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Cardiff Economic Forum

  1. 1. Cardiff Economic Forum 7 December 2022 @ONSfocus #ONSEconForum
  2. 2. Introduction Sonia Carrera Deputy Director Office for National Statistics @ONSfocus #ONSEconForum
  3. 3. Agenda 09.30am – 10.00am Registration and tea and coffee 10.00am – 10.05am Introduction – Sonia Carrera, Deputy Director, Office for National Statistics 10.05am – 10.10am Welcome - Stephanie Howarth, Chief Statistician, Welsh Government 10.10am – 10.25am State of the UK Economy – Richard Heys, Deputy Chief Economist, Office for National Statistics 10.25am – 10.40am ONS plans for subnational statistics – Andrea Lacey, Head of Subnational Statistics Development, Office for National Statistics and Heledd Rees, Office for National Statistics 10.40am – 10.55am Q&A 10.55am – 11.10am Break/refreshments 11.10am – 11.25am How has health and labour force participation in Wales been impacted by the pandemic? – Brendan Collins, Head of Health Economics, Welsh Government 11.25am –11.40am Different inward investment models in the local economy: Some insights from the Compound Semiconductor sector – Max Munday, Cardiff University 11.40am – 11.55am Q&A 11.55am – 12.00am Closing remarks, Sonia Carrera, Deputy Director, Office for National Statistics @ONSfocus #ONSEconForum
  4. 4. Welcome Stephanie Howarth Chief Statistician Welsh Government
  5. 5. State of the UK Economy Richard Heys Deputy Chief Economist Welsh Government @ONSfocus #ONSEconForum
  6. 6. The long-term productivity outlook is challenging Source: ONS Source: ONS 80 85 90 95 100 105 110 115 120 125 130 2000 Q1 2003 Q3 2007 Q1 2010 Q3 2014 Q1 2017 Q3 2021 Q1 Labour productivity, 2000Q1 - 2022Q2 (2019=100) output per hour pre-crisis trend post-crisis trend -10 -8 -6 -4 -2 0 2 4 6 8 2019 Q1 2019 Q3 2020 Q1 2020 Q3 2021 Q1 2021 Q3 2022 Q1 2022 Q3 per cent Output per hour: between and within effects Between industry re-allocation Within-industry productivity growth Total Period of CJRS @ONSfocus #ONSEconForum
  7. 7. The broad economic outlook is challenging 75 80 85 90 95 100 105 110 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Index 2019 = 100 Independent forecasts, UK economy OBR March 2020 forecast OBR March 2022 forecast OBR November 2022 forecast BofE November 2022 forecast (ME) BofE November 2022 forecast (3%) Source: Office for Budget Responsibility, Bank of England Source: GfK Consumer Confidence -60 -50 -40 -30 -20 -10 0 10 20 1985 1990 1995 2000 2005 2010 2015 2020 Overall Index Score UK household confidence GFK - Overall Index Score, consumer confidence @ONSfocus #ONSEconForum
  8. 8. Forward indicators of inflation continue to indicate further pressure 85 90 95 100 105 110 115 120 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 Labour costs, 2015Q1-2022Q1 Unit labour costs Average Weekly Earnings (nominal) -10 -5 0 5 10 15 20 25 Jan-10 Jul-11 Jan-13 Jul-14 Jan-16 Jul-17 Jan-19 Jul-20 Jan-22 per cent CPI and PPI, annual growth rates input PPI CPI Source: ONS Consumer Price Inflation, Producer Price Inflation Source: ONS – UK Flash Productivity, Average weekly Earnings @ONSfocus #ONSEconForum
  9. 9. High inflation continues to be a challenge for the UK and global economies Source: ONS Source: ONS, Global Inflation -2 0 2 4 6 8 10 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Per cent G7 CPI (UK CPIH) Max/Min Median UK -2 0 2 4 6 8 10 12 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Per cent CPI Inflation Energy Food Other CPI @ONSfocus #ONSEconForum
  10. 10. Macroeconomic policy is tightening in response Source: Bank of England Source: HM Treasury – Autumn Statement 0 1 2 3 4 5 6 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Per cent UK base Interest rates Bank Rate Market Expectations Aug-22 Market Expectations Nov-22 -£10 £0 £10 £20 £30 £40 £50 £60 2022-23* 2023-24* 2024-25 2025-26 2026-27 2027-28 Billions Autumn Statement Spending Plans Tax Spending *Not including EPG @ONSfocus #ONSEconForum
  11. 11. The UK slowdown appears consumption-led, driven by the inflationary impact on real pay Source: ONS – Retail Sales 75 80 85 90 95 100 105 110 115 120 Oct-19 Feb-20 Jun-20 Oct-20 Feb-21 Jun-21 Oct-21 Feb-22 Jun-22 Oct-22 Index 2019=100 UK Retail Sales Value Volume 95 100 105 110 115 120 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan 19 = 100 Total UK Weekly Earnings Real Pay Nominal Pay Source: ONS – Average Weekly earnings @ONSfocus #ONSEconForum
  12. 12. Real incomes are forecast to fall, impacting business confidence Source: Office for Budget Responsibility -5 -3 -1 1 3 5 2000-01 2004-05 2008-09 2012-13 2016-17 2020-21 2024-25 Per cent UK real household disposable income -18 -16 -14 -12 -10 -8 -6 -4 -2 0 all Services Construction production per cent Net change, reported and expected turnover increases Oct 1st - Oct 31st Dec 1st - Dec 31st Source: ONS – BICS wave 69, ONS Calculations @ONSfocus #ONSEconForum
  13. 13. Conclusions • Inflation is forecast to peak this quarter and then fall into the new year • Interest rates have risen around the world in response to rising inflation • The UK is expected to be in recession for just over a year from 2022 Q3 • Productivity continues to act as a drag on the UK’s long-term growth prospects @ONSfocus #ONSEconForum
  14. 14. Office for National Statistics ONS plans for subnational statistics Andrea Lacey and Heledd Rees @ONSfocus #ONSEconForum
  15. 15. Contents • Strategy and workplan • Timely, granular subnational statistics and insight • Improved dissemination • ONS Devolved Liaison Offer @ONSfocus #ONSEconForum
  16. 16. Senior Subnational Data Group Strategy and workplan
  17. 17. GSS Subnational Data Strategy (December 21) A framework to guide the GSS in producing and disseminating more timely, granular and harmonised subnational statistics, that meet user needs Referenced in the Levelling Up White Paper as a key enabler in the Government’s ambition to improve subnational data and improve transparency and accountability to the public
  18. 18. GSS Subnational Data Strategy ambitions Produce more timely, granular and harmonised subnational statistics Build capability and capacity for subnational statistics and analysis Improve the dissemination of subnational statistics Explore Subnational Statistics service
  19. 19. ONS Subnational Workplan ONS committed to follow up the Strategy with a workplan Published 16 May 2022 A cross-cutting overview of the wide range of new or improved subnational outputs and initiatives, planned for the next 18 months, across the Office A strong commitment for UK-wide coverage, where possible, enabled by solid collaboration with the Devolved Administrations @ONSfocus #ONSEconForum
  20. 20. Timely, granular subnational statistics and insight @ONSfocus #ONSEconForum
  21. 21. Model-based early estimates of regional GVA • Started publishing model-based quarterly estimates of regional GVA from October 2021 onwards • Early indication of quarterly GDP, published 5 months in advance Source @ONSfocus #ONSEconForum
  22. 22. Productivity in towns and travel to work areas • Experimental labour productivity data for TTWAs and towns made available for the first time in December 2021 • Complements existing annual subregional productivity release Source @ONSfocus #ONSEconForum
  23. 23. Disaggregating annual subnational GVA to lower levels of geography • As part of the ONS strategy to provide more granular data to our users • Experimental statistics using granular geographies as building blocks to derive GVA for flexible/bespoke geographies • To gain a better understanding of hyper-local economy from both a business and household perspective, this work provides new insights in understanding regional disparities Source @ONSfocus #ONSEconForum
  24. 24. Granular Local Statistics LUSD Research and Development Subnational Trade Public Sector Finances • Best practice guidance for Government departments on collating R&D expenditure data • Regional Public Funded R&D Expenditure • Improved UK-wide regional estimates of business R&D • Published experimental data on Local Businesses that carry out international trade in services 2020 • Publish subnational TiS and TiG with 2021 data and timeseries • Experimental article on inter-regional trade • Administrative data to supplement Local Government and Public Corporations data • Analyse central and local government expenditure reported via Transparency Declarations • Explore existing DLUHC and Devolved Administrations LA level source data to supplement HMT Country Regional Analysis More accurate measurement of the impact of policy interventions to support the R&D mission. Transformation of how government departments manage their R&D data Producing more robust R&D statistics. Better understanding and insight into trade flows around the UK Supporting development of regional supply use tables in future. Better understand the distribution of public sector expenditure between local authorities Enabling better understanding of subregional differences and supporting policy interventions to reduce regional disparities. @ONSfocus #ONSEconForum
  25. 25. Housing data ONS Housing Analysis team works closely with DLUHC, the DAs and other government departments to continuously improve our publications and data availability across the UK covering • Dwelling stock • Housing affordability • Energy efficiency of housing Our statistics inform national and local policy making on housing issues, with a focus on developing measures that cover a range of aspects on housing and deliver UK-wide statistics to support understanding of housing across the UK. In 2022 we published: • Subnational dwelling stock by tenure – Improved data visuals • Housing affordability – New data visualisations • UK dwelling stock – Accessible spreadsheets • Purchase affordability – New publication • Energy efficiency of housing – Time series added, • UK house building – Local authorities added • Private rental affordability – Wales and Northern Ireland to be added (Due to publish 19 December) @ONSfocus #ONSEconForum
  26. 26. Census Maps • Census maps is an interactive tool lets you explore Census 2021 data across England and Wales at a local neighbourhood level. Output Areas is the smallest statistical geography that data are released for, with each area typically home to between 100 and 625 usual residents. • Census 2021 data have so far been released for variables on the topics of demography and migration - more topics will be added as they become available. • Supports Levelling Up by supporting local policy and decision making around planning of local services. @ONSfocus #ONSEconForum
  27. 27. Improved Dissemination 10 January 2023 @ONSfocus #ONSEconForum
  28. 28. Explore Subnational Statistics • Announced in GSS subnational data strategy • One-stop-shop for subnational data and statistics • Standardised geographies and user-defined areas • Prototyped as Subnational indicators explorer – second iteration published in May 2022, another update 1st December adding more indicators @ONSfocus #ONSEconForum
  29. 29. LUDA/X-Govt platform • Cross Govt levelling up data collaboration platform – develop suite of dashboards to support decision making across Govt.​ • Space for shared analysis and output production​. • Stores all levelling up data, including ESS data.​​ • Will allow Govt colleagues to respond rapidly to queries using available data. @ONSfocus #ONSEconForum
  30. 30. Devolved Liaison Officer for Wales 10 January 2023 @ONSfocus #ONSEconForum
  31. 31. Vision An analytical advisory service for local leaders, with dedicated analysts based across the UK, ensuring they have access to data, statistics, and analysis to support decision making Aims In development – for discussion Support users to navigate subnational data and analysis (both readily available and in development) Work with regional partners to influence ONS plans and priorities Make links between national and ONS data with local data, adding analysis for greater insight Join up geographically disparate areas with similar challenges
  32. 32. Service offer Analytical Providing data and statistical advice as well as collecting user priorities to inform ONS analysis plans Data Supporting users to navigate the data landscape, access data platforms and connecting to expert advice at ONS for specific data sets Network Hosting regular events based on analytical themes, sharing knowledge and presence within existing networks and using our political/analytical knowledge to facilitate policy making Strategic Using our unique position within central government to understand, identify, and align priorities for both local and central decision makers, alongside capturing user needs Building Capability Support, inform, and advise local colleagues on a variety of opportunities across the three pillars, with the aim of continuous development of the offer
  33. 33. Phased implementation • Support to understand and interpret datasets • Individual work plans agreed with regions • Developing collaborative analytical projects of benefit to multiple areas and regions • Support to access data platforms and existing data sources • Hosting forums to discuss cross-cutting themes • Feedback to inform wider ONS prioritisation • Dedicated ONS Local space on website • Webinars • Events • Newsletter • Evaluating stakeholder needs Stage one Stage two Stage three In development – for discussion
  34. 34. Phasing of offer Phase 1 • Early activity will be establishing themselves as the Devolved Liaison Officer (DLO) within Welsh Government, Scottish Government or NISRA, and within ONS Phase 2 • Next activity will be further relationship building with related and impactful organisations e.g. Data Cymru in Wales, NRS in Scotland Phase 3 • Operational service within whatever remit is decided in Phase 1 and 2 September 2022 to March 2023 March 2023 onwards @ONSfocus #ONSEconForum
  35. 35. Upcoming highlights @ONSfocus #ONSEconForum
  36. 36. Project Granularity Estimated Publication Quality of work in the UK: Job Quality Indicator analysis bi- and multi-variate breakdowns by devolved administration, region, city region and local authority Dec 2022 Night-time Economy National estimates and MSOA in places Jan 2023 Understanding Towns in England & Wales: Towns and Out of Towns Towns in England and Wales Jan 2023 Research & Development Regional estimates Feb 2023 Understanding Towns in England & Wales: Geographic Mobility Towns in England and Wales Mar 2023 Gross Disposable Household Income (GDHI) Components of GDHI at LSOA level End of 2023 @ONSfocus #ONSEconForum
  37. 37. How has health and labour force participation been impacted by the pandemic? Dr Brendan Collins Head of Health Economics, Advanced Analytics and Policy Modelling Welsh Government Science Evidence Advice
  38. 38. Thank you • Thank you to Alexandra Fitzpatrick, Luned Jones, and their teams for data on labour force in Wales • Thank you to Lois Griffiths and her colleagues at PHW for sharing and summarising their research • Thank you to CEDAR and Adferiad service users for long covid data
  39. 39. In this presentation • The five harms of the pandemic • People leaving the workforce due to long term sick • Looking in more detail around long covid • Possible policy responses
  40. 40. The five harms of the covid pandemic
  41. 41. Covid: a syndemic • Risk factors – clinical, behavioural, place • Neomaterial, psychosocial, cultural, power, theories of inequalities • Financial and health resilience - house, garden, car, money in the bank, stable relationship – • ‘Shadow pandemics’ hidden
  42. 42. What is happening to make people leave the workforce? Human capital Productivity Health
  43. 43. Are we seeing a crisis in terms of chronic illness causing economic inactivity?
  44. 44. Current questions 1. How many people are leaving the labour force and how much of this is due to ill health and how much is due to other factors? 2. Is this a new trend since the pandemic or a longer term trend? 3. Are these health issues likely to be directly or indirectly due to covid infection, or lack of NHS capacity (e.g. waiting lists for surgery)? 4. What is the policy response?
  45. 45. There is a dynamic relationship between wealth and health
  46. 46. Health outcomes of the pandemic in Wales • Around 11,000 covid deaths since the pandemic – mortality rates in most deprived are around twice those in least deprived • Around 7,000 excess deaths • Around 96,000 people with long covid (symptoms longer than 4 weeks) • Increased risk of health problems (particularly CVD events) in time after covid infection • Diagnosis of long term conditions has fallen since the pandemic, with the proportion of first diagnoses in hospital (rather than primary care) increasing • Elective waiting lists have increased since the pandemic (from 457k in March 2020 to 692k in February 2022)
  47. 47. Being infected multiple times with SARS-COV-2 increases the risk of other health problems
  48. 48. Intersecting risk factors for covid outcomes Hospital porter Hospital cleaner Hospital receptionist
  49. 49. OBR change in activity in UK – long term sick increasing
  50. 50. Long term sick is the biggest reason for economic inactivity in Wales 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 % Economic Inactivity by reason Student Looking after family/home Temporary sick Long-term sick Discouraged Retired Other
  51. 51. Economic inactivity due to long term illness in Wales since the pandemic is still not as high as historical rates 20.0 25.0 30.0 35.0 40.0 45.0 50.0 All persons Males
  52. 52. From IFS analysis: most people who are long term sick have been out of work for at least 5 years – might be because respondents only give one main reason for inactivity in LFS
  53. 53. PHW research on employment since the pandemic in Wales • Research from Public Health Wales on employment and health since the pandemic suggests people with health conditions are more likely to consider becoming self employed. • Older people are less likely to want to retrain or upskill. Older people with poorer health are 4 times more likely to consider retirement than healthier counterparts. • Working from home wasn’t always good for people with poor mental wellbeing or health problems; often made them worse. People with poor mental wellbeing wanted to spend less time working from home than people with better mental wellbeing. • People with poorer health were more likely to be in precarious work, and people with lower mental wellbeing more likely to experience unemployment. Seeking good work in the COVID-19 recovery by Griffiths et al. 2022 Exploring the Health Impacts and Inequalities of the New Way of Working by Griffiths et al 2022 Precarious employment and associations with health during COVID-19 by Gray et al. 2022 Characteristics of those most vulnerable to employment changes during the COVID-19 pandemic by Gray et al 2020.
  54. 54. UK labour force survey data suggests increase in ‘other’ health problems – could be partly long covid, but biggest increase was from 2019-20
  55. 55. Delving deeper into long covid in Wales • The UK has the Office for National Statistics (ONS) Covid Infection Survey that tested a random sample of households, and included questions about symptoms including long covid. • In the 4 weeks up to 4 June 2022, an estimated 96,000 people living in private households in Wales had experienced self-reported long COVID symptoms of any duration (3.0% of the population). • The estimate for those people who first had (or suspected they had) COVID-19 at least 12 weeks prior was 72,000 (2.3% of the population) and at least 12 months previously was 41,000 (1.3% of the population). • 22% of long covid suffers say it affected their daily activities ‘a lot’. • Around 2,000 people have accessed specific long covid services in Wales (‘Adferiad’ Welsh for recovery)
  56. 56. Long covid is distributed unevenly by age with the highest rates in 35-69 year olds. - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2 to 16 17 to 34 35 to 49 50 to 69 70+ Number Age group Estimated number of people with long covid in Wales by age group
  57. 57. Local data on long covid patients • We have data for around 1,100 people accessing the long covid recovery services in Wales. • There may be some double counting of individuals in these data. • These are likely to represent the more severe end of the spectrum for long covid so we cannot generalise too much. • Collected EQ-5D-5L data – Euroqol 5 dimension, 5 level – which is often used to calculate QALYs.
  58. 58. Health related quality of life in long covid patients accessing services in Wales is much lower than the general UK population 0.596 0.519 0.554 0.447 0.429 0.617 0.696 0.498 0.927 0.911 0.847 0.799 0.779 0.726 0.726 0.856 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 18 - 30 31 - 40 41 - 50 51 - 60 61 - 70 71 - 80 81 - 90 Grand Total Average EQ-5D Index Score Age Groups average long covid lowest popn norm 1 =Full health
  59. 59. Most significant factors in regression of symptoms and characteristics of population and EQ-5D index scores • Strongest relationship with EQ-5D index scores (poorer health) • Depression/anxiety • Fatigue • Chest pain • Long term sick • Disabled • Smaller but still significant effects • Shortness of breath, chest pain, loss of appetite, pins and needles, joint pain, covid hospital admission, tinnitus, nausea, age. (Cough actually associated with better health).
  60. 60. Even if long covid patients’ health was lower than the general population before covid, they have still likely lost some QALYs from long covid Duration of health loss Assumed health status before long covid Same as general population 20% lower than general population QALYs lost Value of QALYs lost QALYs lost Value of QALYs lost 3 months 0.088 £6,193 0.046 £3,197 6 months 0.177 £12,385 0.091 £6,393 9 months 0.265 £18,578 0.137 £9,590 12 months 0.354 £24,770 0.183 £12,786
  61. 61. Summary • People leaving the workforce due to long term sick is increasing in the UK and in Wales • We don’t know how much is due to increased risk of health problems after covid, long covid, or waiting for NHS care • Long covid does cause significant health deficits in a proportion of the population
  62. 62. Possible policy responses -1 • Focus on employers and good, fair work – for instance social care real living wage • Impacts of Brexit, changes in fertility patterns on future population • Consider impacts of cost of living crisis on health and work choices • Focus on musculoskeletal conditions and mental health conditions • NHS waiting lists • Methods like distributional cost effectiveness analysis to balance value for money and equity impacts • Need to think about how the public sector promote health among staff.
  63. 63. Possible policy responses -2 • Need to promote healthy behaviours at stress points in people’s lives – being made redundant, relationship breakdown, bereavement etc • Social wage – early years education, free school meals, free prescriptions, council tax benefit, etc • Focus on foundational economy and sustainability • Reduce economic and health inequalities – increase financial and health literacy starting with school • Policy interventions to improve health, promote physical activity, healthy food systems
  64. 64. Thank you • Brendan Collins
  65. 65. Strength in Places Fund Different inward investment models in the local economy: Some insights from the Compound Semiconductor Sector Professor Max Munday, Professor Rob Huggins, Dr A Roberts, Dr W Cai. Welsh Economy Research Unit, Cardiff Business School, Social Science Research Park (SPARK)
  66. 66. High level outline  A long history of debates on the transformative role or otherwise of inward investment in the regional economy.  Some of this has been ‘fought’ out in the context of historical inward investment success in Wales.  Wales and the CS cluster might be a valuable contemporary lens through which to explore the regional transformative benefits or otherwise of inward investment.  Are there selected characteristics of the CS cluster firms which differentiate them from other parts of the inward investment sector in Wales?  Might this group of inward investors might yield transformative change for Wales?
  67. 67. Wales inward investment success 1984-2007 1,446 acquisition, expansion, joint venture and new projects £13,566m of investment 99,691 planned new jobs 70,927 safeguarded jobs Some history: Wales had a period of strong success in attracting inward investment….. Sample (Ownership / Business Structure Classification) 1977 1986 1997 2003 Plants (N) Emp. Mean Emp Plants (N) Emp. Mean Emp Plants (N) Emp. Mean Emp Plants (N) Emp. Mean Emp Domestic plants 2,561 223,685 87.3 2,169 136,721 63.0 1,693 124,756 73.7 1,339 99,042 74.0 E.U. 90 28,557 317.3 128 20,151 157.4 136 20,584 151.4 110 17,421 158.4 Non-E.U.Europe .. .. .. 15 1,525 101.7 20 2,112 105.6 15 1,935 129.0 North America 122 48,216 395.2 150 36,172 241.1 158 33,752 213.6 136 28,849 212.1 Asia .. .. .. 19 7,098 373.6 43 17,391 404.4 39 12,287 315.1 Foreign owned plants 251 85,161 339.3 336 66,341 197.4 375 75,540 201.4 315 62,400 198.1 Foreign/ All (%) 8.9 27.6 13.4 32.7 18.1 37.7 18.4 37.7 All 2,812 308,846 109.8 2,505 203,062 81.1 2,072 200,323 96.7 1,713 165,484 96.6 Source: McNabb and Munday, 2017 Plants and Employment by Ownership and Business Structure, Wales, Selected Years But how successful has inward investment been in transforming the Welsh economy?
  68. 68. Inward investment into the Welsh economy: rehearsing the debate? Employment creation Improvements to Welsh productivity – the batting average effect Supply chain effects in Wales; regional multiplier effects Demonstration effects, industrial relations, HRM methods New production methods introduced Trade effects through increased exports Advertising effects for the region Concerns on low levels of BERD Concerns on low levels of embeddedness and low levels of linkages with local firms Concerns of reported performance Production-only orientation Limited decision making autonomy and functional diversity Crowding out effects with respect to indigenous enterprise Long term stability and transformational capacity. Does inward investment by the CS cluster have different characteristics to much that has gone before with beneficial local economic impacts.
  69. 69. Moving towards knowledge-based inward investment? The PAST! Inward investment policy based on pragmatic attractions such as financial incentives, ample land availability, and a sound infrastructure with competitively priced labour. The NOW! The challenge for economically disadvantaged regional economies is to formulate the conditions both for retaining home-grown companies and for encouraging inward investors to choose their nation as a home for knowledge-intensive industries. Under the new environment, the primary goal and means of inward investment attraction is based more on the creation of knowledge spillovers, such as the transfer of new skills, science, and management techniques. Policy? Needs to reflect far more on whether assistance offered to inward investors should be better connected to the expected level of benefits. Policy actors need to look more at inward investment motivations, the expected levels of earnings and productivity growth, and the stage of the life cycle reached by industry products etc Policy steered more towards inward investors who bring HQ-type functions, and with the lack of higher order management and research functions in Welsh manufacturing working to worsen problems of a low skills equilibrium
  70. 70. Does the CS cluster in Wales measure up? What is produced? Why is ‘it’ produced in Wales? How well is the cluster embedded in the local economy? Research has tried to investigate how far the CS cluster of firms might represent a different model of inward investment. Cardiff and Swansea University Compound Semiconductor Centre CSA Applications Catapult Nexperia, Microchip, Microlink, Rockley, IQE, SPTS Direct activity supported in Wales by operations Estimated 1,600 FTE jobs Estimated £194m GVA + Indirect supported by wages spending and local Wales purchases Estimated 2,390 FTE jobs Estimated £277m GVA
  71. 71. CS cluster how does it measure up?? Early doors but…. Figure 5 CScluster local economic effects checklist Potential effects Nature of effects CS cluster in Wales? General productivity spillovers Role of inward investment in technical change and progress and domestic sector productivity growth Potentially strong in terms of involvement in cutting edge technology and shown to be a highly productive sector in Wales. General competition effects Inward investment role in breaking down monopolies in host economy, competition effects. CS cluster has no explicit competition within Wales and markets are international. Limited displacement of any domestic or regional capacity. Trade effects Impacts on export and imports, more general balance of payments effects. Strong impact on regional export activity and offers diversity of export locations away from EU. Buyer-supplier and value chain effects Issues of embeddedness. Indirect economic impacts on regional supply chains. Demonstration effects to suppliers in terms of operational techniques and links to increased productivity. Limited backward supply chain links currently into Welsh economy but CSconnected seeking to expedite this issue, particularly in terms of linkages between the investors. Employment effects Effects in terms of direct and indirect employment creation, and the employment contribution in different industries. CS cluster supports jobs directly and indirectly in the Welsh economy (c.2,400 jobs) through wage and procurement effects. Also extensive activity in terms of developing local skills supply side. Industrial relations effects Inward investing firms promoting novel IR practices, and extent to which demonstration of new practices spill-over to domestic firms and other institutions CS cluster firms among industrial leaders in terms of IRpractices. HRM and operational management practice effects Presence of different operational and HRM practices in the inward investment sector, and extent to which demonstration of practices spills-over to the extant firms in the economy CS cluster firms strong in terms of application of advanced manufacturing technology and robotics. Research intensive cluster allowing entrants to work from initial product research through to manufacture Networked supply chain featuring new materials processing and research and device production Productive labour force , and skills supply side continually developing IP protections for new products and processes Proximity to high quality university research and postgraduate expertise Institutional support from CSA Catapult, CISM and ICS Institutional support from Welsh Government, Cardiff Capital Region Pull factors for inward investment HQ effects might be important
  72. 72. Conclusions – watch this space?  How far growth in inward investment feeds through to new entrepreneurship in Wales in the form of spin-off firms from the main cluster, and how far new business opportunities result from spin-offs from the higher education sector.  The role of CS inward investment in creating productivity spillovers in other Welsh industries, particularly those with whom the cluster trades locally.  The longer term effects of the inward investment on the supply and demand side for specialised labour in the compound semiconductor space. “The CS cluster case appears to stand out as an instance of a more disadvantaged regional economy starting on the process of strengthening the conditions to support manufacturing investors to choose a location for knowledge and technology reasons over and above more basic reasons of factor costs and market access.”
  73. 73. Closing remarks Sonia Carrera Deputy Director Office for National Statistics @ONSfocus #ONSEconForum
  74. 74. Dates for your diary 19 December 2022 – ONS Economic Forum Presentations include • State of the UK Economy • Where Have the Workers Gone? Movements to Inactivity in the UK: 2019-2022 • Over 50s lifestyle study • Job quality in the UK Further details on the above event and any upcoming events will be published at @ONSfocus #ONSEconForum
  75. 75. Thank you for attending the Economic Forum You can keep up to date on all upcoming events via If you would like to ask a question or provide any feedback, please do so via

Editor's Notes

  • We will be using the first portion of this presentation to cover the strategic thinking that is underpinning our future plans for subnational, before going into a bit more detail around a couple of our ambitions; the first being about producing more timely and granular subnational statistics, and the second on how we’re looking to improve their dissemination.
  • The GSS Subnational Data Strategy provides a framework to guide the GSS in producing and disseminating more timely, granular and harmonised subnational statistics.
    The Strategy sets out how we can achieve this aim by showcasing best practice and case studies, while signposting to existing GSS policies and guidance.
    The Strategy was launched in December at the Economic Forum. On the same day our division also published an article on the industry structure of towns and the first experimental GVA estimates at MSOA level.

    GSS subnational data strategy launched at ONS Economic Forum in December 2021 by Sam Beckett, alongside article on the industry structure of towns and first experimental GVA estimates at MSOA (and LSOA level through SRS)

    For the purposes of this strategy, ‘subnational’ refers to all data and statistics that are provided for the 12 International Territorial Level 1 (ITL1) areas in the UK, which include Northern Ireland, Scotland, Wales, and the nine English regions, and for lower-level geographies.

  • The Strategy identifies three overarching ambitions which should guide us all when working with subnational statistics.
    The first ambition is to produce more timely, granular and harmonised subnational statistics, aiming for subnational by default.
    The second ambition focusses on building capability and capacity for subnational statistics and analysis by improving the way we share data, methods and expertise. 
    The third ambition is to improve the dissemination of subnational statistics so that our users can draw insights from our outputs more efficiently.
    Together, these three ambitions set out a vision for the creation of a single service for the dissemination of subnational data and statistics organised by standardised geographies and able to accommodate flexible user-defined areas. We like to think of this as the Explore Subnational Statistics service.
  • See content on slide but mention the sentence below if appropriate:

    The publication of this ONS subnational workplan will set a virtuous precedent and encourage other Departments to think about their own workplans through the Strategy’s ambitions lens.
  • I will now go into a bit more detail on the first ambition of the GSS subnational data strategy, highlighting some of the work we’ve been doing which contributes to this space.
  • We understand that timeliness is really important for our users, and this was also a key theme in the Bean review for Economic Statistics.
    Off the back off this, ESCoE developed new econometric methods to improve the timeliness and frequency of regional economic growth estimates in the UK.
    These model-based early estimates of regional GVA have now transitioned to the ONS, and we started publishing them in October last year
    The main strength of these estimates is timeliness – we are able to publish them to approximately the same timetable as the UK first estimate of GDP
  • Next I’d like to highlight our output on productivity in towns and travel to work areas
    These are experimental statistics that we published for the first time last December, with the most recent output released in March
    These data complement the existing annual labour productivity estimates produced for local authorities, combined authorities and ITL areas in our annual subregional productivity release
    In particular, this output aligns with our aim to publish more granular statistics – by using the TTWA geography, we can explore labour productivity for areas where most people both live and work
  • In December last year, we published experimental statistics on GVA at a lower level of geography, down to MSOA level, by using LSOA data as “building blocks” to create these breakdowns.
    For example, here we have a map looking at the West Midlands Metro region, where a new geography has been defined covering all the LSOAs that the metro line passes through, enabling us to analyse an area with no defined boundary.
    All this work feeds into the vision for Explore Subnational Statistics, which will have the flexibility to accommodate user-defined areas.
  • R&D
    What: We are publishing improved UK-wide regional estimates of business R&D statistics and public funded R&D, producing new breakdowns at levels not covered before (ITL2 level and below)
    provides an accurate baseline for the LU mission and improves data at a regional level to enable more accurate measurement of the impact of policy interventions to support the R&D mission.
    Provides valuable feedback to be considered in the transformation of R&D surveys and how government departments manage their R&D data
    Subsequently improving the accuracy of responses to GoVERD and therefore producing more robust R&D statistics.

    What: Published experimental data on Local Businesses that carry out international trade in services 2020, subnational Trade in Services and Trade in Goods with 2021 data and timeseries, experimental article on inter-regional trade
    Why: Better understanding and insight into trade flows around the UK, helping to understand intermediate consumption, which is a requirement for regional supply use tables to be able to be developed in future. 

    What: ONS are seeking to address a longstanding data gap, which covers local level information about Public sector receipts, expenditure and borrowing.
    Why: These workstreams will assess the feasibility of a local authority level view of the public finances to provide key input for debates about levelling up and spatial inequalities. These statistics will be informative for policy makers, will clarify broader economic debates and discussions and will join up developments that we observe in other economic statistics with those in the public finances. 

  • Housing, of course, is incredibly important at both the local and national level, and we support this agenda by producing a range of statistics and analysis on housing affordability, energy efficiency of housing, and pulling together UK statistics from the devolved administrations.

    Wherever possible we publish at the most local level we can, including at MSOA level for energy efficiency of housing as shown here. Over the last year we have made huge strides in improving the range and depth of our statistics, particularly to help understand housing affordability.

    We are also currently finalising analysis for the 2021 Census housing topic summary due to be published on 5 January 2023. Which links us nicely on to….
  • The Census

    We couldn’t talk about ONS’s subnational outputs without mentioning the incredible work that is the Census.

    Innovative new products are being produced to aid with analysis, particular at a local level. These include interactive Census maps, which will allow you to choose from a range of variables and see, at a glance, patterns across the country or within a local area. I’m sure lots of us have also played the game where you have to pass from one place to another in the style of higher or lower/Play your cards right

    More options and data will be added to the maps as each topic summary is released over the next few weeks into early 2023, but that is just the start with more data and analysis planned for release through to 2024.
  • Now I’d like to talk about the work we’re doing to improve the dissemination of more timely and granular subnational statistics
  • First announced as part of the GSS subnational data strategy last December
    Bringing together the 3 ambitions of the strategy to produce and disseminate more timely, granular, and harmonised subnational data and statistics
    Single service for the dissemination of subnational statistics and analysis
    Organised by standardised geographies and able to accommodate user-defined areas
    First prototype (Subnational Indicators Explorer) published in Spring alongside the Levelling Up white paper, with a second iteration published last month to add 2 new metrics and more data to the accompanying datasets. Planning to have more iterations of the explorer published later this year, still open to feedback which can be submitted via the website
  • Our overarching vision behind ONS Local is to create a analytical advisory service for local leaders, that ensures they have access to the data and insight they need to make decisions and have impact
    The aims of this service would be 4 fold. 
    1.The first is about access to data -  We know the data landscape can be challenging to navigate with similar measures and redeveloped measures. Our role would be to support people in finding and using the most appropriate data for their needs. 
    2. The second is about influencing ONS and wider Govt depts plans and priorities. There are some issues that we can predict interest in because they have a national presence, e.g. Cost of Living. There are others however that might be of interest to a specific number of regions or issues that have different implications regionally that we can better understand and feed into plans with.
    3. The third is about making better links between national and local data. There is more we can do to improve access to national data and also bring local data into the ONS for wider use. 
    4. And lastly there is the opportunity to bring different areas together with similar challenges. For instance, we’ve already done work with coastal towns and there could be similar opportunities to bring areas together to learn and collaborate with each other on different topics.

  • 3 key pillars to our service offer

    The first part of our offer is analytical – in the early days this will probably look like providing advice around data and methodologies but eventually we could start to scope and support projects that will provide statistical insights and build wider analytical capability across local areas.

    On data, we will pursue a two way relationship where local government are supported in accessing the central government datasets they need, whilst also understanding where local data can be used centrally.

    3. On network – we want to complement existing local networks by sharing events and knowledge as well using our political and analytical knowledge to support decision making. 

    Across the piece:
    The strategic element is more of a cross-cutting theme for this service. We’ll use our position within central government to connect local and central decision makers, ensuring that analytical requirements are shared in both directions.  
    We understand that different areas will have different needs depending on resource and data capability, so we will aim to scale each of these strands up or down depending on where we’re working 

  • With recruitment on-going what I would like to emphasis today is what you'll likely notice therefore is a phased implementation of the service. 
    The first stage will see us rolling out some vital infrastructure in terms of webinars, events and a newsletter, as well as starting to get to know our stakeholders and finding out what they need. (similar to as what we are doing here today). We have already hosted two webinars which some of you may have already attended, one on the Health Index, and another showcasing Greater Manchester Combined Authority's Cost of Living dashboard

    Next, we’ll start to provide more technical expertise like supporting access to data and hosting forums on cross-cutting themes. We’ll also start to feed back into the wider ONS prioritisation and hopefully create a dedicated space on the website that can be an entry point for engaging with us. 

    Finally, we aim to start agreeing workplans with regions or developing collaborative analytical projects. 

  • As if this wasn’t all enough, we have more coming.
  • I’ve already mentioned some of these, but we have a huge array coming out:
    Job quality indicators in the UK: Last published in 2018 and this is an update but with additional indicators to paint a holistic picture. New indicators include work-life balance, terms of employment, job design & nature of work, voice & representation, workplace injury & illness, in addition to the old ones (low pay, satisfactory hours, desired contracts)
    Night time economy (NTE) – insights into activities which take place between 6pm  6am (“the night”) across the UK. This will look at how NTE has changed over the past 10 years, including a focus on the pandemic. Will include insights on (a) NTE workers (how many people, demographic, earnings, changes across time) (b) NTE businesses IDBR (how many workplaces, where are they concentrated, changes across time) (c) NTE People (where and on what do people spend money on during the right, how have people’s movements changed during the night, what was impact of pandemic)
    Towns and out of towns I’ve already mentioned with the publication focusing on employment growth outside towns & cities, as well as employment changes by distances such as town/city finger or rural areas, by industry and classification of workplace zones
    R&D I’ve also briefly touched on with Regional Public Funded R&D Expenditure. We’ve acquired microdata on R&D expenditure from BEIS, DHSC & MoD (the three departments with the largest R&D expenditure), and, from this we have created regional estimates for each department’s R&D expenditure.
    Geographic mobility is an ONS & HMT collaboration using the Longitudinal Education Outcomes data (LEO) to investigate the effect of place characteristics on geographic mobility across Towns and Cities, and to study the effect that different levels of mobility geographic have on the individuals and their outcomes.  Incl: understand drivers of mobility & effect of mobility on wages; create educational profiles for towns & cities in England; understand role of places on geographic mobility of grads & non-grads.
    Gross Domestic Household Income is rather like our improvements in GVA, in that we will improve the geographic granularity of GDHI down to LSOA, with the aim of providing building block time series data for the income components, to construct estimates for aggregates for a range of bespoke geographic areas.
  • The dynamic relationship between health and productivity
    There is a plethora of evidence around the relationship between health and productivity at an individual and at a population level.
    The relationship between health and productivity can be interrupted by health shocks, and by workplace factors such as jobs being poorly paid, physically dangerous, or too boring or too demanding. Or if people are healthy but cannot find jobs this may cause them to slide into depression or risky behaviours.
    If we think about people having ‘stocks of health’ then if people get to age 40-50 and have a lot of metabolic risk factors like high blood pressure, high blood sugar, cholesterol, and behavioural risks like smoking, excess alcohol etc, their health stocks are already partly depleted. It can be difficult to make a difference that will return these individuals to their full health and productivity potential, so we need to move the focus back to earlier in people’s lives – primordial prevention or preventing risk factors before they occur. But this also means we must be realistic with our expectations of how quickly health interventions can improve productivity.
    A lot of research around health and productivity seems to assume that the relationship is unidirectional (health causes productivity), linear, and instantaneous (an improvement in health will instantly improve productivity). However this is clearly not the case, and while the relationship between health and productivity is really important, this kind of theoretical reduction would not be seen as appropriate for other relationships like the relationship between smoking and health where we know there are dose-response relationships, that there are time lags, and that the relationship is mediated by other exposures – for instance oesophageal cancer most common in heavy drinkers who smoke
  • Bowe B, Xie Y, Al-Aly Z. Acute and post-acute sequelae associated with SARS-CoV-2 reinfection. Nature Medicine. Nov. 10, 2022. DOI:
  • Is worsening health leading to more older workers quitting work, driving up rates of economic inactivity? | Institute for Fiscal Studies (

  • Prevalence of ongoing symptoms following coronavirus (COVID-19) infection in the UK: 7 July 2022
    Wales population mid-year estimate - Office for National Statistics (
  • Strongest relationship – adjusted coefficient 0.1 or above
    Note there was some overlap between long term sick and disabled but a lot of people ticked one or the other and both were highly significant