We want to improve the basic goods and services that everyone relies on.
Contents
What is the foundational economy
The foundational economy includes sectors that provide the goods and services we use every day.
These sectors:
- shape the services we use and the places we live
- are a vital part of daily life and our communities
We want to support the people and organisations working in these sectors to:
- make sure their services are high quality and easy to access
- give people a greater sense of control and belonging in their communities
Sectors we focus on
We are focused on the following parts of the foundational economy:
- care and health services, including social care and childcare
- management of social housing
- construction of residential and commercial buildings
- energy and utilities
- food
- high street retail and services
- tourism
- public transport
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

Strengthening the foundational economy is vital for addressing challenges such as:
- addressing the climate emergency
- job creation, retention and improvement
- developing future skills
- expanding public transport
- rolling out digital technology
- creating a resilient food system
What we aim to achieve
- 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
Read about our objectives and methods in the Foundational economy: mission statement.
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
- Foundational Economy Online module
- Foundational Economy – Cynnal Cymru – Sustain Wales: contains case studies showing FE approaches and innovation, including examples from Velindre Health Board, Castell Howell and Can Cook
- Online FE knowledge repository (CEIC)
- Circular Economy Innovation Communities (CEIC) - YouTube
- Buying Food Fit for the Future – online Food Procurement Resource - Embedding Sustainability into public sector food procurement to create a healthier, wealthier Wales
- Buying Food Fit for the Future – Video Introduction, Professor Kevin Morgan
- Harnessing the Purchasing Power of the Public Plate: A legal guide to embedding sustainability into food procurement to create a healthier, wealthier Wales
- Values for Money: Public Sector Procurement in Wales (Professor Kevin Morgan)
- Buying Food Fit for the Future – Resource Hub
- A Well-being Economy – The Future Generations Commissioner for Wales
- Public sector procurement
- Business advice and support | Business Wales
- CLES - The national organisation for local economies