Wales risks economic stagnation unless it quickly learns to use both hands — optimizing current strengths while building future industries, according to Frank Holmes, partner at Gambit Corporate Finance and chair of the Cardiff Capital Region investment board. In a strongly worded opinion piece, Holmes argues that the nation's economic policy is currently too one-handed, relying solely on existing industrial capabilities without adequately investing in the intellectual-property-led sectors that will define future growth.
The Need for Ambidexterity
Holmes describes capital as a restless, pragmatic force that flows toward environments where long-term risk is viable. A nation's standard of living, he contends, is entirely bound to its competitiveness — its ability to unlock domestic potential and attract global capital. To secure a prosperous future, Wales must learn to think and act as an ambidextrous nation, mastering two distinct capabilities simultaneously: one hand to optimise, modernise and defend industrial strengths; the other to boldly explore, fund and create high-value, IP-led industries.
This shift is not academic preference but urgent structural necessity. Modern economic growth is increasingly defined by a global transition from physical capital to intangible assets — patents, algorithms, software and brand equity. These operate under different economic rules where capital alone cannot solve the problem, especially when early-stage SMEs remain highly vulnerable.
SMEs and Intangible Assets
Globally, SMEs represent the bedrock of economic activity yet are significantly less productive than large firms. The mortality rate is brutal: approximately 20% close within their first year, and more than 55% fail to survive beyond five years. Holmes argues that helping these companies scale requires dedicated infrastructure that makes intangible assets bankable for the first time, introducing market-making instruments that remove the baseline risk preventing commercial lenders from financing pure ideas. Simultaneously, early-stage companies must be connected with venture capital accelerators providing investor-ready bootcamps, sector experts and seasoned mentors.
Wales possesses world-class universities and regional depth, but potential is currently outweighed by archaic spin-out commercialisation rules, startups lacking venture-grade ambition, a lack of competitive funding, and a lack of realistic understanding of what global scale truly requires.
Integrating Startups with Industrial Base
An ambidextrous nation does not allow its startup ecosystem to exist in isolation from its industrial base. Inward investment must be strategically anchored within existing regional sectors of strength: advanced manufacturing (especially the world-class compound semiconductor cluster), creative industries, life sciences and fintech. Highly competitive industrial clusters rely on deep collaborative partnerships where large market integrators raise operational standards of local SME suppliers by transferring knowledge, coordinating long-term demand planning and building management capabilities. This creates a resilient win-win fabric where the steady scale of global anchors supports the agile innovation of local SMEs, preventing dangerous customer concentration that cripples many firms before they can expand.
To accelerate this integration, the state must step forward as an active market maker — co-financing collective branding programmes to position regional SME clusters globally, and leveraging strategic public procurement as a primary growth driver. Rather than passive subsidies, the public sector can use its purchasing power to offer commercial contracts that establish critical first-customer relationships, transforming pre-revenue SMEs into mature, venture-backed entities.
Liveability as Economic Asset
Since high-value, IP-led economies rely heavily on geographic clustering, they are uniquely fragile and dependent on human capital. Holmes treats community liveability as a core strategic asset. High-performing schools, affordable modern housing, reliable public transport and excellent healthcare are not secondary luxuries but primary determinants of whether talent chooses to relocate and remain. He points to Ireland: despite enviable economic success, an acute shortage of affordable housing in Dublin is driving talent overseas.
Economic data consistently reveals that robust growth fosters trust in government and shared prosperity boosts social cohesion. When liveability factors underperform, the consequences are stark: underperforming schools, crumbling public services and communities in managed decline. To prevent brain drain, the institutional framework must be firmly embedded in statute, ensuring durable, stable and legally grounded environments that make long-term capital commitment rational across unpredictable political cycles.
Infrastructure and Energy
Exploiting modern technologies and productivity multipliers — artificial intelligence, advanced robotics, automated manufacturing — requires resilient digital and energy infrastructure. High-value technology clusters cannot operate without constant, affordable energy to power data centres, automated supply chains and high-speed connectivity. Holmes notes Wales possesses the second highest tidal range in the world, capable of generating multi-gigawatts of clean, predictable energy while delivering unprecedented sovereign wealth. Upgrading the physical energy grid to power the digital, IP-led economy is the ultimate act of national ambidexterity, requiring rigorous execution to remove bureaucratic barriers and guarantee resilience against market headwinds.
The lesson across economic history is clear: competitiveness, innovation and long-term survival are not passive occurrences. They result from deliberate, structurally sound choices. Ecosystems that thrive bridge the productivity gap between large and small enterprises, construct lean validation vehicles to capture emerging opportunities, and back every strategic decision with uncompromising commitment to timely, on-budget delivery.
Holmes concludes: "Economic growth is not everything for everyone, but the evidence indicates it is very close to being so. Historically, it has created remarkable progress and elevated living standards across the globe. Our current societal challenges indicate that we do not have too much economic growth, but that we have had far too little." By executing an ambidextrous strategy with absolute operational discipline, Wales can secure its prosperity, protect its communities and command its economic future.
