Institute of Welsh Affairs: Wales lacks economic ambition
Wales will not be able to catch up England economically unless it is more ambitious, a top economist has warned.
There is "little evidence" that devolution has had much effect on the Welsh economy, Prof Gerry Holtham says in his report.
The value of the goods and services from Wales was 72.4% of the UK average in 1999 and 72.2% 13 years later.
The Welsh government said it was generating the conditions necessary to create jobs and attract investment.
The report has been produced for the think-tank, the Institute of Welsh Affairs (IWA), where Prof Holtham - a former Welsh government adviser - is chairman of its economy group.
"Surely it is time for the country to take a clear-eyed look at how ambitious it wants to be for its economic future and what sort of changes would be required to achieve its ambitions," he said.
Business leaders and politicians have reacted to the report, with the Federation of Small Business Wales claiming it was clear something different must be done if Wales was to close the gap with other nations.
Wales needs to grow as fast as eastern Europe in the post-Soviet era to catch up but that needs a "marked shift in approach" to have any chance, says the report.
It was at 72.2% of UK gross value added (GVA) per head in 2013/14, the latest available figure.
GVA is the value of wages and profits from goods and services produced.
If Wales continues to maintain growth at 2% a year, it would be only be at 79% of the UK average in 20 years' time.
To reach the old 90% target, which the report says was dropped and not replaced, Wales would have to increase GVA per head by at least 4% a year and it would take an "economic miracle," compared to post-war France and Italy.
IWA director Lee Waters said there was a need for borrowing to invest in big projects like the south Wales Metro and making Wales self-sufficient in renewable energy.
"If we really want to close the wealth gap with England we need to marshal all available resources behind a detailed long-term plan," said Mr Waters.
In Wednesday's Budget, Chancellor George Osborne said talks would begin towards setting up a City Deal for Cardiff, which would enable it to source millions of pounds for infrastructure projects.
A first phase of talks is also to start on the £1bn tidal lagoon project in Swansea Bay.
Prof Holtham added: "Ultimately, it is a political question for the people of Wales. Do we want to pursue modest sensible policies that will change our situation only very gradually?
"Or are we ready to venture something bolder with no certainty of success but some hope of making a faster change in Wales' circumstances?"
The Welsh government said the labour market was improving at a faster rate than across the UK as it was generating the conditions needed to create jobs and attract foreign investment.
"As a result, since devolution, household income in Wales has risen faster than the UK average, exports have doubled and inward investment into Wales is now at a record level," said a spokesman.