The World Bank defines economic resilience as 'the ability of the economy to cope, recover, and reconstruct and therefore to minimize aggregate consumption losses.' It distinguishes between 'instantaneous resilience, which is the ability to limit the magnitude of immediate production losses' and 'dynamic resilience, which is the ability to reconstruct and recover.'
Due to the Covid-19 crisis it can be expected that different regions across Europe will have an increase in unemployment, SME failure and the need to re-assess the structure of the regional economy, especially if large employers have gone bankrupt or significantly reduce their activities and staff because of the crisis.
But, putting Covid-19 aside, resilience is actually more generally relevant, as European regions have to deal with the increasing pressure of dealing with transition and changes in the economy, such as e.g. mainstreaming ICT or piloting the transition towards a greener and more circular economy.
For this reason, the Policy Learning Platform hosted a webinar on the topic of building resilient economies on 17 June 2020. Especially during the COVID-19 pandemic, ensuring resilient economies across Europe is of high importance. The webinar outlined how to protect regional economies and ecosystems from shocks providing more than short-term solutions.
Three representatives from Interreg Europe projects shared with us their experiences with different crisis or structural changes they had to cope with. Watch the webinar recording below and explore the key learnings further down this article.
Webinar agenda overview
Navigate to the discussion topics of interest in the webinar agenda overview below.
00:03:24 Introduction by SME competitiveness Thematic Expert Mart Veliste on building resilient economies.
00:26:50 Q&A: Looking back, do you still think that the collapse of Nokia was the best things that happened to the region of Oulu?
00:46:12 Q&A: Which institutions were the driving force in setting up all those support measures for the impacted SMEs? What enabled you to react so quickly?
01:01:02 Q&A: How far are you in process of revamping your regional economy? How long will it take to get to the next stage?
01:02:51 Q&A: Besides the High Growth Company Academy do you have other 'targeted' company support measures in the region?
01:11:55 Q&A: Do you have practical tips on How SMEs can use COVID-19 crisis to transform and strengthen their business instead of going to closure?
01:19:00 Q&A: Do you think this crisis will modify the way you work and the services you offer to companies, on the long-term?
Short-term resilience measures, e.g. as an answer to the Covid-19 or other crisis
On the level of support provided to single companies on how to help the overcome the economic consequences of the economic crisis, the speakers highlighted the following aspects:
- Grants and further financial schemes are useful to prevent immediate collapse. However, there is a clear need for business support organisations to go beyond and provide increasingly tailored individualised services to companies.
- Entrepreneurs need to be listened to, coached and motivated to carry on or restart.
- Companies should be helped to embrace changes, which were accelerated by the Covid-19 pandemic. Examples therefore are:
- The digital transformation impacts now even stronger all business processes. It is e.g. crucial for some businesses to build up within a few weeks reliable online sales processes and structures.
- The lockdown period and the new remote working habits of many employees might permanently change the way office work is understood.
- New business models need to be created rather than focussing on improving existing ones.
Developing a resilient economy on the mid- to long-term
On a longer-term perspective, improving the resilience of the economy requires close co-operation between all relevant stakeholders. In order for that to happen, local or regional partnerships or ecosystems involving policy makers and local authorities, knowledge providers (universities, research organisations) and businesses need to be nurtured:
- Innovative ideas are coming from bottom up. They need to be boosted up by adequate support services such as e.g. hackathons, accelerators and coaching.
- Local authorities and further stakeholders need to combine resources, knowledge and expertise to provide such favourable environments enabling good business ideas to flourish. Testing environments are an example for that.
- The public sector needs also to ensure and develop the availability of qualified people so that companies can grow and hire new employees. New skills need to be developed through adequate education and training opportunities.
The speakers highlighted the importance for business support organisations to foster collaboration and networking among all players. Approaches for a resilient economy require complex and dynamic interactions on the local level.
It was also emphasized that regional collaboration and learning is extremely important now, as the crisis has impacted regions asymmetrically and regional solutions will play a big role in mitigating the long-term outcomes of the crisis.
- On the 26th of June the FOUNDATION project will host an online workshop on Policy Support for Industrial Resilience. The FOUNDATION project aims to provide a framework and roadmap for regions facing industrial closures, job losses and uncertainty, to develop economic resilience through collaboration.
- Brief overview of the latest reports from the OECD and Spatial Foresight on how the Covid-19 economic crisis impacts regions asymmetrically.
- Story on the 'Oulu Miracle' and building regional resilience in the wake of a key employer losing its prior international competitiveness.
- Take a look at the more in-depth reports on economic resilience: 'EMU Thematic Discussions on Growth and Jobs', note for the Eurogroup (2017) and 'The resilience of EU Member States to the financial and economic crisis' by Joint Research Centre (2017).
Image credit: Photo by Pixabay from Pexels
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