Speaking at the launch in Pembrokeshire, Mr Hain said: 'This consultation document sets out the first stage in what will be an ambitious programme for modernising the Welsh economy so that it achieves world class status within a British economy that aims to be the best.
'In the past Wales has been perceived as a 'low-cost' nation. Lower pay bills and lower property costs were seen as attractive features, especially to inward investors looking to use Britian as a platform into Europe. Wales cannot compete on low cost alone. Our businesses need to be competitive on cost but they cannot afford to be the cheapest. They will succeed only by striving to be the best.
'The establishment of a Welsh assembly is so important economically. The assembly, which will be up and running a little over 18 months away will be better placed to tailor to Welsh needs, and in particular to mobilise the broad base of support necesary to see them implemented correctly. It will have direction of the new Welsh Development Agency which will be able to offer comprehensive coverage across Wales, combined with a coherant and well co-ordinated range of services to business, and a single point of contact for inward investors.
'High productivity and quality depend above all on skills. Since companies can locate almost wherever they choose in the global economy and can raise their finance internationally, investment locations will increasingly depend on the host country's skills base and the effectiveness of its infrastructure.
'The requirement for a highly skilled workforce means greater resources for education and higher education in Wales. It means lifelong learning programmes and the integration of education and training to generate a flexible workforce that is constantly re-skilling itself. It also means building the information superhighway and improving networks for technology transfer.
'Simply relying upon market forces will not work. We intend to establish a partnership with the private sector and with the different agencies and local authorities to create a more prosperous future for Wales.'
'An Economy for Wales' is available from Allan Moss, Industrial Training Policy Division, Welsh Office, Cathay's Park, Cardiff CF1 3NQ.
The Welsh Office will publish an Action Plan on Economic Development in Wales in the spring of next year.