This section responds to requests from other researchers for activity codes and the explanation below allows them to calculate the total of foundational employment in their region or city economy.
The spreadsheet available by click through classifies activities by the 5-digit SIC codes (Standard Industrial Classification) used in the UK and the 4-digit NACE codes (Nomenclature statistique des activités économiques dans la Communauté européenne), which is the corresponding standard European classification.
From the spreadsheet, researchers can see at a glance which activities we include in the material foundational, providential foundational and overlooked economy. This allows users to replicate our published calculations of employment and output for the UK and regions. It also provides a framework which can be used to make comparable calculations for other countries and regions or to make adaptations which users can readily understand.
In the paragraphs below, we briefly explain our classificatory decisions on employment and output:
Material foundational economy includes the pipe and cable utilities, supermarkets etc. which through networks and branches continuously connect households to daily essentials; activities which are now often private or privatised because they have a revenue stream.
- Pipe and cable utilities add electricity, gas, water sewerage, telecoms including broadband.
- Transportation/ mobility systems include infrastructure and vehicles i.e.railways, roads, filling stations and all the public/social vehicles such as trains and buses. The universal postal delivery service is included but not private couriers like DHL.
- We include food (production, processing and distribution) because purchase is frequent, necessary and heavily dependent on infrastructure to bring it close to households.
- Access to banking services and the payments system is also essential to everyday life and, therefore, we include retail banking.
- We have included car retailing and servicing, but not car manufacture because cars are often used for basic mobility with no alternative in many rural or urban areas with limited public transport.
Providential foundational economy includes a subset of (mainly) public sector welfare activities providing the universal services available to all citizens; now increasingly outsourced.
- Health, education, care, police and prisons/law and order, funerals, public administration. Also included are their close and exclusive private suppliers but not the whole chain.
- Private supply chains, for example, dispensing chemists which support healthcare, but not pharmaceutical companies.
- Housing was excluded from our original foundational employment calculations (but in the calculations for our 2018 book we now put housing construction employment in the overlooked).
- There is in practice a contest between social housing as right and private housing as asset with the line between social right and household asset changing between countries and over time.
Overlooked economy includes goods and services culturally defined as essential and requiring occasional purchase, for example, the sofa for your house, the holiday from work etc.
- A variety of everyday necessities which: a) present as mundane and are taken for granted occasional purchases through a variety of channels and come in a cultural wrapper of style; and b) lifestyle support goods and services which can be often low-tech goods or mundane support services.
- These everyday necessities in the UK in the 2010s include for example, clothing, furniture including beds and sofas, double glazing and central heating or air conditioning, house maintenance, body maintenance including hairdressing, pet food and vet services, leisure including tourism, hospitality and airports.
- This is a changing socio-culturally defined list, for example, central heating of UK houses only became a mundane necessity in the 1970s, air conditioning in Australia in the 1980s
NB As noted above on housing, in the years since 2013, we have occasionally shifted activities in and out of the foundational classification; none of these changes make a significant difference to the aggregate employment or output totals in providential and material activities.
More important, employment and output metrics will of course give different measures of weight and significance; material activities with pipe and cable distribution are typically much less labour intensive than providential activities offering personal services. Thus the material foundational accounts for a larger share of UK output than of employment
The attached presentation, Wales through a foundational lens provides figures on foundational employment and GVA output for the UK Wales and Scotland. These figures, and the accompanying text illustrate some of the complexities.
Those using employment and output measures of the foundational economy should note the complications and remember that output and employment are supply side measures of the weight and significance of the foundational economy. A demand side calculation would consider household expenditure and start from the cost of inescapable expenditure items like housing, transport and utilities where it is not possible to make economies as the household can with food and clothing.