{"id":1106,"date":"2019-03-27T18:00:22","date_gmt":"2019-03-27T18:00:22","guid":{"rendered":"http:\/\/blogs.cardiff.ac.uk\/business-school\/?p=1106"},"modified":"2019-04-09T11:33:30","modified_gmt":"2019-04-09T11:33:30","slug":"new-focus-on-the-foundations-of-the-uks-economy-might-help-poorest-regions-post-brexit","status":"publish","type":"post","link":"https:\/\/blogs.cardiff.ac.uk\/business-school\/new-focus-on-the-foundations-of-the-uks-economy-might-help-poorest-regions-post-brexit\/","title":{"rendered":"New focus on the foundations of the UK\u2019s economy might help poorest regions post-Brexit"},"content":{"rendered":"\n
\"\"
Known as the foundational economy, these \u201cbasics\u201d are all the goods and services that provide the social and material infrastructure for society .<\/figcaption><\/figure>\n\n\n\n

In our latest post, Dr Dylan Henderson teams up with Dr Laura Reynolds, a former Cardiff Business School PhD candidate, to discuss how a renewed focus on the foundational economy might answer some of the UK\u2019s regional inequality problems.<\/h3>\n\n\n\n

Among all the uncertainty Brexit is causing,\nconcerns have arisen over the potential fuel it is adding to the pertinent\nproblem of inequality<\/a>. There is mounting\nevidence<\/a> that post-Brexit, the economic\nand social disparities<\/a> between the stronger\nand weaker UK regions<\/a> will widen.<\/p>\n\n\n\n

Looking at a number of potential scenarios,\nestimates suggest that the poorest regions could be between 20% to 60%\nmore exposed to the economic risks than London<\/a>.\nWales and the north-east are among the regions\nmost likely to be affected<\/a> because they rely so heavily on\nexporting food and goods to Europe.<\/p>\n\n\n\n

\u201cBut while leaving the EU may be inevitable, the people and sectors in these regions needn\u2019t be left behind.\u201d <\/p><\/blockquote>\n\n\n\n

Moves are now being made to work out how to support these local economies nationally. While attracting new business to different regions is important, policy makers and established businesses are also looking at how supporting the basics of the country\u2019s economy \u2013 formed from things like utility networks, food and health services \u2013 could protect these areas from economic problems after Brexit.<\/p>\n\n\n\n

Known as the foundational economy, these\n\u201cbasics\u201d are all the goods and services that provide the social and material infrastructure\nfor society<\/a>. That includes the provision of primary\nresources (for example, health services, care and education) as well as the\ninfrastructure that allows society to function (utility networks, pipes,\ntelecommunications, broadband), and everyday, largely essential, consumption\nactivities (food, tourism, hospitality, retail). Together these three\ncomponents currently employ 63.8% (17.6%, 26.2% and 20% respectively) of all UK\nemployees<\/a>. They account for up to 30% of\nweekly household expenditure<\/a>. While a\nlarge part of the economy, these sectors often get ignored in favour of high\nvalue activities such as financial services, advanced manufacturing and life\nsciences.<\/p>\n\n\n\n

Traditionally, public policy has most overlooked the foundational economy. In part this was because of its low wage, low skilled and perceived low value composition<\/a>. Yet it is largely local and rarely bought or sold outside of the UK – meaning the sectors are resilient to economic shocks<\/a> like Brexit. <\/p>\n\n\n\n

\"\"
Foundational sectors are less impacted by imports and exports.<\/figcaption><\/figure>\n\n\n\n

When measuring the economic impacts of the UK leaving the EU, predictions are being made based on dependency on EU trade<\/a>. Since foundational sectors are less impacted by imports and exports it is hoped that they might provide some relief during the transition.<\/p>\n\n\n\n

Emerging policy<\/h3>\n\n\n\n

\u201cPolicymakers in Wales have already begun to adopt some foundational economy principles.\u201d <\/p><\/blockquote>\n\n\n\n

The 2018 Prosperity for All Economic Action Plan<\/a> incorporated four \u201cfoundation sectors\u201d. These are tourism, retail, food and care. Building on this, in February 2019 the Welsh government released \u00a31.5 million<\/a> to fund experimental projects that challenge conventional ways of prompting productivity and growth in these sectors. Motivations for these changes include the need to deliver better jobs closer to home and spark regional economic development.<\/p>\n\n\n\n

There are signs that the foundational\neconomy is finding its way into the UK\u2019s political discussions<\/a> too. At a regional level, it is beginning to gain traction in the\ntrailblazing local industrial strategies<\/a>. These place-based policies build upon the UK government\u2019s move toward\nlocal approaches to industrial development and economic growth. The first draft\nof the Greater Manchester Combined Authority\u2019s<\/a> strategy, for example, places the foundations of economy as one of\nits central objectives.<\/p>\n\n\n\n

\"\"
Out with the old and in with the new. Technological innovations are already changing the way businesses operate.<\/figcaption><\/figure>\n\n\n\n

But while policy is certainly needed to encourage more focus on the foundational economy, it is not the only thing that will help it grow. Our own research, for example, shows that technology is vital to encourage development of these sectors. <\/p>\n\n\n\n

\u201cTechnological innovations \u2013 including artificial intelligence, biotech, big data, cloud technology, internet of things, robotics and space technology \u2013 are already changing the way businesses operate.\u201d <\/p>

<\/p><\/blockquote>\n\n\n\n

And while these developments are most celebrated in the high value parts of the economy, they can help the seemingly more everyday parts<\/a> too.<\/p>\n\n\n\n

Though there will certainly be challenges, our early indications show that investing in technology that is supported by ultra fast fibre and mobile broadband technologies will make for positive long-term incremental changes<\/a> across the foundational sectors. These include increased innovation, business efficiency and value for customers.<\/p>\n\n\n\n

And while these developments are most celebrated in the high value parts of the economy, they can help the seemingly more everyday parts<\/a> too. Though there will certainly be challenges, our early indications show that investing in technology that is supported by ultra fast fibre and mobile broadband technologies will make for positive long-term incremental changes<\/a> across the foundational sectors. These include increased innovation, business efficiency and value for customers.<\/p>\n\n\n\n

While a new focus on the foundational\neconomy won\u2019t solve all of the UK\u2019s regional inequality problems after Brexit,\nencouraging growth in these sectors can help. But that is only so long as more\npolicy is put in place to support this. The country will need to incorporate\nthese often taken for granted products and services into national policy and\npractice. Only then can their value be truly realised, particularly in an\nuncertain political, economic and technological landscape.<\/p>\n\n\n\n

Dr Dylan\nHenderson<\/strong><\/a> is a Senior Research Fellow at the <\/strong>Welsh Economy\nResearch Unit<\/strong><\/a> at Cardiff Business School.<\/strong><\/p>\n\n\n\n

This article, originally published on The Conversation UK<\/a>, was written in collaboration with Dr Laura Reynolds<\/a>, Policy and Data Analyst at the University of Birmingham<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Known as the foundational economy, these \u201cbasics\u201d are all the goods and services that provide the social and material infrastructure for society . In our latest post, Dr Dylan Henderson […]","protected":false},"author":1677,"featured_media":1110,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[576],"tags":[567,569,568,167,557,9,28,100,555,570,115,112,499,166,116,563,553,82,222,118,559,393,549,37,571,509,564,551,95,98,168,550,560,572,554,245,573,556,558,565,23,548,575,552,47,44],"class_list":["post-1106","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-foundational-economy","tag-artificial-intelligence","tag-big-data","tag-biotech","tag-brexit","tag-broadband","tag-business","tag-cardiff-business-school","tag-cardiff-university","tag-care","tag-cloud-technology","tag-economy","tag-education","tag-employment","tag-eu","tag-europe","tag-financial-services","tag-food","tag-foundational-economy","tag-government","tag-health","tag-hospitality","tag-industry","tag-inequality","tag-innovation","tag-internet-of-things","tag-london","tag-manufacturing","tag-north-east","tag-policy","tag-policymakers","tag-politics","tag-regions","tag-retail","tag-robotics","tag-services","tag-society","tag-space","tag-telecommunications","tag-tourism","tag-trade","tag-uk","tag-uk-economy","tag-university-of-birmingham","tag-utility-networks","tag-wales","tag-welsh-government"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paOfaS-hQ","meta_box":[],"jetpack_featured_media_url":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-content\/uploads\/sites\/620\/2019\/03\/Digging-foundations.jpg","_links":{"self":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/1106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/users\/1677"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/comments?post=1106"}],"version-history":[{"count":8,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/1106\/revisions"}],"predecessor-version":[{"id":1195,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/1106\/revisions\/1195"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/media\/1110"}],"wp:attachment":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/media?parent=1106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/categories?post=1106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/tags?post=1106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}