For those of you who are leaving, I wish you a happy Christmas. For those of you who are staying to listen to the short debate, we will move to that debate, and I call on Mike Hedges.

Thank you, Presiding Officer. There is a community of interest throughout the Swansea bay city region. Swansea was the largest city in western Europe to be a recipient of objective 1 funding. I have no pride in that whatsoever. Throughout the region, we have Port Talbot with steel, Llanelli with tinplate, Pembrokeshire with energy, Carmarthenshire with agriculture and Swansea with major Government services such as the DVLA. The area has Swansea University and the University of Wales Trinity St David on several sites. So, why is it relatively poor? The cause, as with everywhere that is relatively poor, is too many people working irregular hours on the minimum wage. 

I welcome the Swansea bay city deal, and I congratulate the councils, the Welsh and Westminster Governments for their support for this deal. While helpful, this will not transform the economy. If the Swansea bay region is to have a successful, vibrant and thriving economy, we need to concentrate on key growth areas and support those industries with grants, incentives and other help. We can no longer hope that offering companies more than anywhere else to bring a branch factory will develop our economy, especially as most of these branch factories close down in a very short time.

Although everyone will have different ideas on which sectors to support, it’s my belief that we must concentrate on supporting and nurturing the life sciences, ICT, creative industries, advanced manufacturing and professional services. The evidence also tells us that businesses in the life sciences sector can grow very quickly in a global market, with the rewards for success being huge. This means that a small number of successful businesses in the life sciences industry have the power and potential to generate great economic value for the city region, creating well-paid jobs.

Professional and financial services are, however, sectors where Wales, particularly outside Cardiff, remains weak or very weak. We need to develop our professional services and use the flourishing university sector to generate employment in the area. In the 1970s and 1980s, Swansea University was at the forefront of finite element analysis, yet Wales generated very little, if any, benefit from it. Professional services in finance and engineering can generate high salaries and also produce clusters of related activity. We have a major and well-respected insurance company in the area, but we desperately need to attract and support more high-value and high-wage employment in the financial sector. 

One key industry that is not geographically constrained, and has the ability to generate huge wealth, is ICT. There is a tendency for ICT companies to cluster, not just in Cambridge and Silicon Valley, but around other university cities, and around places like Leamington Spa. With the quality of ICT graduates being produced in the Welsh universities, it has to be a severe disappointment that Wales has a lower proportion of its population working for ICT companies than the rest of the UK. Developing an economy is about developing and promoting high-value economic sectors. We will not develop a successful economy and high gross value added on low pay and seasonal work. We, therefore, need a strategy for each of these targeted growth sectors.

The Deputy Presiding Officer took the Chair.

I’d like to compare Swansea to its equivalent, Aarhus, which is the second-largest city in Denmark, and Mannheim, which is its twin city in Germany. The economic data for the two areas makes interesting but, as a Swansea bay resident, depressing reading. In Mannheim metropolitan region, its GVA is 147 per cent of the European average, but in Mannheim city, it’s 210 per cent, compared to that of the Swansea metropolitan area on 75 per cent and the Swansea local authority area on 79 per cent.

What does Mannheim do differently, and can Swansea learn from its twin city? The city of Mannheim has been referred to as the first smart city, where they have been successful in connecting each household within the city to a smart energy network; bus stops state when the next bus is arriving, and have signs indicating where traffic jams are. Furthermore, in both the city and region, you are able to reach everything simply via bus, tram or train.

Mannheim university is one of the leading research institutions within Germany, and plays a key role in its economy. The research institution of the university closely collaborates with a number of national and international partners. Some examples are the Mannheim Centre for European Social Research and the Mannheim Centre for European Economic Research. Mannheim Business School is Germany’s number one business school, offering world-class management education. An institution affiliated with the university is the Mannheim Center for Entrepreneurship and Innovation, which provides a founder and incubator platform for students, young entrepreneurs and investors. The metropolitan region is more and more becoming a draw for multimedia and high-tech services. The above helps explain why Mannheim was ranked eleventh in the top 15 of the most inventive cities worldwide.

The city is also home to major international corporations: ABB, IBM, Roche, Unilever. Also there are numerous emerging medium-sized companies, which have the capacity to grow. The creative industries are firmly established, with the famous Mannheimer Schule and the national theatre.

Mannheim also has a long-standing cultural tradition, and the Popakademie—Germany’s first university for pop music and music business—is internationally renowned. There is also the atelier of the fashion designer Dorothee Schumacher, and her creations are presented at international fashion weeks. With the aim of contributing to an environment where many more creative businesses can arise, mg: mannheimer gründungszentren supports business founders. The centre advises during the foundation process, provides office space, and helps start-up companies overcome the challenges they face.

I believe the role the university plays in supporting the development of start-up companies is crucial to the prosperity of the area, and also the idea of having key industrial sectors and supporting them, building on local expertise and areas where expertise has been developed over several years. Whist Swansea cannot replicate everything in Mannheim, building on the universities, especially the bay campus, to generate start-up companies via a centre for entrepreneurship and innovation would be a substantial step forward. Mannheim has made progress on energy and connectivity—two areas that Swansea bay city region can benefit from. Finally, building on the creative industries already in the region would help take the Swansea bay city region forward. And can I just remind people, yet again, that the computer games industry is bigger than the music industry and the film industry combined?

Aarhus is the second-largest city by population in Denmark, compared to Swansea, the second-largest city in Wales. Greater Aarhus is a major player in the global wind-energy market. It’s home to some of the world’s biggest manufacturers of wind turbines. Why? Because it was there first. Those countries and those areas, which were there at the beginning of industries, such as wind turbines, are the ones who get the most benefit from it, and it’s one of the reasons why I’m so keen on the Swansea bay tidal lagoon.

Aarhus University is a university founded in 1928 and is Denmark’s largest, with 44,500 students, which is approximately twice that of Swansea. But Swansea is also a research-led university, so the challenge is to grow the university, both in student numbers and in world ranking. Progress on both has been made in recent years, with the bay campus being built, but there's still an opportunity for growth in numbers and improving on its world ranking.

The largest research park in Aarhus is INCUBA science park, focused on IT and biomedical research—another two areas I mentioned at the very beginning and throughout this discussion. The organisation is owned partly by Aarhus University and partly by private investors, and aims to foster close relationships between public institutions and start-up companies. IT and biomedical research are two of the current growth areas around the world. Aarhus knows that. They're areas that the Swansea city region is looking to develop. The aim is to place the region at the forefront of life science innovation, and to be recognised as a destination of choice for global investment and enterprise in the field of life science and well-being. But we can grow our own as well.

Both Aarhus and Cambridge—with its Silicon Fen created in 1970, when a science park was formed by Trinity and other Cambridge colleges—show that a research park needs to be led by the university. And I'm very pleased with the work being done in north Wales at the moment, but I'd like it down here as well. There is the opportunity to produce a research park in the Swansea bay city region, but it has to have university support as well as local and Welsh Government help.

Aarhus is the centre of Arla Foods, the largest producer of dairy products in Scandinavia and the fourth largest dairy company in the world. Arla has three major brands: Arla, Lurpak and Castello cheese, which are sold worldwide. I just ask people if they can name any other brand that's made in Wales, not just in south Wales, which, if I went to a shop in Germany, or I went to a shop in France or Spain, I would find the Welsh equivalent of Lurpak, Arla and Castello cheese.

An area of growth must be to process more of the food locally and to get more of the economic benefit of processing the food as well of the benefit of producing it. Whilst no two cities are the same, especially when they're in different countries, and Aarhus's success rests on more than the above, it gives an indication of the direction of travel to have an economically successful city. Whilst the council with the city deal is moving the Swansea bay city region in the right direction, economic success for the area cannot be created by the council alone, or even led by the council alone. There is a need for the universities, the Welsh Government, the Westminster Government and the private sector to work together to grow the economy.

There are five key actions that I believe are needed. The city deal must go ahead and produce the employment and economic benefits planned for it. We need to get either a centre for entrepreneurship, like Mannheim, or a development park, like Aarhus, associated with the university in Swansea, or preferably both. There is opportunity for further university growth for them to focus on innovation and commercialisation. We need to support key growth sectors. And again, as I said earlier, the computer games industry is bigger than music and films combined. Dundee have found that. For those who are familiar with Grand Theft Auto, that comes out of Dundee.

And finally, we need to improve public transport connecting the different parts of the region. We're no less skilled, no less capable than other parts of the world; what we actually need is the drive and support of the Welsh Government and the universities to take us forward. Thank you.

I call on the Minister for Economy to reply to the debate—Vaughan Gething.

Thank you, Deputy Presiding Officer, and thank you to Mike Hedges for his choice of short debates, together with his opening remarks. Fascinating—I'm really interested in what Mike has had to say, and in particular the areas he's highlighted—it highlights some areas of continuing strength to build on, as well as potential new areas to look at in the future as well. And Mike has got a consistent interest in life science, the role of the university, and, of course, in not just ICT but the broader digital transformation of the economy. And I think all those things are consistent with what the Welsh Government wants to set out in our economic action plan and our deliberate approach to have more regional economic developments. And since the appointment of chief regional officers by my predecessor, Ken Skates, we've sought to foster closer and more effective collaboration with regional partners and stakeholders. And I believe that's bearing dividends, with collaboration being the key, and, actually, the growth deals have helped to bring together partners—the Welsh Government, the UK Government, and, crucially, local authorities as partners with businesses, universities and others.

We do, of course, face real challenges with both COVID and Brexit having a real impact on the economy of Wales and, indeed, the Swansea bay region. Now, up until a few weeks ago, we'd have been talking about the broad recovery following COVID—that's much more at risk now. What we do know is that with supply chains and staffing issues, they're hampering up the recovery, together with the increase in inflation, and today's figures are another reminder of that. But the OBR—the Office for Budget Responsibility, created by the Conservative Government—recognises, in its forecasts, that Brexit will double the long-running scarring effect the pandemic is likely to have on the economy. So, our changed relationship with Europe is a bigger challenge for us, and the links that Mike Hedges has highlighted, with European friends and partners, will become more important, not less. And I also think that, specifically, our links with the island of Ireland should provide real benefits to the Swansea bay region, in particular the exploitation of the economic potential, not just the renewable energy potential, of the Celtic sea.

We've been looking to maintain and protect businesses right across Wales, of course, including within this region. The £2.5 billion and more we've provided to support Welsh businesses during the pandemic has meant that in Swansea, over £127 million has been provided, in Neath Port Talbot, over £60 million, in Carmarthen, over £109 million and in Pembrokeshire, over £111 million from the Welsh Government to support businesses and jobs within those counties. And I'm delighted that Business Wales continues to assist businesses. When you think about this particular reason, there are hundreds of businesses that have been supported through the pandemic because of the activity of Business Wales. And that targeted approach has helped to save literally thousands of jobs. 

When we look at what we're looking to do to get more people into work, our employability strategy, which I'll report back on in the new year, is a key part of highlighting the support available for individuals, particularly those who have had the greatest impact with the pandemic, and those who are furthest away from the labour market. A key factor in that will be the challenge of giving people the skills to either increase their opportunities to work, or to enter the workplace full stop. Our regional skills partnerships will be a significant pivot—a pivotal component—within the skills landscape, with the labour market intelligence they provide us, but they're also strategic partners who bring together collaborations within their regions. They directly support our regional approach, and the city and the growth deals within Wales that the Member highlighted in his speech as well. 

Alongside that, of course, we've continued to develop our regional economic frameworks, and I think they are an essential part of the future for economic development in Wales. They're a vehicle to further develop the collaboration that we recognise—and the Member's highlighted a number of areas not just within the Swansea bay region—but they're part of the success story of Mannheim, of Aarhus and other European regions as well, and how we deliver with collaborative regional planning, that binds in public, private and third sector partners, with a shared vision for the regional economic future.

Now, the good news is that those regional economic frameworks are well advanced, with Welsh Government officials working with those regional partners to try to define an agreed set of economic development priorities for each region. And in the Swansea bay region, the draft framework already reflects the work that's been carried out beforehand from preparing a regional economic delivery plan for the region, and we're expecting publication of that on or before Christmas. So, I do want to place on record my thanks to all partners within the Swansea bay region for the way that they have worked constructively together, and the way that we want to continue working with them now and in the future, and the additional work that I've commissioned the OECD to do alongside that. 

As well as that work on the regional economic framework, of course, we've seen that the Swansea bay deal in particular has recognised the reality that there is a viable and potentially significantly profitable new marine renewable energy sector that's part of the pilot within the Swansea bay city deal. The city deal aims to deliver over 9,000 skilled jobs—an increased GVA by £1.8 million. We're pleased that the region has made progress with the development of a portfolio project, with eight of the nine projects already up and running and proceeding. And the funding that's been released so far means that we've already given three years of the first funding, with over £54 million of the city deal programme already being out to be spent. That's really good news, because it isn't just about the money, it's the drive of enterprise and innovation that makes your partner see your return on the time that they've invested in working with each other.

And, again, the university sector have been key to this as well, exactly as Mike Hedges has pointed in other regions where they've been successful. Having a research-focused university and having research, development and innovation that involves the university sector and the private sector is key to the future of successful economic development. And I think that, actually, the Swansea bay region has much to offer in support and encouragement for the rest of Wales as well. That really is helping to deliver marine energy projects in Pembrokeshire—the Pembroke Dock marine—but also, of course, the ambitions we continue to have for lagoon technology as well. But I think, also, it highlights the opportunity that exists within the Celtic sea. The Irish Government, together with Welsh Ministers, have had constructive conversations together with the private sector, and I think there are real opportunities, not just to generate, as I've said, a greater source of renewable energy, but to generate real, significant economic opportunity in supply chains of construction, which will be a significant endeavour for us and will, inevitably, involve this sector. The research to date, with the Offshore Renewable Energy Catapult, has identified those opportunities, and I'm keen to see those taken up with partners in the Swansea bay region, together, of course, with Ministers here in our climate change department.

We will, of course, continue to work with Swansea Council to further its ambitious programme of regeneration and economic development for the city. The city deal itself has been instrumental in creating a pipeline of additional regeneration projects that, in Swansea alone, are worth over £1 billion. As Mike Hedges highlights, there are good reasons to be positive about the future for the Swansea bay region, but, more than that, there is a considerable appetite to learn from other parts of the world, including Mannheim and Aarhus, to deliver a healthier, greener and more prosperous Swansea bay region, as part of a healthier, greener and more prosperous Wales.

I look forward to carrying on these discussions with Members from across the region, including, of course, the constituency Member who has brought forward this debate today. I wish you all a very peaceful, I hope, Christmas and new year, and, if it can't be that, at least I look forward to seeing you all in the new year at some point as well. Take care.

Thank you, Minister.

Before I close today's business, can I wish you all and your families a very peaceful, happy and safe Christmas and new year? I look forward to seeing you in the new year, all in good health, and I hope good health stays with you and your families during this time.

That brings today's proceedings to a close.

The meeting ended at 17:46.