Calls to recreate the Welsh Development Agency (WDA) are frequent in Welsh economic policy, driven by nostalgia for a time when Wales seemed more confident and internationally visible. The Plaid Cymru Government has proposed a new National Development Agency for Wales, recognizing the need for a credible business-facing institution. However, the real question is whether replicating the old WDA model suits Wales's economy in 2026.
A different economic challenge
In the 1980s, the WDA focused on replacing lost heavy industry and attracting jobs through inward investment. While successful, this model was transactional and dependent on mobile manufacturing capital, often failing to build deep supply chains or local innovation capacity. Today, Wales must create, finance, scale, and retain high-value Welsh firms in knowledge-driven sectors. A new agency must avoid becoming another layer in a crowded landscape that already includes the Development Bank of Wales, Business Wales, and various deals.
Focus on productivity and scaling
The agency's purpose should be to build next-generation Welsh-owned, innovation-led, and export-capable firms. The key test is productivity, as too many firms operate in low-margin sectors with insufficient investment in technology and management. The agency must help firms generate more value from work, investment, and ideas, rather than just announcing projects or supporting more businesses.
Addressing capital and commercial gaps
Wales generates ideas and technical capability but lacks the capital and investor networks to turn them into globally competitive businesses. This is evident in strengths like the South Wales semiconductor cluster, which has not produced enough spin-outs or scale-ups. Similarly, in renewable energy, Wales must build stronger firms to capture value, not just host infrastructure.
Governance and accountability
Existing institutions like the Development Bank of Wales and Business Wales are partly responsible for growth but lack accountability for outcomes. A new agency must be arm's length from political churn, with a clear mission, measurable objectives, long-term funding, and commercial expertise. The goal is not to recreate the past but to help Welsh firms grow, innovate, and export.
The ultimate test is whether the agency can create Welsh firms that scale, raise investment, improve productivity, and retain headquarters in Wales. If not, it risks being another rebadge of business support, mistaking reorganisation for real change.
