Embedding Inward Investment through Workforce Development: Experiences in Wales

Abstract

The author examines the role of workforce development—in the form of skills upgrading and training—in integrating and embedding foreign direct investment (FDI) in the economy of Wales. He finds that by far the most important deciding factor in choosing Wales as an investment location is the availability of the government grants and subsidies that facilitate the initial location process. If this assistance were not available then the majority of FDI projects would not be attracted to Wales. The perception during the location decisionmaking process by potential FDI plants of the availability and quality of skilled labour in Wales is good compared with that of other potential regions. However, upon locating it appears that there is a significant shortfall between this perception and the actual quality of skilled labour available. Although the large majority of FDI plants utilise ‘aftercare’ training and skills-development initiatives facilitated by regional institutions and agencies the programmes in place in Wales are not always of the standard required by inward investors. The author finds that training budgets are significantly higher among FDI companies in Wales than comparably sized businesses in the United Kingdom as a whole, indicating that their contribution to regional workforce development has been underemphasised. It is concluded that, despite some recent restructuring, inward investors in Wales have attempted to act as ‘local’ agents, exerting an influence on and having an interest in the socioeconomics of their residing localities, suggesting an increasing degree of embeddedness.