Adam Price and Nigel Copner argue that investing in the Circuit of Wales project could be a strategic bet for Wales.

We Welsh have the habit of being the nearly men and women of economic opportunity.

The first hydrogen fuel cell, steam locomotive, and yes, first Dyson prototype, were all built here – but the opportunity to cash in all went begging. The difficult geology of the south Wales coalfield made it a test-bed of innovation in coal-cutting technology. But the National Coal Board gave away the knowledge for free to engineering companies based in the Midlands.

When we realised that there wasn’t much future in digging things out of the ground, we adopted the textbook economic strategy that pretty much everywhere else adopted – investing in things like roads, advance factories and offering grants to make ourselves attractive to footloose foreign firms. This is often called the “Field of Dreams” approach to economic development after the Kevin Costner film in which a sports-mad farmer builds a baseball pitch in an Iowa cornfield.

Superficially, the proposal to build a world class racing track on heathland above Ebbw Vale sounds every bit as speculative. Build it and they will come is the mantra (and in the famous case of that LG factory down the road, of course, they didn’t).

In fact, the Circuit of Wales turns everything we have done for the last fifty years on its head. Until now, we have been all Field and no Dream, focusing on what economists call the supply-side (the Heads of the Valleys Road, for example, and the massive investment in skills at Ebbw Vale’s The Works) with no clear idea about where the demand for those skills or that infrastructure would come from in the future.

A demand-side strategy, by contrast, deals not in generalities but in specifics. In which particular markets are there opportunities for us as a country and what do we need to do to make it happen? The Circuit of Wales spotted the gap – the fact that the UK lacks a modern, purpose-built, world class motor sport facility – and saw an opportunity to leverage our existing strengths in the automotive industry, our good transport connectivity and home-grown motor sport tradition (bikes and cross-country rallying) to build a new home for a high-end engineering cluster with the circuit at its centre, a vast open air show-room that doubles up as test-rig.

The prize in economic terms is potentially transformational. At over £430m, if it gets the go-ahead it will be the biggest ever development project in Wales that is 100% led and funded by the private sector (the Welsh Government stands to completely recoup the seedcorn support it has provided initially by year three of operations).

Private sector-led is not a phrase that often pops up in the Welsh economic lexicon and it has been refreshing to see recognition of this opportunity and positivity for the project and its exciting consequences for Gwent in the pages of the South Wales Argus. However, it may perplex all of those who’ve read elsewhere all the headlines about the “waste” of public money. To get Aviva – one of Britain’s largest institutional investors – to show any interest in the south Wales valleys is more than a coup; at this massive scale it is nothing short of miraculous. The fact that Kleinwort Benson are also on board shows the highest level of confidence in private investment appetite for the project.

Of course, a lot of confusion has been created by talk of a Government guarantee, a sort of repayment insurance for investors. This approach to infrastructure investment is an essential part of the economic armoury of governments worldwide. It’s how Birmingham built the NEC and how the UK Government plans to kick-start about £40 billion of infrastructure investment between now and 2021. It’s a tool the Welsh Government has used itself (though usually under the cloak of commercial confidentiality) – and it’s absolutely crucial in getting investors to consider “non-traditional” areas i.e. anywhere outside the M25. Compared to the UK scheme, which is very generous to lenders, the Circuit of Wales deal has limited exposure: with only 50% of annual repayments covered and none of the construction risk, in return for an annual fee repaid to the public purse.

Let’s be clear about one thing. The Circuit of Wales is a strategic bet about a possible future, and there are limits to the number of these we can make at any one time. But all the due diligence conducted by investors and the Government’s own advisers have, to my knowledge, confirmed the strength of the underlying business model. Jaguar Land Rovers’ attempt to buy the ailing Silverstone Circuit as a test-track for customers – before having to back out after opposition from Porsche that also have a driving centre on site – shows the level of interest among motor manufacturers in this kind of facility, even when it’s a converted World War II airfield.

TVR has confirmed the circuit was critical to their decision to lay down roots in Wales, and Aston Martin are rumoured to be seeking a presence on site. As rural Northamptonshire’s great chain of motorsport companies, snaking its way from Silverstone itself through to neighbouring Oxfordshire demonstrates, it’s proximity to a circuit that makes the difference. Indeed, MEPC’s new business and technology park built on land adjacent to the track is already 50% pre-committed. Motorsport is the car industry’s laboratory and circuits are their workbench.

Of course, the biggest prize of all is Formula 1. Silverstone, having narrowly secured the rights to the British Grand Prix until 2026, is struggling to meet its fees to Bernie Ecclestone’s Formula One Group, hampered by the fact that it’s about the only Circuit in the world that gets no government contribution whatsoever. Ecclestone could break the contract at any time, which has led some industry insiders to talk about a move to Wales as early as 2020. Formula 1, with its 400 million-plus television audience, would give us a global stage like no other- but it’s the cluster we could build around it that’s the key.

In case people think that doubling down on the combustion engine sounds a bit backward looking, it’s Formula 1 companies that have been at the forefront of low carbon innovation from energy recovery to ‘lightweighting’ in design and materials. Maybe Riversimple’s Rasa – another Welsh-made car to be road-tested soon, powered by that original Welsh innovation, the fuel cell – could be mass-manufactured at Rassau, making us the Motorsport Valleys, plural, of the 21st century.

Environmentally, the project also has fascinating plans to not only offset and replenish the land taken for its construction but to positively invest in, engender and succour a wider diversity of natural resource, livestock farming and outdoor pursuits that can help to fling open to domestic and international visitors the previously locked southern approach to the sprawling spectacle of the Brecon Beacons National Park.

Let’s be positive and give this project a chance.

One thing’s for certain. If we don’t dare to build anything, if as a nation we are paralysed by risk-aversion and a chronic self-doubt, our dreams of a better future will remain forever nothing more than that; just dreams.