Activity Classification

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 classify 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 spreadsheets, researchers can see at a glance which activities we include in the material foundational, providential foundational and

overlooked economy allowing a replication of our calculations. It also provides the framework to calculate for other countries and to make adaptations.

In the paragraphs below, we briefly explain our classificatory decisions:

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: 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: 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 totals in providential and material activities.

More important, employment and output metrics are both proxies which will give different measures of weight and significance; and it should be noted that  material activities are typically much less labour intensive than providential activities. Those using employment measures of the foundational economy should consider these complications.

The attached presentation, Wales through a foundational lens provides figures on foundational employment and GVA for the UK Wales and Scotland. These figures, and the accompanying text illustrate some of the complexities.