This is a presentation by Tom Griffiths at the RUSI Resilience Conference 2014.

1. Economic Resilience & Local Growth
Tom Griffiths - Deputy Director, Regional Growth Directorate
Department for Business Innovation & Skills
November 2014

2. What is economic resilience?
Significant, emerging body of academic work dedicated to
defining it and understanding drivers, implications
However, concept “lacks clarity and consensus” (Martin et al)
Broad version: “the ability to recover from or adjust to the
negative impacts of external economic shocks” (Briguglio, 2008)
1
Periods before, during and
after the shock are of interest
Shocks include – disasters,
economic shocks (including
business cycles), longer term
change

3. What is economic resilience?
Economic resilience not an explicit policy objective – but perhaps
a question of terminology? i.e. rebalancing, sustainable growth
The alternative perspective; where is the current policy focus, and
how does this relate to economic resilience?
In policy terms helpful to make the following distinction;
1
i) Resistance – pre-emptive measures to reduce or eradicate
exposure to future shocks
ii) Recovery – reactive measures to mitigate short run
adjustment costs and long run (hysteresis) effects of shocks

4. Economic resilience and local growth theory…
Several alternative models of sub-national growth, with different
possible implications for resilience…
Convergence theory – implies no long run costs to shocks?
Spatial heterogeneity - resilience likely to differ by place, path
dependency important, role for intervention?
2
New Economic Geography – sorting of firms and people; market
will find optimal configuration post-shock
Agglomeration – clustering of activities may increase exposure to
external shocks?

5. Economic resilience in practice…
Local differences in recovery speeds for employment relative to the early- 1990s recessionary shock in four LEP areas
Differential experience of
1990s recession; in terms of
timing, “fall” and “recovery”
Some places recovered
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Source: IPPR/Martin et all, 2013
quickly and accelerated
(GCGP, Oxfordshire)…
Others suffered prolonged
recession (Black Country,
Liverpool) underpinning long
run divergence

6. Economic resilience in practice…
Financial crisis and the employment rate, LEP-level 2008-2014
Change in Employment Rate (ppts) 2008-2014
0.0
1.0
2.0
3.0
4.0
Black Country
Cheshire and Warrington
Coast to Capital
Cornwall and Isles of Scilly
Coventry and Warwickshire
Cumbria
Derby, Derbyshire, Nottingham
…
Enterprise M3
Greater Birmingham and Solihull
Greater Cambridge & Greater
…
Greater Manchester
Heart of the South West
Hertfordshire
South East
Leeds City Region
Leicester and Leicestershire
Greater Lincolnshire
Liverpool City Region
New Anglia
North Eastern
Oxfordshire
London
Sheffield City Region
Solent
South East Midlands
Trent and Staffordshire
Tees Valley
Thames Valley Berkshire
The Marches
West of England
Worcestershire
York, North Yorkshire and East
…
Lancashire
Gloucestershire
Humber
Dorset
Swindon and Wiltshire
Northamptonshire
Buckinghamshire Thames Valley
2
Source: Labour Force Survey/nomisweb
We are still observing the effects of 2008/9 financial crisis…
…but little obvious pattern in terms of North versus South, urban versus rural
-5.0
-4.0
-3.0
-2.0
-1.0
Stoke-on-2008

7. Economic resilience in practice…
Employment rates and financial crisis:
comparing pre-recession LEP peak to the "fall"
R² = 0.0046
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
60.0 65.0 70.0 75.0 80.0
Change from pre-crisis peak to trough (ppts)
Pre-crisis peak employment rate (%)
R² = 0.0334
5.0
4.0
3.0
2.0
1.0
Change
from trough to 2014 (ppts)
Employment rates and financial crisis:
comparing LEP "fall" and "recovery"
2
-6.0
-7.0
pre
Source: Labour Force Survey/nomisweb
0.0
-7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0
Change from pre-crisis peak to trough (ppts)
Did a strong labour market insulate
against the crisis?
No, pre-recession employment rate a
poor predictor of the “fall”
Is there evidence of bounceback?
No, little correlation between depth of
“fall” and extent of “recovery”

8. A broad range of factors influence resilience…
Physical – infrastructure, land,
environment
Human – skills, enterprise,
knowledge base
3
Institutional – governance, finance,
public policy, engagement
Structural – technology, sectoral
diversity/specialisation

9. Conceptualising the current policy landscape…
National
Industrial Strategy
National
Infrastructure Plan
Decentralisation
and devolution
Fiscal policy (auto
stabilisers)
Welfare payments
Job Centre Plus
4
Resistance
LEPs/Growth Deals
City Deals
GPF, EZs RGF
European Funding
Industrial Closure
Taskforce
Riot Relief Fund
Flood Relief Fund
Recovery
Local

10. The future local growth policy landscape…
Making it real - delivering on existing commitments, initiatives
and Deals, many influencing economic resilience
Further decentralisation and devolution – cross-party momentum,
opportunity to embed a locally-led approach to resilience
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Further Deals, working with local partners to build capacity
Learning about what works - including promotion of economic
resilience