ECR2 – Economic Crisis: Resilience of Regions

Applied Research Project

Lead Partner: Cardiff University

Project Partners: Aristotle University , Experian Plc , Gdansk University , HTWK-Leipzig, Manchester University , Tartu University

Regions analysed in detail: Country Region Nuts Level

Germany Stuttgart/ Baden-Württemberg

3/2

Finland Uusimaa 3

Poland Pomorskie 2

Estonia North Estonia 2

Greece Western Macedonia 2

Ireland South West Ireland 3

Italy Puglia 2

UK Wales 1

About the project

Main question and definitions of the project research

Resilience is understood as the ability of a system to ‘bounce-back’ or return to its pre-shock position.

Why some regions prove to be more able to withstand economic shocks than others, and what influences their ability to recover?

Economic resilience is defined as the ability of a region to avoid a fall in economic activity or to regain pre-crisis peak levels of two principal indicators: employment and GDP

Definitions:

Main research question:

Categories of the identified regions

• Two categories of resilient territories: - those that resisted the crisis (RS) - those that recovered from the crisis (RC)

• Two categories of regions that were not resilient to the crisis: - those that have begun their recovery, but where employment

or GDP has not yet returned to pre-shock levels (NR1) - those that remain in decline (NR2).

Distribution of regional economic resilience (NUTS 2, peak year to 2011) - Employment

Distribution of regional economic resilience (NUTS 2, peak year to 2011) - GDP

The foundations for resilience

Business People

Place Community

Resilience

A divers innovative,

modern, business base

A well-skilled population

operating within flexible market arrangements

Urban areas tend to be more

resilient than more remote

locations

Social capital plays important

role in mediating resilience impact

Quality of governance has a crucial impact on

resilience

European Quality of Government Index

Source: Charron N., Dijkstra L., Lapuente V., 2013

National-level scores, rankings and cluster groupings of quality of government in the EU-27

QoG score shows the combined averages of the four standardized pillars of QoG from the World Governance Indicators (WGI) :• control of corruption• rule of law• government effectiveness• voice and accountability (impartial

public services)

Sources of data: Transparency International’s Corruption Perception Index (CPI), the InternationalCountry Risk Guide (ICRG), the World EconomicForum’s business leader survey on corruption and bureaucratic effectiveness and other sources

Regional resilience is conceived as a place-based capacity shaped both by a territory’s inherited resources and structures, as well as its people and the agency of its individuals, businesses and other organisations

Regional or national resilience policy

However, countervailing tendencies were observed in the studied cases; the crisis had led to a reduction in the emphasis attached to spatially-informed policies, with attention instead focusing on national economic priorities with limited consideration of the spatial consequences of this

Monetary and fiscal EU policy responsesThis has mainly reuslted in the imposition of austerity measures, that has resulted in

public sector pay freezes and job losses, reductions in public expenditure and investment and an increase in indirect and direct taxation and other charges for the provision of public services

Monetary and fiscal national and supranational policy context

Polish fiscal policy measures of relatively autonomic domestic financial markets

− anti-cyclical fiscal policy introduced by the government;− monetary policy - reducing the interest rates;− maintaining liquidity in the banking sector;− facilitate the running business - non-cost suspending; business, lowering number of required concessions, simplifying the accounting procedures, deregulation of professions and labour code

There is no single path to a resilient economy

Different paths to a resilient economy:

• high path charcterised by the presence of the strong urban centres, innovative firms and a skilled population

• low path characterised by the presence of the more traditional economies based on production sector

Resilience is shaped by the ability to learn and the ability to adaptThe significance of learning from past events was a consistent message across the

cases studied for this projectThe extent to which sub-national governments have the capability to act, not just the

capacity, is a key issue

The foundations of resilient economies are formed many years prior to an economic shock

The case studies demonstrate that it is policy decisions taken in the years and even decades prior to a shock that shape the capability of the region to respond to the shock itself

Policy lessons from the crisis

Recommendations for the future

Recognition should be given to the importance of high quality governance arrangements in promoting more resilient economies

Building resilience capabilities is a long-term process, that requires the development of shared agendas;

There may be a trade-off between longer-term resilience agendas and short-term growth objectives

Thank you for your attention