Cardiff is the capital of Wales in the UK, and it’s less than two hours’ journey time by rail from London. There are 1.6 million people within a 45 minute commute of Cardiff, and the city has a young population with well over half aged under 35. MCJ Lemagnen (MCJ) speaks to Ken Poole (KP), Head of Economic Development, Cardiff Council.
MCJ: There’s quite a buzz developing amongst tech companies about Cardiff in Wales at the moment. What do potential investors need to know about the city and surrounding South Wales region?
KP: There has been significant investment in Cardiff over the past 20 years and the transport and digital infrastructure are excellent. The electrification of the rail line between Cardiff and London will be completed in 2020, reducing travel time between the two capitals to 90 minutes. We have 98.4% penetration of superfast broadband, boosted by an Internet Exchange in the heart of the city. Cardiff Airport has direct flights to many European locations and regular scheduled flights to destinations around the world via Amsterdam and Dublin. It also has a daily service to Qatar airways to Doha’s international hub.
It’s a fast growing city – jobs rose steeply in the decade following the millennium and the population is predicted to grow by over 20% in the next two decades and even faster than London. We’ve recently launched our new Economic Strategy for Cardiff which sets out the vision for the city moving forward.
Our talent pool is highly skilled, adaptable and dependable. We have leading universities with 70,000+ students, producing well qualified graduates in key sectors such as business and finance, creative industries, life sciences and advanced manufacturing. Nearly 60% of the workforce is qualified to degree level (NVQ Level 4+, Nomis 2018), yet labour costs here are significantly lower than many other large UK cities. Cardiff is ranked highest of any UK core city in the Global Talent Competitiveness Index (instead 2019). Under the Cardiff Commitment initiative, 200 businesses are working with schools in the city to ‘open the eyes’ of pupils to new employment opportunities.
Cardiff is consistently recognised as one of the best cities by residents. In the 2016 EU Quality of Life in European Cities survey, Cardiff came top in the UK for: cultural facilities, quality of public space (and top 10 in Europe for this), retail (and 5th in Europe), and second in the UK for sports facilities. It also ranks highly for overall quality of life and green space per person. Cardiff is home to the Principality Stadium, Europe’s largest indoor arena which has a capacity of 75,000 and hosts major events such as the UEFA Champions League, international rugby and Ashes cricket. People love living in Cardiff – over a third of graduates are still in Wales 10 years after graduation. It’s a city which makes it easy to find a great work/life balance.
MCJ: Which industries do you specialize in? I understand that FinTech and business services are important sectors for you.
KP: Cardiff has strong ecosystems in finance, creative industries, life sciences and Industry 4.0. Finance, insurance, real estate and business services now account for £3.5 billion of output and across Wales over 153,000 people work in this sector. This is predicted to grow to 200,000 by 2021. Cardiff has a growing reputation as an alternative FinTech capital to London and has particular expertise in aggregator site technology, cyber security and data management. The city is very strong in the traditional banking and insurance sector, particularly medical underwriting, pensions and accountancy. ‘Born in Cardiff’ insurer Admiral Group and disruptor banks such as Monzo and Metro Bank are here. Employment in insurance is seven times higher than the UK average.
Admiral is an excellent example of the long-term support we can give to businesses. They launched in Cardiff in 1993 with 57 staff and no customers. Now it is a FTSE 100 company with a turnover of more than £1 billion, it employs 10,000 people in 8 countries and has over 6 million customers worldwide.Principality Building Society is headquartered here too. It is the UK’s 6th largest building society, with over £9 billion in assets, 53 branches and 18 agency counters across Wales and the Borders.
There are some exceptional collaborations between industry and education in Cardiff, for instance the Welsh Financial Services Graduate Programme. This is a two-year full-time programme unique to Wales to develop an elite talent pool in the financial services sector. It is backed by leading employers including Admiral, Atradius, Hodge Bank, Development Bank of Wales, Principality Building Society, Legal & General and Motonovo, and graduates are moved around between the businesses to gain a wide range of experience.
Another example is the collaboration between Cardiff Business School and trading company OSTC to develop a Cardiff Trading Room simulation. Ranked in the world’s top 150 for Business and Economics (Times Higher Education World University Rankings 2019), the University of Cardiff has a close relationship with businesses in the city including Legal & General, leading to the development of the largest cluster of medical underwriters in the UK.
MCJ: What can you offer creative industries in Cardiff? Is the city welcoming to creative startups?
KP: Cardiff has one of the UK’s fastest growing creative clusters outside London, with employment increasing 58% between 2005 and 2018. There are 3,000 creative businesses and around a third of all Welsh creative industry jobs are based here. A significant concentration of companies have been attracted by the presence of major broadcasters such as the BBC, ITV and S4C. Productions based here include triple Emmy Award winning ‘Sherlock’ as well as leading BBC prime time productions ‘Doctor Who’ and ‘Casualty’. Industry heavyweights Jane Tranter and Julie Gardner founded Bad Wolf in Cardiff to produce ambitious dramas for the global TV market. They have secured a pipeline of productions including an adaptation of Philip Pullman’s fantasy trilogy ‘His Dark Materials’ filmed in their new 250,000 sq ft studio, and they count Netflix amongst their biggest customers. BBC Wales has invested in a new regional HQ at Cardiff Central Square, designed by renowned international architects Foster & Partners. This statement building is the centrepiece of a new destination for the creative sector in the city centre.
We have a deep talent pool in this sector. There are 7,000 creative industries graduates a year, qualified in a wide range of subjects including animation, visual effects, digital and mobile technology development, gaming, fashion and fine art. This sector contributes over £1 billion of GVA to the city’s economy. We have a number of games developers in Cardiff Capital Region, and we are working with our counterparts in Bristol (an hour’s drive away) to further develop the creative cluster. Cardiff Start is a community of tech and creative industry entrepreneurs, investors and students.
MCJ: You mentioned life sciences as being a specialist sector for Cardiff.
KP: Yes, life and health sciences employ 17,000 people in the city, working in areas such as eHealth, pharmaceutical services, regenerative medicine and medical technology. Compared with the UK average, we have a higher proportion of people employed in sub-sectors such as irradiation manufacturing, electromedical and electrotherapeutic equipment, medical and dental instruments and pharmaceutical preparations.
The Cardiff Capital Region is home to one of the world’s top five diagnostics companies, Ortho Clinical Diagnostics, as well as Norgine, a leading European specialist pharmaceutical company and ReNeuron, the first company to carry out clinical trials of stem cells in stroke patients. We have world leading research expertise with a strong commercial outlook:
- Life Sciences Research Network with 300+ partners;
- £4 million Welsh Wound Innovation Centre;
- Cardiff University is the base for Sir Martin Evans, a Nobel Prize Winner for his discovery of embryonic stem cells;
- MRC Centre for Neuropsychiatric Genetics at Cardiff University;
- University Hospital Wales incubator - Cardiff Medicentre;
- Life Sciences Hub Wales which seeks to stimulate interaction and innovation in life sciences.
MCJ: How has Cardiff been able to transition from its industrial heritage to Industry 4.0?
KP: We have a thriving advanced manufacturing sector, with around 9,000 people employed in sub-sectors from electronic appliances to construction materials. Cardiff’s specialisms range from electronics, to state-of-the-art steel production in Europe’s most efficient electric arc furnace at Celsa Steel UK.
Semiconductor producer IQE is a great example of a Cardiff advanced manufacturing startup. Founded in 1988, they manufacture bespoke compound wafers for the major chip manufacturers and are now the largest independent outsourced producer in their category. Building on their success, a £40 million investment is supporting the development of the compound semiconductor cluster in Cardiff Capital Region.
Across the region there is expertise in aerospace and defence with GE Aviation, British Airways, Airbus Defence & Security, BAE Systems, General Dynamics all present. We have Enterprise Zones dedicated to aerospace and manufacturing and also an interdisciplinary Centre for Advanced Manufacturing Systems at Cardiff University (CAMSAC).
MCJ: What role does your organisation play in attracting entrepreneurs to invest in Cardiff and South Wales?
KP: We offer a range of facilities to attract entrepreneurs including bespoke support packages such as:
- dedicated inward investment account manager (long term);
- in-depth research including cost comparisons and benchmarking against other investment;
- propositions to support a business case;
- property searches and introductions to commercial property partners and advice on costs and potential locations;
- free support with recruitment and training from our expert Into Work team;
- organising familiarisation visits for key staff;
- introductions to local business networks, R&D centres and universities;
- access to local authority services such as planning and business rates; and
- ongoing post-investment support including a dedicated Invest in Cardiff account manager.
In terms of finance, parts of Cardiff benefit from Assisted Area status and financial support is potentially available for businesses, depending on the location and number of employees. Several institutions offer commercial finance, including the Development Bank of Wales. We offer attractive commercial rental packages and rent-free periods, and Cardiff has both high quality sites and Grade A office space in the private and public sectors in the city centre, Enterprise Zone and city edge locations. We have a portfolio of technology/incubation units for short term accommodation too. Property costs are very attractive when compared with alternatives such as London. For instance, rental costs at Cardiff Council’s city centre incubator, Cardiff Business Technology Centre, are £10.50 - £13.50 per sq ft plus service charge.
‘Foreign Direct Investment and the Rise of the Unicorns’ Report
This report is produced by MCJ Lemagnen Associates Ltd and is independent of any government or economic development agency.
©MCJ Lemagnen Associates Ltd 2019