Globalisation and its impact on Wales (PDF; 668 KB)
Source: House of Commons Welsh Affairs Committee
From the Summary:

In the twenty-first century, the economy of Wales cannot be considered in isolation, but must be seen in the context of global opportunities and threats. Today, national economies are no longer independent entities operating separately, but are interdependent. Much of the evidence we took in the course of this inquiry was informed by the particular economic circumstances in Wales at the time. In 2007, witnesses reported rising house prices and an in-flow of migrant workers to Wales. Since that time, the challenges of globalisation have become even more starkly apparent in the light of the global economic downturn. As economies have become interlinked, so economic problems can spread more easily from one country to another.

Globalisation, however, is undoubtedly a phenomenon that is here to stay. Today, more than ever, it is important for Wales to maximise the economic return that can be derived from global trade. As companies cut costs to remain viable in a worsening economic climate, Wales will need to make the most of its local strengths and the skills of its workforce in order to remain a desirable location in which to do business. This Report puts forward the fundamental elements necessary for a successful global economic strategy. We believe that our conclusions and recommendations will prove particularly valuable in the current climate if they receive careful consideration by all parties, including central and local government and the Welsh Assembly Government.

In Wales, globalisation has often been viewed as a wholly negative phenomenon, endangering jobs and triggering the decline in the industries which have traditionally sustained the Welsh economy, such as coal mining and heavy manufacturing. It is certain that, for Wales, globalisation means change and a transition to new forms of economic activity. It is no longer feasible to build an economy based on the production of mass market commodities which can be carried out more cheaply elsewhere. Instead, Welsh companies must move up the value chain, making use of higher level and specialist skills to offer premium goods and services which cannot be sourced abroad. This process is challenging and governments in both London and Cardiff have a responsibility to ensure the Welsh population is as prepared as it can be for the demands of the global marketplace. In the longer term, the rise in global trade holds out the prospect of increased prosperity as the economy recovers and markets expand. For those countries able to negotiate the transition successfully, the result should ultimately be a rise in standards of living.

To make the most of globalisation, Wales must exploit its strong local identity and values. Our inquiry has convinced us that adaptation to globalisation should not involve adopting a ‘neutral’ brand identity. On the contrary, it is the power of localism that will provide a foundation from which to approach the world. Wales has many strengths on which it can build, including expertise in high technology sectors, food and drink, hospitality, tourism, broadcasting and the creative industries. Wales has already moved a long way from its industrial roots in coal mining and textiles. Today, small businesses make up the vast majority of the business stock. These are often at the forefront of innovation, but place great value on their local origins and character. This is a powerful combination of assets, which can be harnessed to the benefit of the Welsh economy. Small businesses may find the prospect of entering the global marketplace daunting, but with the right support and by joining forces and working collaboratively, the sector has the potential to add significantly to Wales’s prosperity.