Wales, one of the national regions of the UK, built its reputation as a destination for foreign investment upon an impressive influx of big-name manufacturers during the 1970s and 1980s.
However, over the past decade, this compact but ambitious nation has been proving itself to be fertile territory for international service businesses, including many high-end operations.
Respected names from the worlds of finance, software and IT, insurance, shared services and government service have been making their homes in its cities and towns. And a high proportion have reinvested to expand in Wales, having achieved high levels of initial success from their new base.
A favourable location, a strong pool of highly skilled staff, business-friendly universities and colleges, a highly competitive cost base, advanced telecommunications infrastructure and a supportive Assembly Government have all combined to attract and retain these operations since the mid-1990s.
One of the first and highest profile arrivals was Dutch-owned export credit insurer Atradius, whose iconic marble UK headquarters building has dominated the skyline on Cardiff’s waterfront since 1995. Its 500 skilled staff contribute to an international enterprise that commands a 24% share of the world market for these services.
Access to quality staff and affordable accommodation have proved the key factors in attracting many of these business and consumer service firms over the years. The availability of required skills has been aided by a strong network of universities and colleges across Wales, as many employers testify.
International insurer Legal & General, which employs more than 2000 people in the Welsh capital Cardiff, collaborated with Cardiff University to create a specialist academy to train the highly skilled medical under-writers it needed for its business.
Many other international names from the insurance sector have grown rapidly in Wales. These include Lloyds TSB customer service centre at Newport, and Admiral plc, which set up in the early 1990s with 57 staff and a zero customer base but today has more than a million customers, 2000 staff and an annual turnover in excess of £400m.
Quality staff, easy access for customers and high grade but cost-effective accommodation were the factors which attracted Irish outsourced contact centre provider Conduit to Cardiff and Swansea between 2000 and 2003, where it now employs more than 1000 people, serving multiple big-name clients.
International software development and ICT support enterprises have also found Wales to be an environment conducive to growth. The sector now employs 30,000 people, generating £3.2bn a year, or 5.5% of the nation’s gross value added.
Global IT services giant LogicaCMG was so happy with the performance of its 350-worker outsourcing centre of excellence at Bridgend, south Wales, that it invested in a far larger “central sourcing hub for the UK” nearby.
Recent arrivals from this sector include global software development consultancy Valtech whose chief executive Jonathan Poole says: “We chose Wales because it is a mature business environment that can provide a skilled workforce with software development expertise.”
French-owned IT consultancy Capgemini has discovered major opportunities to sell its IT expertise to large public sector and steel industry clients and has established a thriving base in Swansea, a city currently undergoing a major regeneration.
The availability of quality staff, strong support infrastructure and an excellent quality of life has also persuaded the UK government to relocate many of its centralised public services to Wales from the south-east of England.
These include the Home Office shared service centre for HM Prisons and the Office of National Statistics, which between them are bringing more than 1000 jobs to modern offices in Newport, another city investing in large-scale regeneration.
Growth in service sector investment in Wales has not been confined to the south. At Ewloe in north-east Wales, Moneysupermarket.com has grown since its launch in 1999 to become Europe’s biggest financial services comparison website. It now employs 600 people and had a turnover last year of £104.5m.
In north-west Wales, Secure Trading has located its European operations centre near Bangor from where its web expertise enables thousands of internet and mail order businesses to process payments securely online.
Businesses that have come to Wales have discovered that, not only can they meet their short and medium-term needs for staff, accommodation and infrastructure, but they have plenty of scope for long-term growth.
Many high-value service companies have already discovered that Wales has the ingredients to enable them to operate very successfully. Added to that International Business Wales and the Assembly Government provides comprehensive support that helps companies take full advantage of this very healthy business environment.