Wales has recently been fortunate enough to have battery firm GS Yuasa create over 100 jobs with 360 more protected in the town of Ebbw Vale as the battery producer has recently set up a factory within the local region.
This job creation has been sourced from a £2.5 million fund from the Welsh government which has increased the operating budget of the firm, thus enabling them to raise their factor inputs by employing new workers such as highly paid engineers.
This will increase employment in the local area within Wales which is significant as newly employed, highly paid engineers will have the pleasure of spending their newly earned disposable incomes on luxury goods and services such as foreign holidays which can be used to raise their standard of living as these engineers will be able to enjoy relaxing holidays within expensive resorts.
Furthermore, these disposable incomes can also be spent within the UK, thus helping to achieve a multiplier effect as firms upscale their factors of production as they are incentivised and signalled to produce more due to a price increase attributed to rising demand as incomes have risen.
However, if these engineers do decide to spend their incomes on foreign holidays, the relaxation which they will receive from these holidays will enable them to return to work more productive.
This means that the firm will be able to output more batteries as well as increasing energy efficiency as some of the cash was likely invested into new technology and capital to ensure that the law of diminishing marginal utility is minimised as an increase in the labour force requires an increased investment in capital.
This capital investment has resulted in the construction of a new lithium-ion battery production line designed to prepare the local region for an increasingly environmentally aware future.
Demand for lithium-ion batteries is likely to increase in the future due to their significance in electric car production, which is also being incentivised within the UK as the banning of the sale of new petrol and diesel cars mean that producers of traditional cars will lose out on significant revenue.
This is because other firms within the market who are transitioning towards electric car production, such as General Motors, will be able to make advancements within the industry to the point that electric cars become a no brainer for UK consumers.
Consequently, if more firms are entering the market for electric vehicles, lithium-ion batteries, a key component, are also going to be in demand, thus making them a great good to produce within the Welsh economy.
Excess battery production from this specialised region can also be sold overseas helping the Welsh economy increase its value of exports.
At the same time, the benefits of providing lithium batteries do not stop there as they can be used in part with current renewable energy infrastructures such as wind power and solar power, which are heavily reliant on weather patterns, to ensure that power can be stored as to prevent power outages during turbulent weather periods.
This will enable the new style of batteries to be used in sectors of the economy where we cannot afford powercuts, such as hospital operating theatres, telecommunications and data servers.
Although this can be achieved through providing energy via traditional methods such as coal powerplants, this green alternative is much better for the economy as it decreases the external costs associated with energy provision as making renewable power more available reduces carbon emissions.
Consequently, a reduction in carbon emissions increases air quality which reduces the number of hospitalizations which is significant because the NHS is currently experiencing a severe shortage of resources with 5.1 million outstanding patients waiting for treatment.
This means that an increase in air quality will decrease these poor air quality-related illnesses, thus decreasing demand for the NHS and leading to alleviated pressure.
Therefore, this will decrease waiting times for the third party, a benefit as they can take less time off work thus increasing the chance of promotion yielding a better quality of life as job satisfaction increases.
The new assembly line will be installed and some key areas will be automated, with the new jobs coming in the next "three to five years," Yuasa stated in a BBC article.
"Over the last few years we've seen the demand in data servers across Europe growing and growing and we need to increase capacity in this plant.
Overall the decision for Yuasa to invest in Wales is warmly welcomed due to the various listed benefits and due to the fact that the firm is a hugely important employer in Ebbw Vale.
Written by Hubert Kucharski