ECR2 – Economic Crisis: Resilience of Regions

1. ECR2 – Economic Crisis: Resilience of Regions Applied Research Project

2. About the project Lead Partner: Cardiff University Project Partners: Aristotle University , Experian Plc , Gdansk University , HTWK-Leipzig, Manchester University , Tartu University Regions analysed in detail:

3. 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. Main research question: Why some regions prove to be more able to withstand economic shocks than others,and what influences their ability to recover? Definitions: 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

4. 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-shocklevels (NR1) - those that remain in decline (NR2).

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

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

7. The foundations for resilience Quality of governance has a crucial impact on resilience A well-skilled population operating within flexible market arrangements Adivers innovative, modern, business base Business People Resilience Place Community Social capital plays important role in mediating resilience impact Urban areas tend to be more resilient than more remote locations

8. European Quality of Government Index Source: Charron N., Dijkstra L., Lapuente V., 2013

9. National-level scores, rankings and cluster groupingsof 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 International • Country Risk Guide (ICRG), the World Economic • Forum’s business leader survey on corruption and bureaucratic effectiveness and othersources

10. Regional or national resilience policy 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 However, countervailing tendencies were observed in the studiedcases; 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

11. Monetary and fiscal national and supranational policy context Monetary and fiscal EU policy responses This 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 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

12. 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

13. Policy lessons from the crisis Resilience is shaped by the ability to learn and the ability to adapt The significance of learning from past events was a consistent message across the cases studied for this project The extent to which sub-national governments have the capability to act, not just the capacity, is a keyissue The foundations of resilient economies are formed many years prior to an economic shock Thecase 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

14. 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

15. Thank you for your attention