CRISIS, CHALLENGES & OPPORTUNITIES FOR REGIONS AND CITIES€¦ · Covid-19 cases have been...
Transcript of CRISIS, CHALLENGES & OPPORTUNITIES FOR REGIONS AND CITIES€¦ · Covid-19 cases have been...
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CRISIS, CHALLENGES & OPPORTUNITIES
FOR REGIONS AND CITIES
WEBINAR CIM ALTO MINHO, 16 SEPT 2020
Joaquim Oliveira Martins, Deputy-DirectorOECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE)
Covid-19 cases have been concentrated in some
cities and regions within countries
2
France
37% in Île-de-France
30% in Grand est
Italy
41% confirmed cases
are in Lombardy
United States
40% in New York
China
83% in Wuhan Province
As of March 31,2020
The share of jobs potentially at
risk during confinement ranges
from 15% to 35% across OECD
regions
Regional differences in the share
of regional employment at risk
vary by more than 20
percentage points
CFE Update: Territorial Impact of Covid-19
Some regions
have a higher
share of jobs at
risk from
containment
measures
Tourist destinations
and large cities have
a higher share of
jobs potentially at
risk in the short term
Regions with the highest share
of jobs potentially at risk, by
country
CFE Update: Territorial Impact of Covid-19
0 10 20 30 40 50 60
South Aegean - GRC
East Slovakia - SVK
Algarve - PRT
Balearic Islands - ESP
Vilnius Region - LTU
Jeju-do - KOR
Nevada - USA
Prague - CZE
Bolzano-Bozen - ITA
Île-de-France - FRA
Bucharest - Ilfov - ROU
Salzburg - AUT
New South Wales - AUS
Eastern and Midland - IRL
Adriatic Croatia - HRV
Hamburg - DEU
Stockholm - SWE
East of England - GBR
Flevoland - NLD
Copenhagen - DNK
Greater Oslo - NOR
Ticino - CHE
Pest - HUN
British Columbia - CAN
Estonia - EST
Flemish Region - BEL
South West - BGR
Greater Poland - POL
Western Slovenia - SVN
Helsinki-Uusimaa - FINAccommodation and food services (I)
Manufacture of transport equipment (C29,C30);Air transport services (H51)
Construction (F);Real estate services (L68)
Wholesale and retail trade (G)
Professional, scientific and technical activities (M)
Art, entertainment and other services (R to U)
Jobs potentially at risk (%)
SMEs are at the epicenter of the Covid-19 crisis
Over 50% of SMEs are
experiencing an increasingly
strong drop in revenue
More than 50% risk being
put of business in less than
three months
Smaller firms dominate in the
most affected sectors - 75%
of all jobs
Self-employed are hit
strongly
Share of total employment in the most adversely affected sectors by firm size (%)
5Source: OECD Annual National Accounts and Structural Business Statistics databases, OECD calculations.
OECD Economic Outlook 6
Unemployment is projected to spike to levels higher than the 2008
Projected unemployment rate, Q4 2020
Source: "Regional labour markets", OECD Regional Statistics (database)7
Employment recovery across regions from the 2008 crisis
Governments have responded mainly on short-
term measures (“act now, review later”)
Deferral of payments
and (temporary)
redundancies
2
Provision of grants
and wage subsidies
4
Health
measures and
information
1
Enhancing access
to credit for SMEs
3
Structural
Policies
5
8Gradual shift from crisis
management and rescue policies…
… To structural policies to foster
business dynamism,
competitiveness and resilience over
the longer term.
The Portuguese SME policy response was based
on deferrals
9Presentation Title
Immediate fiscal impulse Deferrals Other liquidity/ guarantees
Belgium 1.4% 4.8% 21.9%
Denmark 2.1% 7.2% 2.9%
France 4.4% 8.7% 14.0%
Germany 13.3% 7.3% 27.2%
Greece 3.1% 1.2% 2.1%
Hungary 0.4% 8.3% 0.0%
Italy3.4% 13.2% 32.1%
Netherlands 3.7% 7.9% 3.4%
Portugal 2.5% 11.1% 5.5%
Spain 3.7% 0.8% 9.2%
United Kingdom 4.8% 1.9% 14.9%
United States 9.1% 2.6% 2.6%
Selected discretionary fiscal measures adopted in countries in response to COVID-19 As of 23 June 2020, % of 2019 GDP
Source: Job Creation and Local Economic Development 2020: From pandemic to recovery
Challenges
• Lower capacity as public
and SME debt increase
• Less pressing demand as
lockdowns are gradually
lifted
• Addressing heterogeneous
needs, differentiating policy
action and reaching the
right targets (e.g. start-ups
versus family businesses,
cities vs. rural areas?)
• Urgency and speed of
policy intervention and
adaption
• Pre-existing structural
weaknesses
10
A shift in focus towards structural policiesFocal points
• More of structural policies
(skills, training, innovation,
regulatory FWK,
infrastructure)
• Supporting digitalisation,
teleworking and e-
commerce, as well as new
business models and
reconversion
• New approach to smart
specialisation and
internationalisation?
• Industrial policy in strategic
areas (automotive,
aerospace, medical/pharma.)
with focus on supply chains
& resilience
Instruments
• Smart conditionality in public
support and funding
• Gradual phasing out of crisis
measures
• Public private partnerships,
e.g. for infrastructure, data
sharing
• Taxation and smart regulation
• Competition neutrality
• Training and apprenticeship
• Insolvency regimes and
second chance for
entrepreneurs
• E-government
Source: Job Creation and Local Economic Development 2020: From pandemic to recovery
Communication & awarenessBristol and Dusseldorf have broadcast
video messages from the mayor on
social media
11
Cities are at the frontline of managing the crisis
Workplace & commutingTokyo is promoting teleworking up
to four times a week for municipal
staff to introduce flexible working
hours
Social distancing & confinementMoscow is embracing e-learning through
the "Moscow Electronic School" so that
pupils can follow their studies online.
Vulnerable groupsLjubljana organised food delivery for children
from at risk families and elderly citizens. The
Ljubljana Health Centre has ensured
psychosocial support via phone or email
Continuity of local public servicesIn Detroit, water services are to be
temporarily restored to thousands of
households previously disconnected due to
unpaid bills amid a public health outcry
Support to business
& economic recoveryMilan announced a mutual aid fund to
help those most in need and support
recovery of city activities
Policy
responses
CFE Update: Territorial Impact of Covid-19
Connecting workers to essential jobs The US National Association of State Workforce
Agencies launched a national website for
displaced workers to access COVID-19
employment opportunities
12
Managing the crisis in local labour markets
Offering access to skills The Occitanie region (France) launched a
EUR 4 million plan to “train rather than fire”
and expanded e-learning programmes
Providing direct financial
assistance to SMEsThe Basque Country (Spain) set up a 25
million EUR credit line at 0% interest to
support SME liquidity, while the government
prepares a EUR 500 million credit line.
Berlin allocated over EUR 100 million in
support of micro enterprises and freelance
workers.
Implementing partner for national
government Italian regions are responsible for
disbursing the national redundancy fund.
Navigating national programmesIn Canada,many cities help low-income
individuals, the self-employed and recently laid-
off workers to apply for the Canada Emergency
Response Benefit
Policy
responses
CFE Update: Territorial Impact of Covid-19
13
Community responses to help
deliver food & medical equipmentRural cooperatives in Italy offer free
grocery deliveries to people over 65-
years-old
Mobilising local networks of health
care workersIn Belgium, communities set-up car-sharing
initiatives in rural areas
Supporting rural business and
communitiesCommunity Futures Network provides
access to capital to rural business and
community in Canada
Ensuring basic services to rural
householdsThe ReConnect Program in the US
reconnects water and electricity to rural
households that have not fulfil payments
Improving digital infrastructuresIn Korea, initiatives support full access
to WIFI internet in rural schools and low-
income familiesPolicy
responses
CFE Update: Territorial Impact of Covid-19
Policy responses in Rural areas
Opportunities for cities and rural areas
14
Revisiting
globalisation
Increasing
preferences towards
public goods
Re-engineering
cities
Accelerating the
digital transition
• More rapid automation of jobs
• Rise in teleworking
• Online delivery of local
education and training
• Greater shift from bricks and
mortar to online commerce
• Increased need for digital
infrastructure and tools for all
communities and households
• Re-location of
production in strategic/
essential goods and
services
• Restrictions on
international
movements of people
• Diversification of
suppliers
• Increased willingness to
implement green measures, albeit
pressure to create any job fast
• Greater role for the social
economy and corporate social
responsibility in local development
• Revisiting job quality for essential
workers
• Resilient health systems
• Changes to local
spatial planning
• Rethinking cultural
and sporting events
Digitalisation can bring economic efficiency in all places
15
Raise the quality and reducing costs of service delivery (e-Health and e-Education
Attract new economic activity and connecting to new markets (e-Commerce)
Improve productivity of firms (automation, 3D printing)
Increase resilience to shocks (teleworking)
Transformation towards smart cities (smart transport systems and electric grids)
16
Regional differences are significant in high-speed
internet access
Differences are
especially wide in
Germany,
Portugal, and the
United States
CFE Update: Territorial Impact of Covid-19
Lisbon
Stockholm
Madrid
SouthernDenmark
Agder andRogaland
LiguriaÅland
RhodeIsland
Île-de-France
CentralAnatolia- East
Hamburg
Border,Midland,Western
SouthernGreatPlain
Yorkshireand
The Humber
Latvia
Lithuania
Luxembourg
Estonia
Algarve
CentralNorrland
GaliciaZealand Oslo and
Akershus
Bolzano-Bozen
SouthernFinland
Connecticut
Bourgogne-Franche-Comté
SouthernMarmara
- West
Bremen
Southern& Eastern
CentralTransdanubia
North East
-40
-20
0
20
40
60
80
100
LVA PRT LTU SWE ESP DNK LUX NOR EST ITA FIN USA FRA TUR DEU IRL HUN GBR
Maximum National average Minimum%Coverage of optical fibre
internet access in OECD
regions
Rural households have lower broadband quality
than on average
17
Just 56% of rural
households have
access to a fixed
broadband with a
minimum speed of 30
Mbps
Households in areas
where fixed broadband
with a speed of 30 Mbps
or more is available, as a
% of the total
0
20
40
60
80
100
% Rural Total
Digital skills are lower in rural areas than in cities
18CFE Update: Territorial Impact of Covid-19
Share of individuals
living in rural areas
and cities in Europe
with basis or above
digital skills (2019)
0
10
20
30
40
50
60
70
80
90
100%
Individuals living in cities Individuals living in rural areas
19
Rural areas have fewer occupations amenable
to teleworking
CFE Update: Territorial Impact of Covid-1910% 20% 30% 40% 50% 60% 70%
ESP
ITA
ROU
LVA
PRT
GRC
BEL
SVK
AUT
DEU
CZE
HUN
IRL
NLD
GBR
EST
HRV
LTU
ISL
FRA
NOR
DNK
CHE
FIN
SWE
LUX
Rural Areas Towns and semi-dense areas Cities
Teleworkability
across cities, towns
and rural areas in
European countries
But adoption of different digital technologies is
uneven
• Additive manufacturing (e.g. 3D printing)– Drastically reduces costs of small
production runs and tailor-made goods
• Autonomous vehicles (self-driving cars)– Can make a large number of professional
drivers redundant
– Can make transport much more efficient and convenient, but could also lead to congestion and sprawl with inadequate regulation
• Civic technology solutions
• Drones– Potential solution for goods delivery
• Virtual reality and augmented reality– New teleconferencing solutions
– Remote specialist consultations (e.g. in medicine, engineering, …)
– Increased adoption of teleworking
Emerging technologies could benefit low-density areas
Smaller firms are often at a disadvantage in innovation
Source: OECD SME and Entrepreneurship Outlook
2019 based on business use of ICT data.
Cloud computing adoption rate
(% of firms by size, 2018)
Source: Labour Force Survey for EU countries, Chile, Israel, Japan and Korea; Census for Australia, Canada and New Zealand; Occupational Employment Statistics (OES) Survey for the US 22
The share of middle-skill jobs has declined across OECD countries
Links between knowledge conditions and
entrepreneurship
Source: OECD Territorial Statistics and Indicators Database and Regional Business Demography Database (McCann and Ortega paper for OECD)
Italy
Austria
Belg
ium
Canada
Spain
Cz
ec
h R
ep
ub
lic
Denm
ark
Esto
nia
Fin
lan
d
Fra
nce
Germ
any
Gre
ec
e
Hu
nga
ry
Icela
nd
Ire
lan
d
Isra
el
Australia
Ja
pan
Ko
rea
Latv
ia
Lith
uania
Lu
xe
mb
urg
Mex
ico
Neth
erlands
New
Zeala
nd
No
rwa
y
Pola
nd
Portu
gal
Slo
va
k R
ep
ub
lic
Slo
ve
nia
Sw
itze
rlan
d
Sw
ed
en
Ch
ile
Tu
rke
y
United K
ingdom
Unite
d
Sta
tes
70
72
74
76
78
80
82
84
86
Demographic challenges5 main dimensions:
• Rising life expectancy
• Ageing
• Population decline
• Urbanisation
• Migration
• 57% of all OECD regions are
expected to decline in population by
2050
• Demographic shocks are going to be
very asymmetric between different
types of regions
• Automation and migration can
compensate for ageing and population
decline
Life expectancy at birth in TL2 regions
The strategic role of Multi-level Governance
A central government cannot have as many policies as different types of
cities and regions. Designing place-based policies is a too complex task
to be centralised.
But decentralisation needs to be organised as a partnership and not only
as a process of autonomy and devolution of competencies. By delegating
certain tasks central governments can be more strategic
Decentralisation works better when it is done in a process allowing for
the asymmetry of capacities at the local level and experimentation
(learning-by-doing)
To find the right scale: address governance fragmentation of
metropolitan areas, promote supra-municipal cooperation and use of
a regional level
Sources of subnational governments’ revenues, OECD 2018
0 10 20 30 40 50 60 70 80 90 100
ESTLTUSVKMEXNLDTURAUTGBR
IRLGRCBELITA
KORPOLAUSHUN
OECD27 (UWA)LUX
OECD36 (UWA)DNK
OECD9 (UWA)OECD27 (WA)
NORESP
EU28 (WA)SVNISR
PRTCHL
OECD36 (WA)CZEFIN
OECD9 (WA)JPNUSANZL
SWECANFRACHEDEULVAISL
%
Taxes Grants & subsidies Tariffs and fees Property income Social contributions
OECD (2020) Subnational governments in OECD countries: key data 2018
0 10 20 30 40 50 60 70 80 90 100
CHLIRL
HUNEST
GRCSVKNZLTURGBRLTULVAISL
LUXNOR
OECD26 (UWA)AUTSVNDNKNLDPRT
OECD35 (UWA)POLCZE
OECD26 (WA)EU28 (WA)
SWEITAFIN
OECD35 (WA)USAFRAKOR
OECD9 (WA)MEXDEUJPN
OECD9 (UWA)CHEESPAUSBEL
CAN
% of total public investment
Local government State government
State and local government Central government & social security
Share of Subnational Governments in Public investmentSubnational investment in % public investment (2018)
OECD (2020) Subnational governments in OECD countries: key data 2018
Portuguese Municipalities are relatively large
Size structure of municipalities in the OECD
3%
27%
27%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%C
zech
Rep
ublic
Fran
ceSl
ovak
Rep
ublic
Cyp
rus
Hun
gary
Spai
nU
nite
d St
ates
1Ic
elan
dC
anad
aSw
itzer
land
Aust
riaG
erm
any
Italy
Cro
atia
EU 2
8 (U
WA)
OEC
D36
(UW
A)Lu
xem
bour
gR
oman
iaN
orw
ayAu
stra
liaFi
nlan
dM
alta
Slov
enia
Mex
ico
Gre
ece
Esto
nia
Latv
iaLa
tvia
Chi
leJa
pan
Isra
elBu
lgar
iaN
ew Z
eala
ndD
enm
ark
Portu
gal
Belg
ium
Net
herla
nds
Pola
ndTu
rkey
2Ire
land
Lith
uani
aSw
eden
Uni
ted
King
dom
Kore
aLi
thua
nia
Less than 2 000 inhabitants 2 000 to 4 999 inhabitants
5 000 to 19 999 inhabitants 20 000 or more inhabitants
Well-being regional gaps – Portugal
North Metropolitanarea of Lisbon
North
Azores
Madeira
CentralPortugal
Metropolitanarea of Lisbon
CentralPortugal
Algarve
North Azores
Azores
Alentejo
Algarve
Madeira
Metropolitanarea of Lisbon
Azores
Azores
Metropolitanarea of Lisbon North
Azores
CentralPortugal
Health Access toservices
Safety Community Environment Jobs Education Housing Income CivicEngagement
LifeSatisfaction
Top region Bottom region
Ra
nkin
g o
f O
EC
D r
eg
ion
s(1
to
44
0)
top
20
%b
ott
om
20
%m
idd
le 6
0%
LisbonRegions (Comissões de Coordenação e Desenvolvimento Regional e Regiões Autónomas)
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