productivity growth
Potentially strong in terms of involvement in cutting
edge technology and shown to be a highly productive
sector in Wales.
General competition effects Inward investment role in breaking down
monopolies in host economy, competition
effects.
CS cluster has no explicit competition within Wales
and markets are international. Limited displacement
of any domestic or regional capacity.
Trade effects Impacts on export and imports, more
general balance of payments effects.
Strong impact on regional export activity and offers
diversity of export locations away from EU.
Buyer-supplier and value
chain effects
Issues of embeddedness. Indirect
economic impacts on regional supply
chains. Demonstration effects to suppliers
in terms of operational techniques and
links to increased productivity.
Limited backward supply chain links currently into
Welsh economy but CSconnected seeking to expedite
this issue, particularly in terms of linkages between
the investors.
Employment effects Effects in terms of direct and indirect
employment creation, and the employment
contribution in different industries.
CS cluster supports jobs directly and indirectly in the
Welsh economy (c.2,400 jobs) through wage and
procurement effects. Also extensive activity in terms
of developing local skills supply side.
Industrial relations effects Inward investing firms promoting novel IR
practices, and extent to which
demonstration of new practices spill-over
to domestic firms and other institutions
CS cluster firms among industrial leaders in terms of
IRpractices.
HRM and operational
management practice
effects
Presence of different operational and HRM
practices in the inward investment sector,
and extent to which demonstration of
practices spills-over to the extant firms in
the economy
CS cluster firms strong in terms of application of
advanced manufacturing technology and robotics.
Research intensive cluster
allowing entrants to work from
initial product research through
to manufacture
Networked supply chain
featuring new materials
processing and research and
device production
Productive labour force , and
skills supply side continually
developing
IP protections for new products
and processes
Proximity to high quality
university research and
postgraduate expertise
Institutional support from
CSA Catapult, CISM and ICS
Institutional support from
Welsh Government, Cardiff
Capital Region
Pull factors for
inward
investment
HQ effects might be important

72. Conclusions – watch this space?
 How far growth in inward investment feeds through to new entrepreneurship in Wales in the form of spin-off
firms from the main cluster, and how far new business opportunities result from spin-offs from the higher
education sector.
 The role of CS inward investment in creating productivity spillovers in other Welsh industries, particularly
those with whom the cluster trades locally.
 The longer term effects of the inward investment on the supply and demand side for specialised labour in the
compound semiconductor space.
“The CS cluster case appears to stand out as an instance of a more disadvantaged regional economy starting on
the process of strengthening the conditions to support manufacturing investors to choose a location for
knowledge and technology reasons over and above more basic reasons of factor costs and market access.”
https://csconnected.com/media/utkj4qir/csconnected_inward-investment_cardiff-business-school-report.pdf

73. Closing remarks
Sonia Carrera
Deputy Director
Office for National Statistics
@ONSfocus #ONSEconForum

74. Dates for your diary
19 December 2022 – ONS Economic Forum
Presentations include
• State of the UK Economy
• Where Have the Workers Gone? Movements to Inactivity in the UK: 2019-2022
• Over 50s lifestyle study
• Job quality in the UK
Further details on the above event and any upcoming events will be published at
ons.gov.uk/economicevents
@ONSfocus #ONSEconForum

75. Thank you for attending the
Economic Forum
You can keep up to date on all upcoming events via
ons.gov.uk/economicevents
If you would like to ask a question or provide any feedback, please do so
via economic.engagement@ons.gov.uk