The foundational economy

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

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

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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.

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

Read about our objectives in the Foundational economy: mission statement.

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

• 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. 

• 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