Covid-19, the foundational economy and 'rooted firms'.
| Date | 22 June 2020 |
| Author | Brett, Will |
Many of the businesses navigating the current crisis have something in common: they are what the Foundational Economy Collective describes as 'grounded' or 'rooted' firms: businesses with long-term links and relationships to their various stakeholders (customers, workers, supply chains and wider communities). (1) Some deliver 'foundational' goods and services, like healthcare and food, that we all rely on daily; others don't. But most do more than simply providing goods and services. They bring people together, invest in local skills, and give places a sense of meaning and distinctiveness. Their value goes well beyond their contribution to GDP. Many are small or micro businesses with an intimate understanding of their own communities (like many of the businesses I work with through the Guardians of the Arches). (2) Others are big firms, like Morrison's, which owns many of the farms, factories and processing units which supply its stores, putting it in long-term relationship with much of its supply chain, as well as its customers and staff, who benefit from this unusually stable business model. (3)
While many rooted firms are struggling, with turnover falling to zero in the lockdown, their longer-term value proposition is increasingly obvious to people starved of face-to-face connection with their local community. And the loyalty of their customer base, sustained through genuine relationships over the long term, puts them on course for a sharp rebound.
Most firms in the foundational economy...
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