- Over half of European regions showed equal resilience in GDP and employment, suggesting the two elements are strongly linked.
- The importance of the national level can be noticed in countries such as Finland, Germany, Greece or Italy where most regions followed the same resilience tendency.
- Export-oriented, innovative and diversified regional economies performed and recovered better and became more competitive after the crisis.
- Regions highly-dependent on a single economic sector (i.e. construction, agriculture, etc.), were hit the hardest, in both employment and GDP.
Observations for policy
Export-oriented regions and especially those with a growth strategy based on modern production methods, flexible labour markets, diversified and innovative economy, such as many in Germany, Norway, the UK, the Netherlands and Belgium better coped with the crisis. On the other hand, regions highly dependent on a single sector such as construction (Spain), agriculture (southern Italy, Spain, etc.) and tourism (Greece, etc.) were not resilient either in GDP or employment. They are shown on the map as equally resilient. This suggests the need for enhanced and territorially-dispersed policies for innovation, diversification, competitiveness and trade openness. Such policies are supported by the Europe 2020 pillars of smart, sustainable and inclusive growth replicated in other policy documents.
The strong link between GDP and employment resilience is prioritised by the Europe 2020 strategy with its smart, sustainable and inclusive growth focus. Europe 2020 headline targets such as a 3% level of GDP in R&D spending, the 20/20/20 energy efficiency/renewable energy targets and flagship initiatives such as ÔÇťInnovation UnionÔÇŁ and ÔÇťA Digital Agenda for EuropeÔÇŁ aim to promote diversification and innovation in mono-sectorial regions such as many in Spain, Italy and Greece which rely heavily on construction, agriculture and tourism and which were strongly hit by the crisis. At the same time, initiatives such as ÔÇťAn agenda for new skills and jobsÔÇť within the Europe 2020 strategy, as well as the ÔÇťYouth Employment InitiativeÔÇť of the 2014 ÔÇô 2020 EU Cohesion Policy aim at reinforcing employment levels across Europe. The European Structural and Investment Funds of the cohesion policy support 11 thematic objectives, at least 4 of which directly target innovation or employment.
About half of European NUTS2 regions (in green) have similar levels of resilience for GDP and employment, and a third of them (blue) were more resilient in employment than in GDP. There are noticeable similarities in the distribution of resilience among regions in the same country. Germany is an obvious example, with most of its regions displaying stronger GDP resilience, and a noticeable East-West contrast. Countries like Italy, Greece, Hungary or Sweden display a pattern of equal resiliency between GDP and employment, suggesting that national policies may have influenced the behaviour of regional performance. This is not always the case: countries like Poland or the UK display non-uniform resilience patterns, while France or Romania have a balance between equal resilience and stronger employment resilience.
Of particular importance are the regions in which both GDP and employment were not resilient to the crisis. On the map they appear as equally resilient, and such is the case for Spain, Portugal, Italy, Greece and others. Due to their economiesÔÇÖ dependence on only a few sectors such as construction, agriculture or tourism, resilience and recovery was more difficult. Whereas, in countries or regions which are export-oriented, hosting international companies (with financial resources and expertise), rich in technology and modern production methods such as Germany, Norway, London area, parts of Poland, Belgium and the Netherlands, the impact of the crisis was not as intense, and both GDP and employment proved resilient. In such cases, GDP appears to be more resilient than employment, suggesting flexible labour markets which can adapt to demand, as well as greater labour productivity represented by more value added (GDP) with a lower or similar amount of employees.
Concepts and methods
Resilience is here defined as ÔÇťthe ability of a regional economy to withstand, absorb or overcome an internal or external economic shockÔÇŁ. A territory is considered resilient if, by 2011, its level of employment (or GDP) is equal to or larger than pre-crisis peak levels. When combining the resilience of both employment and GDP, the result is given by the gaps between persons employed and GDP levels in 2011 and their peaks before the crisis. Regions showing similar resilience between GDP and employment can either display good or bad overall resilience. It might be that both GDP and employment dropped or rose, therefore they are shown as similarly-resilient.