The Welsh Government has set out a new economic target of Wales having 500 high-growth firms driving productivity and creating new jobs over the next decade, as well as two FTSE 100 companies.
Speaking at Plaid Cymru's conference in Llandudno today, Cabinet Minister for Enterprise, Connectivity and Energy Adam Price will confirm a new programme, Sbardun, to support Welsh firms with the ambition to expand and compete globally.
Productivity and FTSE 100 ambitions
Mr Price has already set a target of halving Wales' workplace productivity gap to half of the UK average. Latest figures from the ONS show that output per head in Wales is around 85% of the UK level.
The minister said that creating a pool of 500 high-growth firms will create the conditions for a second Welsh-headquartered firm to feature in the FTSE 100 index of the biggest companies listed on the London Stock Exchange by market capitalisation.
The only Welsh firm currently in the index is car insurance to loans group Admiral, with a market capitalisation of just over £11bn. The second-biggest Welsh-headquartered firm is Flintshire-based price comparison firm Moneysupermarket. While a FTSE 250 firm, its current market capitalisation is around £879m, which is more than £3bn below the level required for admission to the FTSE 100.
Sbardun programme details
There is no guarantee that Admiral will still be in the index in a decade. But, assuming it remains, a larger number of Welsh firms listing on the main London Stock Exchange would first be needed to improve the chances of another firm joining them.
Flintshire housebuilder Redrow was a FTSE 250 firm before being acquired by Barratt in 2024. Barratt Redrow is a FTSE 100 firm.
The small number of Welsh firms that are London-listed are mainly on the junior Alternative Investment Market, although the biggest by market capitalisation is technology firm IQE, which is seeking to join the main exchange.
Not all scaling firms in Wales, even if backed by private equity, will see a listing on the London Stock Exchange as the best route to achieve a return on investment.
Plaid was asked what definition it is ascribing to a high-growth firm and how many businesses currently meet that criterion. Sbardun will start with an initial cohort of 20 firms next April for a two-year programme period.
The programme will transfer to the new arm's-length national development agency when it becomes operational. The test will be whether there is a latent Wales-based, German-style Mittelstand of SMEs and mid-sized firms that can scale. Sbardun will fail if it adopts a traditional “clipboard” approach to business support. It will have to draw on external expertise that can add real value to supported firms.
Minister's vision and new equity scheme
Mr Price is expected to say at the Plaid conference: “We should want more Welsh firms to succeed, to grow and to compete on the world stage.
“Scale matters. We should want more Welsh firms to succeed, to grow and to compete on the world stage. But scale is a means, not an end. The end is good jobs everywhere.
“Because success is not measured simply by the number of companies that reach the summit. It is measured by whether people in every part of Wales can build a good life through good work.
“Our ambition is an economy deep enough, broad enough and rooted enough to create opportunity for all, generation after generation.
“Across Wales, there are thousands of firms capable of helping us build that future.”
Sbardun, which means a spur or accelerator, will be open for applications this autumn for its initial intake of 20 firms. There are currently no details on its budget allocation.
On Sbardun, Mr Price added: “From April, our first 20 Welsh firms with the ambition and potential to become medium-sized companies will enter an intensive two-year programme Development Bank of Wales investment. An entrepreneur who has made the journey before. A peer group of nineteen others making it alongside them. And one joined-up plan for everything holding that company back.
“Twenty is a start. We will learn what works. And what works for twenty, the new agency will take to scale. Because the purpose of Sbardun is not to back a handful of firms. It is to change the trajectory of the Welsh economy.
“A target is a promise with a number on it. So here are ours. Within ten years, five hundred high-growth firms. That gets us up to the same level of firm density by population as the UK. If we do that, we will create the conditions for an additional FTSE 100 company here in Wales.
“These are not separate ambitions. They are one climb. A summit needs a mountain beneath it.”
A new £10m pilot scheme has also been launched by the Development Bank of Wales to help high-growth firms secure larger equity investment rounds and scale from a Welsh base.
The Wales Equity Co-investment Scheme will invest alongside qualifying institutional investors, providing matched equity investment of between £500,000 and £2m in funding rounds of up to £10m.
The scheme has been designed to unlock more third-party capital for Welsh SMEs with strong commercial growth potential, with a particular focus on businesses commercialising technology and looking to scale.
