“The infrastructure of everyday life” – has the time come for the foundational economy?

The last few years has seen growing interest in what has been termed the ‘foundational economy’ and its potential value for achieving economic security and social sustainability. Accounting for around 44% of UK employment, it has been argued that supporting this section of the economy could ultimately improve productivity. And the current pandemic has placed even more emphasis on the importance of the foundational economy – the part of the economy that cannot be shut down.

What is the foundational economy?

The foundational economy provides universal basic services built from the activities which provide the essential goods and services for everyday life, regardless of the social status of consumers. Primarily delivered locally, these goods and services encompass infrastructures, utilities, food, retailing and distribution, education, health and welfare. Because of this, it is thought to have considerable potential to regenerate the areas where the local economy is relatively weak – perhaps the perfect solution for the levelling up agenda?

The initial manifesto for the foundational economy from researchers at the University of Manchester resulted from dissatisfaction with generic industrial and regional policy focused on promoting competition and markets; with success measured in terms of job creation and GDP growth. According to the manifesto, the foundational economy is “the mundane production of everyday necessities” which is taken for granted by all members of the population. As such, it is often also referred to as the ‘sheltered’ or ‘invisible’ economy.

Scale and value

In providing the infrastructure for everyday life, the foundational economy is also very large. It has been noted that in all European countries, it directly employs around 40% of the workforce. In the UK, around 44% of the workforce is employed in foundational activities. In Germany, it is 41% and Italy it is 37%. The value of foundational output and volume and diversity of foundational employment is therefore much larger than in high-tech and tradeable services, with which policymakers are determinedly focused on.

Other measures of value have also been highlighted, such as household expenditure. The initial manifesto notes the importance of weekly spend on the foundational economy with nearly 30% of all household expenditure going on foundational activities.

Despite providing vital services, and employing a significant portion of the UK population, the foundational economy is marked by low-tech, low-wage, part time and often precarious employment and is potentially at risk from automation, despite the significant ‘human’ element to many of the different job roles which make up this part of the economy. Within society a lot of foundational jobs are still considered by many (often who don’t work in the sector) to be “jobs you move on from” where in reality, for many people, particularly women and migrant workers, this isn’t the case.

But where would we be without these roles providing for all citizens’ basic needs? Job creation and GDP growth may suggest a successful economy but this, it is argued, does not show the wellbeing of all society or sustainability. In the face of current, and indeed future, crises, it seems perceptions may be starting to change as more and more people become concerned with health and wellbeing and the environment. Indeed, it has long been argued that necessity is only recognised in times of crises.

Has Covid-19 shone a vital light on the foundational economy?

While many sectors were shut down due to the coronavirus pandemic, the foundational economy remained open as it was considered systemically important for meeting basic needs. The pandemic has highlighted that this part of the economy is needed at all times, including at times of crisis.

Healthcare staff have become frontline heroes and food delivery drivers are recognised as key workers. But this enhanced status has also highlighted the poor pay and conditions of many key workers delivering these essential goods and services and the inherent inequality that exists in society.

Just like other crises, from natural disasters to large scale economic shocks, these bear most heavily on the poor and vulnerable. The pandemic has shown that these inequalities must be addressed so that basic everyday services are more equally available.

The pandemic has also shown that economies are about more than market economies. It has been argued that there needs to be a move towards meeting a population’s basic needs rather than on individual consumption.

Way forward

Advocates of the foundational economy argue that public policy should focus on securing the supply of basic goods and services for all citizens in a socially responsible way.

The 2020 manifesto for the foundational economy from The Foundational Economy Collective argues for the renewal of the foundational economy with a ten-point programme, including proposals related to:

  • better health and care
  • housing and energy
  • food supply
  • social licensing
  • tax reform
  • disintermediation of investment from pension funds and insurance companies
  • shorter supply chains in foundational commodities
  • citizen engagement
  • better technical and administrative capacity at all levels of government
  • international constructive responsibility

It has been widely agreed that a return to business-as-usual approach following the pandemic is not the way forward and that there needs to be a shift in economic policies in order to achieve a more socially and economically just society. Perhaps if such policy change is achieved, a more balanced economy that provides a good quality of life for all can eventually be realised.


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‘Bending the Curve’ of biodiversity loss – could Covid-19 be the catalyst for change?

dead forest pic

“The evidence is unequivocal – nature is being changed and destroyed by us at a rate unprecedented in history” (WWF)

The latest Living Planet report from the Worldwide Fund for Nature (WWF) finds that 68% of the world’s wildlife populations have been lost since 1970 – more than two thirds in less than 50 years – with the most striking result a 94% decline in tropical subregions of the Americas. The report says this ‘catastrophic’ decline shows no signs of slowing. The cause – human activity.

Until 1970, the ecological footprint of the human population was less than the rate of the Earth’s regeneration. Explosive growth in global trade, consumption, population growth and urbanisation means we are now using more of the world’s resources than can be replenished:

“To feed and fuel our 21st century lifestyles, we are overusing the Earth’s biocapacity by at least 56%.” (WWF)

The environmental impact of human activity is hardly a new topic but the numerous warnings over the years haven’t had the desired effect of changing society’s trajectory. The stark warnings from recent reports including the 2018 IPCC (Intergovernmental Panel on Climate Change) special report on the impacts of global warming, and popular programmes such as the Blue Planet II series which highlighted the devastating impact of pollution on the world’s oceans, have certainly helped heighten awareness and action has been taken across the world to address the climate emergency. Unfortunately, the progress made so far is not enough to reverse the current declining trends.

But the new report raises hope in that times of crisis new ideas and opportunities for transformation can arise and that the current Coronavirus (COVID-19) pandemic could perhaps be the catalyst for such change.

‘People and nature are intertwined’

COVID-19 has undoubtedly injected a new sense of urgency, emphasising again the interconnectedness of humans and nature. It has provided a stark reminder how unparalleled biodiversity loss threatens the health of both people and the planet.

Factors believed to lead to the emergence of pandemics – including global travel, urbanisation, changes in land use and greater exploitation of the natural environment – are also some of the drivers behind the decline in wildlife.

The report emphasises that biodiversity loss is not just an environmental issue, but also a development, economic, global security, ethical and moral one. And it is also about self-preservation as “biodiversity plays a critical role in providing food, fibre, water, energy, medicines and other genetic materials; and is key to the regulation of our climate, water quality, pollution, pollination services, flood control and storm surges.”

As well the pandemic, a series of recent catastrophic events are used to underline the intrinsic links between human health and environmental health, including: Africa’s plague of locusts in 2019 which threatened food supplies, caused by the unusually high number of cyclones; extreme droughts in India and Pakistan in 2019, leading to an unknown death toll; and Australia’s most intense bushfire season ever recorded, made worse by unusually low rainfall and record high temperatures, as well as excessive logging.

Alongside this, the “extraordinary gains in human health and wellbeing” over the past century, including reduced child mortality and increased life expectancy, are highlighted as a cause for celebration but the study warns that the exploitation and alteration of the natural environment that has occurred in tandem threatens to undo these successes.

Biggest threats to biodiversity

Clearly, biodiversity is fundamental to human life and it is vital that the drivers of its destruction are addressed; and quickly.

Drawing on the Living Planet Index (LPI), which tracks the abundance of mammals, birds, fish, reptiles, and amphibians across the globe, using data from over 4,000 different species, the report identifies the major threat categories to biodiversity:

  • Changes in land and sea use
  • Invasive species and disease
  • Species overexploitation
  • Pollution
  • Climate change

It may be surprising to learn that climate change has not yet been the main driver of biodiversity loss. In fact, globally, climate change features lower on the scale of threats than the other drivers in almost all regions. Changes in land and sea use is the biggest proportional threat, averaged across all regions, at 50%. This is followed by species exploitation at 24% with invasive species taking third place at 13%. Climate change accounts for 6% on average.

However, the report warns projections suggest the tables are set to turn with climate change overtaking all other drivers in the coming years.

But all is not lost yet. The report argues that it is possible to reverse these trends and calls for action to do so by 2030.

Bending the Curve’

This year’s report highlights findings from significant new research, the Bending the Curve initiative, which uses pioneering modelling of different human behaviour scenarios aimed at restoring biodiversity. It argues that this has provided ‘proof of concept’ for the first time that we can halt, and reverse, the loss of nature while feeding a growing population:

“Bending the curve of biodiversity loss is technologically and economically possible, but it will require truly transformational change in the way we produce and consume food and in how we sustainably manage and conserve nature.”

2020 has certainly made the whole world stop and think. And it has provided an opportunity to reset humanity’s relationship with nature. Encouragingly, there has been widespread talk of a ‘green recovery’ from the pandemic and the British public have recently backed a “fairer, greener Britain” amid concerns the government might be rushing the country back to a ‘business-as-usual’ model.

Achieving a balance with nature will clearly require systemic change, as the Living Planet report shows. In the words of Sir David Attenborough, above all it will require a change in perspective”.


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