How the new Welsh government can take a co-operative approach to creating real growth and opportunity for the people of Wales

As the dust settles on an historic election in the life of the Senedd and devolution in Wales, attention now turns from campaigning to delivery. Wales has a new Government, First Minister and Cabinet, and in the run-up to the election, amid all the political uncertainty, one thing became clear: people across Wales want change.

That desire for change is rooted in the everyday pressures facing households, communities and local economies over a long period of time. Poverty remains stubborn. Public services are under pressure. Too many places still feel that economic growth happens somewhere else, or benefits someone else. Growing the Welsh economy must be a central priority for the new Government – but the kind of growth we pursue matters.

Wales does not need growth that extracts wealth from communities and concentrates opportunity in too few hands or places. It needs growth that is meaningful for people and places across the country: growth that creates decent jobs, strengthens local supply chains, improves services, keeps assets people care about in community use, sees profits reinvested locally for wider benefit, and gives people a greater stake in the economy around them.

That is where co-operatives, social enterprises and employee-owned businesses have such a vital role to play.

The impact of social enterprise and democratic ownership

These are businesses rooted in purpose as well as profit. They trade, employ people, innovate and deliver services, but they do so in ways that keep wealth and power closer to communities. They are often anchored in the places they serve, governed with people rather than simply for them, and designed to deliver social, economic and environmental value together.

At their best, they show that economic development does not have to be something extractive and done to communities but can be something built by communities, for communities.

The opportunity now is to reimagine a more balanced Welsh economy, centred around greater opportunity for community wealth building and powered by Welsh-owned, redistributive, social and democratic enterprises. That means focusing not only on headline growth, but on how that growth is created and what it can achieve: better jobs, stronger communities, resilient local economies and a fairer distribution of wealth and opportunity.

Inspiring stories that show what is possible

There is a growing body of practice, in Wales and internationally, showing how co-operative and community wealth building approaches can help realise economic potential. This should not be a fringe idea – it is about building a modern economy where ownership, democratic control and long-term sustainability are embedded.

The economic potential has been realised in other regions, notably the Basque country. Cwmpas has been working closely with Basque colleagues, and we were pleased to join a visit, organised by the Office of the Future Generations Commissioner, to Mondragon recently. Mondragon remains one of the great modern examples of what co-operative economic development can achieve: not simply as a business model, but as an ecosystem of economic and cultural resilience through education, finance, and innovation. Their turnover of €11.2 billion and employment of over 70,000 people shows there should be no limit to our ambitions in this sector.

Wales has long been seen as a hotbed of cooperative development within the UK. The 2025 Co-operative and Mutual Economy report found that Wales lead the UK for growth over five years when adjusted for size, and that a total of 7% of the UK’s co-operatives are registered in Wales. But the next step is for the overall size of the co-operative economy in turnover in Wales to catch up with the rest of the UK.

In some parts of the country, real progress has been made. Networks of community-owned businesses and social enterprises have come together as cohesive and strategic coalitions, powered by the passion, creativity and determination of local people to make a difference. With investment, support and a huge amount of determination to overcome challenges, they have created meaningful change and improvements that have transformed places and lives, generating greater ownership of local wealth, assets and services. Now we need to see the same across Wales.

A potential catalyst for co-operative growth

There is strong alignment between the new Government’s manifesto commitments and the priorities long identified by the co-operative and social enterprise movement.

This historic tide of change and moment in time presents a real opportunity to go further and faster, leading the way as a cooperative nation. To do so, Wales needs a co-operative approach applied coherently across government priorities. The relevance of this agenda is central, but not limited, to the economy brief. It also has a role in housing, health, social care, childcare, tourism, sport, culture, the Welsh language, creative industries and community assets. It can help address market failure, protect valued local services, create more secure work, and give communities the tools to address the challenges they face now whilst shaping their own futures.

In many ways, this is a deeply Welsh way of thinking about the economy, reflecting the importance of place, wellbeing and social partnership. But turning the vision and ambition into practical change and real impact requires more than warm words. It requires an ecosystem approach: government, local authorities, funders, communities and the sector working together with shared purpose.

Commitments to introduce a Community Right to Buy could make it easier for valued local assets like pubs, shops, cafés, buildings, land and cultural venues to move into community ownership when they come up for sale. At a time when communities across Wales are fighting to protect the assets that matter to them, this could be transformative.

A commitment to more specialist support to create, grow and sustain co-operative, employee-owned and social businesses is also essential. These models are powerful, but they require the right advice, expertise and patient support. If Wales wants more democratic and socially purposeful businesses, it must invest in the infrastructure that helps them start, survive and scale. Critical to empowering local economic wealth building is responsive business support tailored to locally determined priorities.

In addition, targeted support for co-operative and social business development centred around national and regional economic priorities could advance the potential of the sector to generate sustainable economic growth and lasting economic impact, growing Welsh businesses that are here to stay, whilst building more self-sufficiency and more resilience to global shocks. These opportunities exist around large-scale infrastructure, construction and energy investments and could be realised in an economic development system with a co-operative and social enterprise approach at the core.

A national approach to developing Welsh-owned businesses, strengthening local supply chains, creating fair work and spreading prosperity across Wales provides for a major opportunity. This would enable growth built on locally-rooted ownership, and economic development rooted in the needs and strengths of places. In developing a framework for this and the remit of a national agency, it’s vital that the potential of this sector is at the heart, and that co-operatives and social enterprises are part of the conversation.

The manifesto commitment to improved access to finance would be a crucial lever. Too often, social and democratic businesses face barriers when trying to access appropriate finance. A more tailored approach, as has been developed by our colleagues at Social Investment Cymru, could help unlock ambition and enable communities to take forward viable projects.

Procurement is another major opportunity. The commitment to increase Welsh public procurement spend with Wales-based suppliers from 55% to at least 70%, alongside contract scoring that gives greater weight to community impact, social value, Welsh business capacity and local supply chains, could help shift public spending towards wider public benefit. Done well, procurement can be one of the most powerful tools Wales has for building local wealth.

There are also important commitments to expand social enterprise and co-operative models in social care, support community and co-operative ownership of cultural spaces, and develop co-operative solutions and shared resource hubs for freelancers and self-employed workers in the creative industries. These practical, sector-specific interventions show how co-operative thinking can be applied across the economy and society for greater impact. Opportunities to go further exist across all areas that are a priority for thriving communities where people live well, from the role of social enterprise in supporting Plaid’s flagship childcare offer, to food security, transport and tourism.

Transforming the Welsh economy

The task now is delivery. The co-operative, employee ownership and social enterprise sectors are ready to play their part. They bring practical experience, specialist knowledge and real examples of what works in a business environment. As the new Government begins to develop its key programmes, strategies and legislation, it is vital that the sector is considered and enabled to play a meaningful role at every stage, from design and development through to delivery.

Wales has an opportunity to build an economy that is more resilient, more democratic and more rooted in the communities it serves. The ambition is there. The manifesto commitments provide a strong foundation. Now is the moment to turn that ambition into action.