Guidance

The foundational economy

We want to improve the basic goods and services that everyone relies on.

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First published:
24 September 2024
Last updated:

Contents

The foundational economy (FE) provides everyday goods and services. These include:

  • care and health services
  • food
  • housing
  • energy and utilities
  • construction
  • transport
  • high street retailers
  • tourism

Why the foundational economy matters

Supporting the foundational economy is a key commitment in our Economic resilience and reconstruction mission.

The foundational economy accounts for:

  • 60% of all Welsh headquartered businesses
  • 51% of employees of the Welsh VAT registered businesses
  • 47% of overall turnover in Wales
Map of Wales showing FE businesses as a percentage by region, ranging from 51% to 73%.

 

Innovation in the foundational economy is vital for addressing challenges such as: 

  • the climate emergency
  • job creation
  • developing future skills
  • expanding transport
  • rolling out digital technology
  • creating a resilient food system

We work with local public and private organisations to deliver these essential services.

What we aim to achieve

We aim to:

  • strengthen the foundational parts of the economy, making them more resilient to external shocks
  • support Welsh businesses to embrace fair work principles and create high-skilled jobs
  • improve working conditions, ensuring fair work, skills improvement, and career progression
  • sustain and grow locally-owned businesses to circulate profit and wealth in Welsh communities
  • enhance access to foundational economy goods and services, improving wellbeing across Wales

Our objectives for the foundational economy

We are committed to:

  • supporting opportunities for more, better and greener jobs 
  • promoting fair work, good pay, representation, security and opportunity to progress
  • increasing ‘household liveability’ by raising wages and reducing the cost of essentials  
  • ensuring universal access to high quality goods and services to improve health and wellbeing
  • building local supply chains to keep people, skills and wealth in Wales
  • increasing the use of ‘Made in Wales’ products to build a strong and productive supplier base
  • helping achieve Net Zero through green, clean and renewable energy 
  • promoting environmentally friendly production and consumption
  • encouraging collaborative innovation to improve FE goods and services
  • building resilient social infrastructure, such as through community-owned projects

Our approach aligns with the Well-being of Future Generations Act 2015.

Case studies

  • Woosnam Dairies: a local milkman became a key school milk supplier in Wales with help from Caerphilly Council.
  • Awen Cultural Trust and B-Leaf: growing local produce sustainably while creating jobs for adults with learning disabilities.
  • NappiCycle: using recycled fibres from Bluestone National Park Resort in road and pavement construction.
  • Can Cook: providing fresh, nutritious meals, supported by our Backing Local Firms Fund to tackle food poverty.
  • Velindre University NHS Trust: promoting sustainable food sourcing within the NHS,supporting a resilient Welsh food sector.
  • Simply Do Ideas: helping public sector organisations overcome barriers using digital innovation.
  • Castell Howell Foods: collaborating to drive social, environmental, and economic change in the supply chain.
  • Caerphilly County Borough Council: leading the reform of food procurement strategies in local supply chains.
  • NHS Wales Shared Services Partnership: updating food procurement strategies by using more local suppliers in the NHS.
  • Harlech Foods: promoting and supplying Welsh food produce to the public sector. 

Further resources

First published

24 September 2024

Last updated

Part of