Coronavirus has shaken our world as we knew it. In a short period of time our daily life has been totally revolved with a strong impact on our wellbeing, economy, social patterns, environment and even beliefs and values. The different characteristics of this crisis as compared to previous economic-financial crises as mentioned by Aranguren and Navarro, require a coordinated and global response in the emergency phase, although there is still some room for regions and cities (see also Albizu and Estensoro’s reflection) for adapting some measures to territorial specificities. In that realm, we have noticed how regions are contributing with their own initiatives to the national centralised responses, such as the Basque support measures to SME’s during this resistance phase. These measures are mainly directed to guarantee the survival of companies, to try not to lose as much jobs as possible, to reinforce social wellbeing and in summary, to facilitate a fast recovery. The question here would be: recovery towards which path? The answer is not easy but needs to be built upon several features that can be identified from our knowledge from previous crises and that I will summarise in two: the ability to react and adapt; and the ability to renew from and prevent future crises. More resilient regions will be the ones that provide a better combination of these two abilities

  • The ability to react and adapt to the new context: Every crisis is originated by a shock. But of course, there are different types of shocks. We can differentiate among emergencies, such as this one originated by a pandemic situation, macro-economic and financial disturbances or structural changes in the economy (i.e. de-industrialisation processes). The resistance phase is determined by the scale, nature and duration of the shock. As previously commented, COVID-19 as a shock is global and systemic in nature, as it combines a health emergency with an economic emergency and measures taken have been directed to shorten the duration of the shock’s impact and facilitate a fast recovery. These measures are the ones that need a greater coordination and mainly rely on national and supra-national institutions.
  • The ability to renew from and prevent new crises: Without denying the importance of reactive measures in the resistance phase, this ability should be also reinforced since the very beginning for assuring a fast and sustainable recovery. Here we focus on the ability of regions to renew from the shock situation, which implies to reorganise previous activities and actors’ relationships and even to re-orientate them, by generating new activities. Territories that demonstrate this ability will show not only greater positive impacts on regional development and wellbeing, but also a lower vulnerability and exposure levels to shocks in future crises. The question here is how to develop this ability and how can be applied to this specific crisis. What we learnt from previous crises is that this ability depends on different mechanisms from which I would highlight two that are interconnected: the regional economic base and the institutional arrangements.

Imagen post Edurne ENG I Source: Evenhuis (2017)

Economic base: despite its global impact the COVID-19 crisis has showed different impacts in sectoral activities. The so-called foundational economy, those sectors that provide basic services, such as food, energy or health assistance, have gained importance while sectors more dependent of social mobility (i.e. tourism) or international trade (i.e. industrial sectors dependent on global value chains) have been more affected. In addition, knowledge intensive activities (consultancy, R&D, etc.) or higher-technology companies have been able to adapt better to the new situation, in which digital technologies play a key role. Therefore, regions that diversified in the past and promoted related variety processes based on innovation, are now on a better position to resist and recover from this crisis. An additional effort will be needed to renew and re-orientate the existing sectors, considering the windows of opportunity that will emerge from this crisis. A stronger emphasis on R&D and innovation would promote related variety and entrepreneurship in certain high added value activities leading to renewal and reorientation processes. In the Basque Country, energy related activities, health and bioeconomy or food sectors could be areas in which develop new opportunity niches in the post-COVID era.
Institutional arrangements: related variety and innovation are two ingredients of the so-known Smart Specialisation Strategies (S3 or RIS3) that constitute the current development path in European regions. COVID-19 crisis could be taken as a driver for adopting a more challenged focus of RIS3 in regions by promoting related variety and new niches development towards societal challenges. Climate emergency, for example, will remain as one of the biggest global challenges, despite of the positive impact of the coronavirus in the short term, and efforts in this direction will shape our ability to cope with it. In addition, an important learning from this crisis (but also from previous ones) is that collective agency and collective behaviours make a difference. The Basque Country has a long story in public-public, public-private partnerships and strong collaboration mechanisms, so the depart situation for this new era should not be built from scratch but taking the best for what already shaped current Basque resilience.
In short, the speed and quality in both quantitative and qualitative terms of the recovery is of course conditioned by the short-term measures implemented during the resistance phase, but also by the measures oriented towards regional renewal and reorientation.

edurne magro

Edurne Magro

Edurne Magro is a Senior Researcher at Orkestra-Basque Institute of Competitiveness. She holds a Ph.D. in Business Competitiveness and Economic Development with a European Mention from the University of Deusto, after having spent time at the Manchester Institute of Innovation Research of the University of Manchester, United Kingdom. She holds a degree in Business Administration and Management and has a Master in Innovation and Technology Management from the University of Deusto..

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