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Building strong foundations as a precondition for sustainable growth and development…Five big takeaways from LEDC’s episode with Kevin Morgan on the foundational economy

  • Writer: Mike Spicer
    Mike Spicer
  • Jul 4
  • 6 min read

With both of us increasingly engaging with leadership teams seeking to understand and operationalise what is termed the ‘Foundational Economy’ in their place-based strategies, we were absolutely delighted to welcome Kevin Morgan to the podcast. Professor Kevin Morgan is University Dean of Engagement at Cardiff University and a Professor of Governance and Development in the School of Geography and Planning.


Kevin is perhaps best known for pioneering the Foundational Economy (FE) concept, which has profoundly reshaped thinking about local economic development, particularly in Wales. His major contributions represent a highly practical example of academic-policy engagement following our last guest episode with Sarah Chaytor. His academic insights into place-based innovation, governance, and sustainable food systems, are being directly translated into tangible policy initiatives in Wales and influencing regional development thinking across Europe. His expertise on FE, however, sits alongside a considerable portfolio of work on high tech industrial growth, regional innovation systems and smart specialisation. So, he can genuinely straddle two very different approaches to LED. These are five of the key takeaways we believe the episode surfaces on FE, and how we can translate big FE issues facing our cities, towns, and regions into actionable policy and practice.

A hand wearing a brown watch reaches for red apples among green leaves on a wooden background.

Defining the foundational economy is an important precondition for using it strategically in LED and placemaking


The Foundational Economy, along with concepts like inclusive growth, community wealth-building, wellbeing economy, and doughnut economics, share a place-based focus on inclusion and equity. These ways of thinking challenge orthodox economic development thinking prioritising high-growth, globally traded sectors like tech, professional and business services, and advanced manufacturing in pursuit of GVA growth and productivity improvement. Instead, FE focuses on essential goods and services that everyone relies on for daily life, regardless of their income or location. Kevin offers an FE definition encompassing household essentials, basic public services, and social infrastructure tending towards a focus on topics like food, care, social housing and the like.


Prescriptively, FE seeks a more balanced focus on wellbeing as opposed to high economic growth. It argues that FE sectors and industry can employ around half of all workers, often in place-based ‘sticky’ anchor institutions, and are critical to the wellbeing and active citizenship that is a precondition for sustainable growth and development. Moreover, unlike the inherently competitive, often zero-sum, character of market-based growth, GE ‘success’, building social capital and community resilience, is a win-win positive sum strategy. 


It is possible to move from rhetoric to highly practical intervention strategies


The economic argument for a focus on FE sectors and industries is highly persuasive for any credible inclusive growth strategy. However, Kevin recognises that, even in Wales whose government’s early and significant adoption of the Foundational Economy concept into its economic development strategy was the first in the UK, it is difficult to move from rhetoric to reality – especially in a period of public finance austerity.

 

The Wales Government (WAG) has put in place legislative underpinning in the 2015 Wellbeing of Future Generations (Wales) Act, and followed this up with policies (e.g. good work and fair pay), plans (e.g. the Economic Action Plan), and programmes (e.g. Backing Local Firms Fund). Most recently, the Foundational Economic Mission Statement sets out succinctly how the WAG defines FE, the key sectors it will support and the objectives they are seeking to deliver.  

 

A case study founded on ‘food'


The episode discusses a practical (and highly inspirational) FE example using Kevin’s work on food (and his recent book referenced below). Malmo in Sweden’s ‘pedagogic meal’ is a comprehensive approach to school and preschool meals that goes far beyond simply providing nutritious food. It views the mealtime as an integral part of the educational experience and a tool for learning and development. It integrates food provision with educational goals, health, environmental sustainability, and social development, recognizing the meal as a powerful daily learning environment.


In a Welsh context, Kevin explains how it is possible to use public procurement of meals in schools, hospitals and prisons – all potentially highly vulnerable people – in ways that are cost-neutral, organic, and reduces carbon footprint. The approach addresses both supply side (e.g. food industry), demand side (e.g. leaners’ tastes), improves societal outcomes, (e.g. nutrition and health, sustainability, local business growth) literally “from farm to fork…”. Meeting basic human needs through this type of direct intervention as opposed to indirectly through market supply chains can also assist market sectors in areas like, for instance, town centre revitalisation in growth of the food and drink sectors.


Another case where hyperlocal interventions and multi-tie collaboration is challenging but vital


FE interventions in sectors like, food, care, and social housing, are often most effective at hyper-local level – in specific neighbourhoods and communities. But the need for the scale and alignment of national policy and resources, and sub-national leadership and governance is critical. Kevin spoke about the tensions of UK and Wales national government, the experience of Cardiff Capital City Region and its ten local authorities, before we even get to on-the-ground schemes in towns and communities. Synchronising what he terms directionality and subsidiarity is a principle of managing change effectively that applies as much to FE as to other more traditional LED and placemaking strategies. We explored the example of acute labour shortages in wellbeing economy sectors that require policies at top tables of every tier of governance – but also practical local action from, say, FE colleges who typically may have very modest or even no voices at any of those decision-making levels.

 

Do we need a national foundational economy strategy alongside the National Industrial Strategy?


Our discussions with Kevin preceded the launch of the National Industrial Strategy in June 2025. But we did raise the case for a National FE strategy. Having now seen the relative invisibility of FE in the National Industrial Strategy, all of us need to revisit and probably take forward that discussion.

 

There are definitely FE policies on which it would be helpful to have a national focus – from issues like labour supply to public procurement. There will always be funding challenges. Perhaps more fundamentally, it is a stretch to see how a National Industrial Strategy focused largely on eight high-tech, high growth sectors can deliver even the growth mission, if the wellbeing and FE sectors that are such a large part of the economy are ignored. It certainly will NOT deliver any of the other social and environmental missions. FE investment and development is critical to community wellbeing, to public services reform and demand management, and to redressing the political disruption and non-solutions of recent local elections and global volatility. Moreover, strengthening pathways between high growth and FE/wellbeing sectors for businesses, workers and young people needs priority interventions.


Concluding remarks


We introduced Professor Kevin Morgan to the podcast by complementing his academic work as ‘tour de forces’ on the topics about which he is passionate. The podcast does not disappoint, as we cover the issues referenced above and much more. Kevin's insights offer a powerful lens through which to reimagine local economic development, moving beyond a conventional focus on high-growth sectors to embrace the vital Foundational Economy. We've only scratched the surface of a number of critical themes including the case for a national Foundational Economy strategy to complement, and indeed strengthen, the recently


But what do you think about the foundational economy? What are your own experiences and current challenges, either in your institutions or economic geography, of dealing with FE? Please let us know and let’s keep the discussions going.


Further reading


On Kevin’s recent work on FE and food systems:


On foundational economy more generally:

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