New research identifies the ‘Productivity Heroes’ driving growth, jobs and stronger economic performance in Wales
More than 1,700 Welsh businesses have been identified as ‘Productivity Heroes’, demonstrating that higher productivity and job creation can go hand in hand, according to new research published by Economic Intelligence Wales (EIW).
Launched today (Wednesday September 23) at a breakfast briefing co-hosted by the Federation of Small Businesses (FSB) Wales, the report, Productivity Heroes in Wales: who they are and why they matter, sets out the main characteristics of some of Wales’s highest-performing small and medium-sized businesses. It also shows how targeted investment, strong leadership and effective business support can help unlock stronger economic growth across Wales.
The report found 1,732 ‘Productivity Heroes’ across Wales in 2024-25. Together, these businesses generated £6.04bn in turnover and created more than 5,200 jobs, demonstrating that businesses can improve productivity while continuing to grow employment. The findings offer practical insight for policymakers and delivery partners seeking to target support where it can have the greatest impact.
While the number of Productivity Heroes has fallen since a peak in 2022-23, the businesses that remain are becoming increasingly productive, the report shows. Labour productivity increased by some 24 per cent, rising from approximately £133,000 per employee to almost £165,000.
The report highlights that Productivity Heroes are not confined to high-tech or knowledge-intensive industries. These businesses are found across manufacturing, construction, professional services, wholesale, hospitality and other sectors. Regardless of sector, the report finds that the most successful businesses consistently invest in three areas: a strong customer focus; developing people through leadership and skills; and embracing innovation and digital adoption.
The research also argues that identifying businesses through the Productivity Hero framework provides a more meaningful understanding of economic performance than measuring turnover or employment growth in isolation. By identifying firms that are simultaneously growing turnover, employment and productivity, it offers a stronger evidence base to help inform future policy, investment and business support in Wales.
Swansea-based Zeal Innovation, trading as LITELOK, is one example of the productivity-led growth highlighted in the report. The Development Bank-backed company designs and manufactures possibly the most secure, high-security, grinder-resistant locks for bicycles and motorcycles. Since 2017, it has grown turnover per full-time employee from around £45,000 to around £350,000, with annual revenues now approaching £10m. Its growth demonstrates how innovation, investment and a strong product focus can help Welsh businesses scale while becoming more productive.
Opening the event, Adam Price, cabinet minister for enterprise, connectivity and energy, said: “This research shows that Wales already has the businesses, ideas and ambition needed to build a stronger, more productive economy. Our national productivity mission is about backing that potential and turning it into higher pay, stronger firms and better opportunities in every part of Wales.
“The message from these businesses is clear: with the right support for skills, leadership and innovation, more Welsh firms can grow, create jobs and become more productive. Our new national development agency will be central to making that support simpler, sharper and more effective.”
Speaking at the event, Professor Melanie Jones, Professor of Economics at Cardiff Business School and Academic Lead for the Wales Productivity Forum said: “Productivity growth is critical to improving the things people care about including real wage growth, business profitability, and public service delivery. Narrowing the existing and persistent 15% productivity gap between Wales and the rest of the UK will require a step change in Wales’ productivity growth. Events like this which support understanding and sharing best practice about the drivers of productivity growth among firms in Wales and collaboration between policymakers and business leaders are key to achieving this.”
Professor Mark Hart, deputy director of the Enterprise Research Centre, and lead author of the report, said: “Productivity Heroes demonstrate that businesses do not have to choose between creating jobs and improving productivity. These firms are successfully achieving both, making them important to Wales’s long-term economic performance. Better understanding what they are doing well can help create more of them.
“Our research shows that the strongest-performing businesses invest just as much in leadership, workforce development and organisational culture as they do in innovation. By understanding what sets these firms apart, we can better identify the practical support that enables more businesses to grow, improve productivity and create sustainable employment.”
John Hurst, chair of FSB Wales said: “As small business owners, action on productivity needs to be practical, accessible and reflect the day-to-day realities of starting and growing a business. Real progress means creating an environment that supports investment and giving founders the know-how to unlock extra value from what we already have, whether that’s adopting new tech, rethinking how we use skills within the business, or making better use of our space.
“Proposals for a new development agency offer a vital chance to cut through a fragmented system and deliver the direct, grounded support that delivers successful Welsh firms.”
Giles Thorley, chief executive of the Development Bank of Wales, said: “This research provides valuable evidence about the businesses helping to strengthen Wales’s economy and, crucially, what enables them to succeed.
“As a trusted delivery partner, our role is to turn that evidence into practical support. Working alongside Welsh government, we can help ensure ambitious businesses have access to the finance, leadership support and investment they need to improve productivity, retain value in Wales and create long-term economic impact.
“The Productivity Hero framework gives us a clearer understanding of where support can have the greatest impact, helping us translate evidence into practical action that builds a stronger, more productive Welsh economy.”
The report concludes that Wales can create more Productivity Heroes through targeted support focused on leadership, skills, finance, innovation and infrastructure, helping more businesses improve productivity while continuing to create jobs.
Economic Intelligence Wales is a collaboration between the Development Bank of Wales, the Enterprise Research Centre at Warwick Business School, Cardiff Business School, Bangor Business School and the Office for National Statistics. It provides independent economic intelligence to help improve understanding of the Welsh economy and support evidence-led decision making.
The full Productivity Heroes in Wales report is available at: https://developmentbank.wales/productivity-heroes-wales-who-they-are-and-why-they-matter