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Technology is no longer a vertical sector that operates in a silo, it’s a multi-sector horizontal that has the potential to revolutionise previously ring-fenced sectors.
Despite the challenging financial climate, Wales is resilient and has always punched above its weight. Throughout the last decade we’ve seen remarkable growth in industries such as fintech, insurtech, cyber, compound semiconductors, data, medtech, green tech and creative industries across Wales, and we don’t see that slowing down anytime soon. Wales is poised for success with a thriving tech ecosystem, a robust network of business support, affordable living, and a growing economy.
However, like any ecosystem, Wales has its challenges. And this means that there are certainly still gaps in the Welsh tech ecosystem, most notably around access to finance and talent retention, but this is improving all the time.
At Tramshed Tech, we see this first-hand with the quality and scope through our incubator and accelerator programmes which facilitate access to funding and support, as well as in the increasing strategic engagement with and from international partners.
We’re thrilled to have supported the creation of UKTN’s report on the Welsh tech ecosystem, recognising the importance of ongoing research to identify opportunities and blockers as a way to improve our tech ecosystem here in Wales.
Technology venture investments director, Development Bank of Wales.
The tech ecosystem in Wales is a key driver of economic growth, innovation, and employment. The country leads in several tech sectors, with South Wales on track to become a world leader in the development of compound semiconductors.
The pan-Wales tech ecosystem has continued to grow at scale, and in 2022 the Welsh government’s Trade and Invest Wales initiative estimated that the total value of the Welsh tech sector was £8.5bn. The importance of the sector to the Welsh economy was highlighted in April 2023 when a partnership agreement between the Welsh government and Innovate UK was signed, which aims to build strong collaborations both nationally and locally, and to support innovation and drive economic growth in Wales.
But there is still more to be done, particularly around key issues such as funding, access to finance and access to digital skills.
That’s why we’re delighted to be involved in this spotlight on the region. This report reminds us of what makes this region so thriving and what more can be done to continue to position it as an attractive ecosystem for startup and scaleup talent, infrastructure and continued investment.
Office senior partner,
South West and Wales region, KPMG in the UK.
• Industry Wales
• Centre for Photonics Expertise
• National Radio Spectrum Centre
• Driving Electric Revolution
• Resilient Works
• Tramshed Tech
• SETSquared
• Barclays Eagle Labs
• M-SParc
• Business in focus
• OpTIC Technology Centre
• AberInnovation
• Sony UK Technology Centre
• Alacrity Foundation
• Natwest Accelerator
• Transport for Wales Accelerator
• Cardiff University
• University of South Wales
• Cardiff Metropolitan University
• Swansea University
• University of Wales Trinity St David’s
• Aberystwyth University
• Wrexham University
• Bangor University
• FinTech Wales
• Technology Connected & Blockchain Connected
• Cyber Wales
• Cyber Innovation Hub
• CS Connected
• CSA Catapult
• Life Sciences Hub
• Medi Wales
• AI Wales
• VR Wales
• Market Share
• Mid Wales Manufacturing Group
• North Wales Tech
• South Wales Tech
• Development Bank of Wales
• Admiral Group
• Cardiff Capital Region’s Innovation Investment Capital
• British Business Bank’s Investment Fund for Wales
• The S4C Commercial Growth Fund
• Angels Invest Wales
• Waterspring Ventures
• Nurture Ventures
The South West Wales region, made up of Neath Port Talbot, Swansea, Carmarthenshire, and Pembrokeshire, is home to two of Wales’ seven main universities: Swansea University and University of Wales Trinity St David, which has campuses across the region. The region’s tech community clusters around Swansea and the university hubs, with significant activity in and around Port Talbot.
Swansea University’s enterprise team offers incubation for startups, opportunities to trade on campus and guidance from an entrepreneur-in-residence – all of which have helped support a number of successful spinouts.
University of Wales Trinity St David is home to Yr Egin on its Carmarthen campus, a creative and digital centre for resident tech companies and startups.
Manufacturing is more prominent in South West Wales than in other places across the country, particularly in Neath Port Talbot, home to Tata’s Steelworks. As a result, there has been particular attention on and investment into net zero technologies to ensure a more sustainable industry, including an Innovate UK-funded Launchpad competition for South West Wales focused on net zero, which also aimed to promote offshore energy opportunities.
Sony has manufactured devices in South West Wales for 50 years and has run the Sony UK Technology Centre near Bridgend since 1993, which provides incubation and support for startups.
Success stories of the South West region include Veeqo, a software company with a commitment to creating highly-skilled tech jobs in Swansea and the surrounding area, which was acquired by Amazon in 2021; customer experience platform Vizolution, acquired by B2B SaaS platform Lightico in 2023; and Marine Power Systems, pushing boundaries in the marine energy sector from its headquarters in Swansea.
Mark John,
co-founder at Tramshed Tech.
Green tech is an exciting space which holds significant promise in Wales – particularly West Wales with Celtic Energy and the UK Government’s promised Milford Haven / Port Talbot Freeport. A new commission has been set up to examine the potential of building a Severn barrage, which if realised could create green energy to meet up to 10% of the UK’s electricity needs.
With technology hubs in both Cardiff and Newport, South East Wales is the most active region for innovation across a number of subsectors.
In Cardiff, fintech and insurtech have flourished, in part due to firms like Admiral, and its spinout Confused.com pioneering new opportunities in digital insurance and financial services more than 20 years ago, with a new generation of fast-growing startups now taking up the mantle.
Cyber is another prominent strength in the region. The cluster around Cardiff includes the Airbus Centre of Excellence in Cyber Security Analytics, Cardiff University and the University of South Wales, which both offer multiple cybersecurity-related degree courses and world-leading cyber research programmes, and cyber companies like PureCyber and Awen Collective. Cyber Innovation Hub, established in 2023, is led by Cardiff University and funded by the Welsh Goverment and Cardiff Capital Region to establish a pipeline of high-growth cyber businesses creating world-class solutions within South Wales.
Data analytics and intelligence are particularly strong in both Cardiff and Newport, in part due to the presence of the Office for National Statistics, the Intellectual Property Office and, more generally, the opportunity for data companies to work with public sector organisations that are particularly prominent in Wales’ small market. Newport is home to Europe’s largest data centre campus (Vantage Cardiff), alongside Microsoft data centres.
Newport’s world-leading compound semiconductor cluster is set to receive £160m as one of the UK government’s investment zones announced in 2023. The acquisition of Nexperia Newport (also known as Newport Wafer Fab) by Vishay Intertechnology will see the US tech giant invest £1bn into the semiconductor manufacturing facility over the next three years, safeguarding the 400 existing jobs and expanding the workforce.
International tech businesses – both multinationals and ambitious scaleups – have set up bases in South Wales due to a variety of pull factors – including industry specialisms and access to highly skilled talent pools. One example is Nigerian digital bank Pryme Financial, which relocated to Newport through Tramshed Tech’s Soft Landing Programme, which connects companies with the local ecosystem and market opportunities in Wales.
Predominantly a rural area, Mid Wales’ main industries centre around agriculture and tourism, alongside a number of manufacturing businesses (140 are represented by Mid Wales Manufacturing Group).
Aberystwyth University drives much of innovation and knowledge transfer in the region, and sister organisation AberInnovation provides a regional hub for business incubation, with both repeatedly named as important players in the Welsh tech ecosystem by tech leaders outside Mid Wales. AberInnovation specialises in biotech, agritech, food innovation, with a strong emphasis on environmental projects and innovation to support a circular economy.
Mid Wales Manufacturing Group supports growth in the sector through skills and training, networking opportunities and knowledge exchange both within and beyond the sector.
A key priority for the region – through the Mid Wales Growth Deal – is improving digital connectivity and infrastructure to enable businesses already in Mid Wales to digitise, improve efficiency and take up new business opportunities – for example using IoT, and to make the region a more attractive place for new, digitally native businesses to start up.
In 2023, AI company Delineate chose Mid Wales (Ceredigion) for its headquarters, housing 50 employees in a new office. The announcement by Delineate and tech and business stakeholders credited the region’s superfast broadband rollout for enabling the first ‘research technology’ company to choose Mid Wales as its base.
North Wales is home to Wales’ first science park, M-SParc on Anglesey, part of Bangor University. The team also extends their support for tech businesses across the region, with rotating ‘On Tour’ hubs across North West Wales. M-SParc runs an agritech cluster, a business angels network, a five-month accelerator programme a skills academy for employees in the region, along with other business growth projects.
Much of the region’s tech activity is in and around Wrexham, with the university at the heart of the business and enterprise community. Until 2023, Wrexham Enterprise Hub provided physical incubation space, operated by coworking organisation TownSq, but the Enterprise Hub has closed its doors, with organisations now exploring options to re- establish the initiative.
In 2020, Business Cloud’s ‘Wales Tech 50’ ranking featured five Wrexham tech companies – showing significant representation for the area, just behind Newport and Swansea with six companies each. Notable Wrexham startups include social enterprise Fair Event Management and Familiarisation Videos, which creates detailed video tours of public spaces so people with access needs can understand the facilities ahead of a visit.
OpTIC Technology Centre – a subsidiary of Wrexham University based in St Asaph – supports high-tech and R&D-intensive companies, with a particular focus on photonics, precision optical systems, biotech and solar energy.
Carl Griffiths,
Technology Seed Fund manager, Development Bank of Wales.
Wales is now competing on the world stage thanks to ongoing investment, maturing ecosystem and ability to attract and retain some of the best talent. In fact, the tech sector is a real hotspot in Wales and it is growing rapidly with AI and ML transforming the world of technology. Both are driving innovation and creating new opportunities as are the cybersecurity and the semiconductor industries but the real growth over the last five years has been in the fintech sector, which now has a significant impact on the Welsh economy.
45,000 employees in the Welsh tech & digital sector
Source: Trade and Invest Wales
3,500 technology companies in Wales, including home-grown & multinationals
Source: Trade and Invest Wales
£157m: venture capital invested in Welsh companies in 2023, across 28 rounds
Source: Dealroom
£802k: average size of an equity investment into a Welsh business
Source: Beauhurst Investing Wales report
39.3%: five-year business survival rate
Source: Trade and Invest Wales
20,675: new startups created in Wales in 2023
Source: R3 analysis
£1bn spent on research and development (R&D) by Welsh businesses in 2022
Source: Welsh government
David Williams,
office senior partner for South West and Wales region at KPMG in the UK.
The latest KPMG Local Business Index showed that eight of the 22 local authorities in Wales are classified as ‘High Research and Investment” localities, indicating higher rates of investment and business expansion. Areas in this cluster – the most dominant cluster across Britain – show the highest rates of future investment reported by firm owners, together with high rates of R&D expenditure and growth in venture capital investment. These areas are most likely to experience capital investment and business expansion.
