Wales has the talent, ambition, and resources to thrive in a rapidly changing economy. Yet too many businesses face barriers that hold back investment, innovation, and growth.
ICAEW represents over 210,000 members and students globally. Our 3000 members in Wales work across every part of the Welsh economy, running businesses of all sizes, leading major firms, advising and assuring organisations across Wales, and helping deliver vital public services, giving us insights that are essential to shaping effective solutions for Wales.
This breadth of expertise gives us unique insight into the challenges businesses face and the practical solutions that work. ICAEW’s Business Confidence Monitor (BCM) shows that business sentiment in Wales slipped back into negative territory in Q4 2025, falling to -7.8. While driven in part by rising tax and regulatory burdens, confidence in Wales still remains above the UK average (-11.1).
This highlights the underlying resilience of the Welsh business community and its capacity to thrive when conditions are right – notably Welsh businesses expect exports to rise by a record 7.0% in the year ahead, almost double the increase anticipated across the UK (4.1%).
However, this relatively higher confidence level does not diminish the persistent barriers to growth; overall our growth forecasts are weak for Wales on current conditions, with profit growth expected to slow to 1% over the next 12 months. Our members have been clear about the challenges holding businesses back, challenges felt particularly acutely in Wales where small and micro‑sized enterprises form the backbone of the economy. For too many firms, doing business remains too difficult, too expensive, and too uncertain.
To unlock growth, we have set out our member‑driven priorities designed to make doing business in Wales easier, more affordable, and more predictable. We have focused on where government action can make the greatest difference in creating a stronger, more competitive economic environment.
But, the most important long-term driver of economic growth, and therefore improved standards of living for the people of Wales, is productivity. The next Welsh Government must take immediate steps to improve productivity and remove barriers to improvement. That’s why we are calling for a Commissioner for Productivity to ensure that productivity is at the very heart of economic renewal in Wales. It can not be an afterthought or a theoretical debate. We must see real, tangible action if we want to close the productivity gap with the rest of the UK.
Member priorities to enable growth
It's too difficult to do business
ICAEW Wales members say:
SME’s are increasingly reliant on finding skills through remote working, removing the barrier of location in Wales. I’m unsure if policy makers know of or even acknowledge this reality, but transport links are so often discussed in interview situations.
Limited transport infrastructure across the country. Very expensive transport links into London. An airport that doesn’t offer budget travel to main European cities. In trying to panda to every sector there is no clear expertise that draws related supply chains in.
Deliver reliable, high-quality transport and digital infrastructure that enables seamless UK and international client service, reinforcing Wales as a credible location for high-value professional firms.
Infrastructure weaknesses make doing business in Wales difficult. Poor transport and connectivity to other parts of Wales and beyond are a significant barrier to growth. Limited road links and congestion on the M4 increase costs for moving goods and accessing markets. These infrastructure gaps make it harder to attract investment and skilled workers, leaving many businesses unable to compete effectively or scale operations.
ICAEW Wales members say:
We are too small to develop our own bespoke apprenticeship programme Some means of picking various elements from various sources to create a specific company based apprenticeship would be fantastic.
In order to base our future plans on local skills rather than recruiting externally we need to know that support will remain in place.
[We need] Well educated professionals with a desire to stay in Wales for a career.
Communication skills seem in particularly short supply. The ability of young people to communicate face-to-face, over the phone or in writing seems very poor. Additionally, young people are leaving school with such poor Word and Excel skills.
Skills shortages and education gaps make it hard to attract and retain talent
Misaligned courses and low attainment leave businesses without the skilled workforce they need to grow. Recent data from the Welsh Government show 7.9% of working age adults in Wales have no qualifications and fewer than half hold Level 4+ (HE level) qualifications. (Welsh Government, Levels of highest qualification held by working age adults: 2024, APS/ONS, published 30 April 2025). The Open University Business Barometer 2025 reinforces this, reporting that 58% of Welsh organisations face skills shortages the highest among UK nations and 20% lack confidence in delivering AI strategies due to talent constraints.
These shortages limit productivity and innovation, and make investment in education, training, and employer led development essential.
It's too expensive to do business
ICAEW Wales members say:
Whilst costs are guaranteed, there is never any certainty that investment will generate additional revenue streams. Business is extremely tough at the moment, with pressures from all directions.
Support is available but often geared toward manufacturing or technology sectors. Professional services firms would benefit from more tailored advisory support around AI governance, data security.
Technology adoption is a major cost barrier for SMEs in Wales
Technology adoption is a major cost barrier for Welsh SMEs. Digitalisation and automation are essential for productivity and market access, but software, training, and expertise remain prohibitively expensive for smaller firms. According to the Open University’s Business Barometer, 56% report low confidence in adopting AI and 48% in adopting green technologies.
Without targeted support and incentives, these cost hurdles risk leaving SMEs behind in the transition to a digital and sustainable economy.
ICAEW Wales members say:
A system that recognises investment in modern office space and technology, avoids penalising firms for occupying high-quality premises in city centres, and provides multi-year certainty to support long-term leases and capital investment.
Provide long-term certainty on business rates and tax policy so we can plan office investment and recruitment with confidence.
Currently businesses are encouraged to scale down or rein in growth rather than invest.
Business rates are making it increasingly expensive to operate in Wales, placing high‑street firms and locally rooted businesses at a competitive disadvantage compared with large multinationals and online‑only retailers. Beyond this immediate pressure, business rates create a deeper investment dilemma: businesses must choose between investing in premises that could support future growth; while knowing they will face higher business‑rate liabilities, or adopting a more restrained, space‑constrained model that limits their long‑term ambitions.
It's too uncertain to do business
ICAEW Wales members say:
A Vision, accompanied by clarity of purpose in both voice and deed. If we want to be more attractive – what for / who too and how?
[We need] international promotion of Wales as a professional services hub…. Wales is sometimes overlooked as a base for high-value professional services compared to London or major English cities.
[We want to] feel that Wales is a nation that is being governed to see the private sector grow and flourish.
There remains a persistent perception that Wales is not as investable as other parts of the UK, despite evidence to the contrary. Wales was the only UK region to register an increase in new businesses in Q4 2025, with equity fundraising rising by 396%, signalling strong entrepreneurial energy and growing investor interest. Yet this performance is not always reflected in how Wales is viewed by potential investors.
ICAEW Wales members say:
The challenge should be what is the USP for these areas that someone would invest.
Due to the geographical position of Wales both wind and tidal energy should be exploited. This may lead to lower energy costs which might attract more investment.
Regional disparities within Wales further deepen uncertainty for businesses and investors
Economic challenges vary between areas, with some regions experiencing rising business closures and mounting pressure on key sectors such as tourism. Gaps in educational attainment and productivity compound these issues, leaving certain communities with fewer skilled workers and limited growth prospects. As a result, talent and skilled workers are often drawn toward seemingly more prosperous parts of Wales, or leave altogether, intensifying the cycle of decline.
Solutions: overcoming the barriers to growth
ICAEW is ready to work with the Welsh Government to deliver practical solutions that unlock Wales’s economic potential. Our members bring real-world insight from a diverse range of businesses across every sector of the economy an invaluable resource to help deliver meaningful results for businesses and communities across Wales. If government is serious about growth, they must provide certainty and stability: clear, consistent policies that give businesses the confidence to invest and plan for the long term.
1. Simplify Doing Business
- Unlock Wales’s full economic potential by removing the barriers that make doing business difficult
Improve infrastructure
- Strengthen and refocus Wales’s long term infrastructure strategy addressing Audit Wales’s findings of weak delivery, unambitious investment areas, and inconsistent budgeting. A renewed 10 year approach should aim to close transport and digital connectivity gaps, expand demand responsive links for rural business hubs. Giving investors and communities the long term certainty currently missing from implementation.
- Maintain and deliver at pace the Burns Delivery Unit’s programme to upgrade rail, bus and active‑travel links along the Cardiff–Newport corridor, completing new stations, sustainable transport corridors and active‑travel improvements to ease congestion and provide reliable, low‑carbon alternatives to the M4.
Close the skills gap
- Develop a national education and training strategy that sets out clear pathways from school to work, including apprenticeships and higher technical qualifications, providing transparent guidance for learners and employers on progression routes and funding options.
- Create an apprenticeship system that reflects employer demand and strengthens the skills pipeline, with clearer progression routes, expanded access, and professional and technical pathways aligned to the UK’s eight key growth sectors.
- Expand mentoring and employer-led programmes to connect learners with industry professionals, providing guidance on career pathways, workplace skills, and progression opportunities, helping bridge the gap between education and employment.
- Regularly review and update the Digital Competence Framework within the Curriculum for Wales to ensure it keeps pace with rapidly evolving technologies and employer needs, so digital capability is taught to the same high standard as Maths, English and Welsh and young people leave school with the core digital skills required to thrive in a modern economy.
2. Lower costs for growth
- Target support to reduce the cost burden on businesses so they can invest in growth and productivity- Scale Up Digital Adoption Support. Expand PACE Cymru and SMART Digital programmes, increasing grant ceilings and outreach to rural SMEs. These initiatives already help firms adopt ERP systems, AI tools, and cybersecurity solutions scaling them will accelerate Wales’s digital transformation.
- Streamline procurement, accelerate funding access, and enhance SME investment readiness programs to make it easier for small businesses to win contracts, access finance quickly, and prepare for investment, boosting growth and competitiveness across Wales.
Reform business rates
- Ensure business rates relief reflects real cost pressures.
Welsh businesses, especially SMEs and high street, hospitality, and town centre firms, are facing rising fixed costs at a time of weak demand and tightening margins. Relief needs to match the scale of these pressures so viable businesses are not forced to scale back or close simply because rates remain inflexible and disconnected from economic conditions. - Reform the system so liabilities reflect profitability and trading activity. The current property based model penalises businesses that occupy larger premises, even when revenues fluctuate or trading hours are limited. A fairer approach, including hybrid assessment models, would ease disproportionate burdens on space intensive sectors and remove the current disincentive to invest in premises, technology, or future growth.
- Reward firms that invest, expand, and anchor themselves in Wales. Targeted relief should support businesses headquartered in Wales or committing to long term investment here. This could include incentives for modern office space, digital infrastructure, and decarbonisation upgrades, helping to attract and retain high value employers while strengthening regional economic resilience.
3. Deliver certainty
- Provide the clarity and stability businesses need for long-term planning while positioning Wales as an attractive destination for investment and growth
- Enhance and elevate Wales’s International Strategy into a clear, confident economic identity for Wales, that aligns with the UK’s Modern Industrial Strategy. This will showcase Wales’s distinctive strengths in advanced manufacturing, clean energy industries, digital technologies, and professional and business services. By positioning Wales as a leading contributor to these sectors, the enhanced strategy will reinforce the UK-wide ambition to increase business investment, grow future industries, and develop high-performing regional clusters, while giving people in Wales a clearer sense of economic opportunity and long-term ambition.
- Work with local authorities to develop clear, region‑specific investment propositions grounded in each area’s unique strengths, ensuring left‑behind regions can build a distinctive economic identity and attract new investment, while complementing rather than competing with Wales’s established economic hubs.