Overview 

Miller Research was commissioned by the Welsh Government to deliver a comprehensive analysis of Wales’ services sector, with a particular focus on its tradeable component, services that can be sold beyond Wales and contribute directly to exports and economic growth. 

The services sector is the backbone of the Welsh economy, accounting for around 80% of employment and approximately 73% of Gross Value Added (GVA). Despite this, there has historically been limited understanding of the sector’s tradeable potential, particularly in relation to exports, productivity, and its role within global value chains. 

This study addressed a critical evidence gap by providing a robust, data-driven assessment of the size, structure, and performance of Wales’ tradeable services sector. It also explored how services underpin wider economic activity, including their growing role within manufacturing through “embedded” or Mode 5 services, and identified opportunities to strengthen Wales’ competitiveness in an increasingly global and digital economy . 

Our Approach 

We adopted a rigorous mixed-methods approach, combining quantitative analysis with in-depth stakeholder engagement. 

Our methodology included: 

• Large-scale data analysis of over 73,000 Welsh service sector businesses using Companies House and proprietary datasets  
• Review of global, UK, and Welsh policy and economic literature  
• Stakeholder engagement, including 18 interviews with businesses, policymakers, and sector representatives  
• A targeted business survey (55 responses) to capture real-world insights  
• GIS mapping to analyse spatial distribution and regional clustering of service activities  
• Development of a bespoke analytical framework to triangulate data and address gaps in official statistics. 

This approach enabled us to build one of the most comprehensive evidence bases on Wales’ services sector to date. 

Key Insights 

The research highlighted several important findings: 

• The Welsh services sector dominates the economy but underperforms relative to other UK regions in productivity and export intensity  
• Around 60% of service sector employment has the potential to be tradeable, representing a significant untapped opportunity  
• Key high-value sub-sectors include:  
• Financial and insurance services  
• Professional and business services  
• Creative and digital industries  
• IT and technology  
• Wales has a comparative strength in services embedded within manufacturing (Mode 5), particularly in sectors such as transport equipment  
• Structural challenges include:  
• Skills and talent retention  
• Digital infrastructure gaps  
• Limited scale and clustering in some sub-sectors  
• Data limitations constraining policy design  

Key Outputs 

The project delivered a comprehensive research report providing: 

• A detailed profile of Wales’ services sector, including scale, composition, and economic contribution  
• Identification and analysis of key tradeable service sub-sectors  
• A bespoke database of Welsh service businesses  
• Spatial mapping of sector activity and regional clusters  
• An innovative assessment of Mode 5 services and their contribution to exports  
• A set of evidence-based policy recommendations to support sector growth  

Impact and Outcomes 

This study provided a critical evidence base for Welsh Government economic policy, supporting: 

• More targeted interventions to grow high-value service sectors  
• Improved understanding of export potential and international competitiveness  
• Better integration of services into industrial and trade policy  
• Recognition of the role of services in supporting manufacturing and innovation  

By addressing longstanding data gaps and providing a forward-looking analysis, the project supports the development of a more productive, export-oriented, and resilient Welsh economy.