The business potential of the foundational economy in the south Wales valleys

Reports ResourcesAugust 24th, 2020

The foundational economy is thought to have considerable potential to regenerate the areas where the local economy is relatively weak, such as in the south Wales valleys. However, successfully growing the foundational economy depends in part on there being local businesses with the skills, capital, ambition and support to spot and develop new opportunities.

This report explores the capacity and potential of businesses in three communities in the south Wales valleys. The key findings are:

In all three communities there are businesses with potential to grow. The vast majority of these businesses are small businesses, micro-businesses and the self-employed.
New businesses are being established and existing businesses are adapting and growing new activities.
Many businesses had plans for expansion before the coronavirus pandemic, and despite the challenges of lock down, have confidence that they can bounce back

Given the business profile and needs of smaller communities right across the south Wales valleys, we argue that developing the foundational economy needs a different approach to past economic development measures adopted in the area, including:

Support targeted to micro-firms, with much more effective communications and networks between businesses, business support services, local and Welsh Government.
Address economic development concerns including the availability of suitable premises for expansion, conversion of empty properties and the improvement of transport links.

With small communities right across Wales facing similar challenges and circumstances as those featured in this report, we emphasise that smaller communities need these interventions just as much as larger settlements.