We’ve been trying a variation on the same theme in Welsh economic policy now for several generations, and we are running to stand still. Our national wealth level, or gross value added per head, has barely shifted in 20 years since we promised that the creation of a National Assembly would create an economic powerhouse for Wales. Two decades on, and we continue to search for a magic bullet—that much-loved transformational project. If only we could get a few high-profile inward investment projects and hope against hope for another Admiral Insurance, which, by the way, remains Wales’s only FTSE 100 company, almost 25 years after it was founded. And while we search desperately for a ribbon to cut, the day-to-day economy of our communities continues to tick over.

Today’s motion is a plea to look at what is hiding in plain sight, and discuss what we might do to nurture it—the mundane economy, as Professor Karel Williams has described it. Now, his is a name you’ll hear a few times this afternoon, I’m sure. Along with his colleagues in Manchester Business School, he’s done much to give life to the idea of the economy of the everyday, the so-called foundational economy. As a son of Llanelli, Karel Williams has taken the forlorn state of the town I represent in our National Assembly as a case study in what can be done to bolster the bits of the economy that have been left behind after the heavy industry that inspired their creation has gone.

It’s the foundational economy that underpins the social fabric of our communities, and penetrates even our most disadvantaged neighbourhoods. The industries and businesses that are there because the people are there, the food we eat, the homes we live in, the energy we use and the care we receive. This isn’t a small part of our economy; it accounts for about four out of 10 jobs and £1 in every £3 we spend. Our focus has been on anchor companies employing more than 1,000 people in one place, but there are more than 3,000 people employed in making sofas across Wales, and they don’t feature in any economic strategy, but this is the type of unglamorous activity that forms the bedrock of our local economies.

Globalisation has seen us look the other way as local producers have been crowded out of the market by foreign-owned subsidiaries, who often pressure Welsh suppliers to drop their prices and ship the profits overseas. If we get it right, the foundational economy approach offers the chance to reverse the deterioration of employment conditions, stop the leakage of money from our communities and reduce the environmental cost of extended supply chains. There are big hurdles that stand in our way—it’s pointless to pretend otherwise—and rather than ignoring them, I’d like to confront them head on.

The first is undoubtedly cost. Public sector spending—the £5.5 billion we spend every year buying in goods and services—is often cited as a direct means of boosting our foundational economy. But just as the drive to reduce budgets has led to the domination of large-scale privatised companies in the delivery of our public services, so too a reversal of this trend will require investment. Local businesses will need increased support to bid and deliver public sector contracts. We need to invest in higher skilled staff in local government with specialist procurement skills, and most likely the cost of goods and services we buy at the end of it all will go up, and we need to be honest about that. To achieve any genuine restructure will require significant investment, and a recognition that short-term financial gains should be deprioritised in favour of longer-term benefits, and we must be honest about that, too.

But the realities of our economic landscape and of impending automation make it costly not to. I’ve spoken before about how the eruption of computers being able to learn for themselves means that human brains, as well as human hands, are now in danger of being replaced by machines and algorithms. Accountants, underwriters, clerks and analysts—whole rafts of professions are profoundly vulnerable. In total, an estimated 700,000 jobs are at risk of automation in Wales alone. And whilst the high-value, knowledge-based jobs that will remain following this second wave of automation will hold considerable attraction, we must ensure that the jobs at the other end of the spectrum—those that make up the mundane bedrock of our economy—do too.

The second equally valid argument against ploughing scarce resources into the foundational economy is that it is radical and an untested approach. But as I set out earlier, our existing economic strategy has been tested—it’s not working. Our failure to rejuvenate our economy through conventional approaches has meant we’ve had to plough money into anti-poverty programmes and employment support programmes to mop up the mess. But the attraction of the foundational economy is that it would address both the weakness of our economy and the social consequences of it. And, yes, it is radical—that’s the point. We are facing a confluence of public disaffection. Brexit and the fourth industrial revolution—our operating environment is changing radically and we must do likewise. We must move away from the orthodox and give experimental a go, because failing to take notice of our foundations means we risk our entire fragile economic structure crumbling. Diolch.