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Coronavirus shines a spotlight on the essential economy

April 1st 2020

Helen Cunningham discusses how the essential economy has taken centre stage like never before

It is difficult to imagine what the full and long-term impact will be of the crisis when we are in the midst of it. National debt is certain to rise steeply and the global economy will have contracted faster, sharper and deeper than ever before.  We don’t yet know what businesses will survive, what the landscape in which they trade will be like, or what this will all mean for local economies. What we do know is that essential parts of the economy have taken centre stage in the first weeks of the crisis through cultural and economic changes that we could not have imagined.

Re-casting the “essential”

Delivery drivers, food manufacturing and supermarket workers are being recognized like never before for their critical role in keeping us in supply of basic goods. The cleaners of the factories, hubs and trains that remain running are doing preventive work that can make the difference between life and death. On deserted roads, buses continue to ferry people to and from where they need to go. The speedy closure of most schools, colleges and university teaching has taken place in parallel to a shift to home working for those who can and home schooling. It has illustrated the invaluable contribution made by teachers to raising and educating the next generation but also the often-invisible child-rearing work of caregivers, parents, grandparents, which is on the whole shouldered more by women and gives fresh meaning to the term “overlooked economy”.

These are essential activities in what many of us know as the foundational economy. For other parts of the foundational economy, the truth is that the bottom has fallen out of it. Even before the statutory government guidance was published, businesses in what is referred to as the overlooked economy (a sub section of the foundational economy), such as hairdressers, were closing not so much voluntarily, but rather due to plummeting demand as customers stayed away. Tourism, another foundational economy sector, has been a flashpoint for how not to self-isolate, with authorities actively turning away and closing routes and deterring visitors to some of our best loved tourist attractions. The “nice to have” parts of the economy are for now, the parts people are going without.

Manufacturing the future?

This crisis is also a stark reminder of just how essential manufacturing really is. The stepping up, scaling up and wholesale switching of production to ventilators and medical devices via projects Oyster and Penguin and the consortium Ventilator Challenge UK have illustrated the crucial role of manufacturing of these essential products. Enterprising techies turning their skills to the home manufacturing of face masks and shields shows how innovative individuals can be in times of crisis, but also reminds us of the much-reduced capacity of a sector that has at times felt overlooked and undervalued, despite its ability to provide relatively skilled and secure jobs. This week’s announcement from the Welsh government of re-prioritised funding package to respond to the crisis demonstrates a welcome recognition of the role of manufacturing in Wales.

As the Coronavirus crisis continues to unfold, the essential, overlooked and “nice to have” parts of the economy will emerge with even more clarity. Let’s hope it leads to an honest conversation about what really is essential, overlooked or nice to have, and how they all have a part to play in a post-pandemic economic settlement.

Helen Cunningham is Project Officer at the Bevan Foundation, leading our work on building economic resilience in the south Wales valleys

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