Building a policy relevant resilience measure: beyond the economic perspective

This chapter operationalizes regional resilience using a new approach which goes beyond standard economic dimensions. A society is defined resilient if it retains the ability to deliver well-being in a sustainable way even in the case of shocks and persistent structural changes. As the ultimate objective is the maintenance of overall societal well-being, our approach does not stop at assessing only a set of selected (economic) sectors of well-being production. It aims towards a broad structure of the system which keeps track of social inclusion, social capital and quality of life in general. We illustrate our approach by concentrating on the financial and economic crisis (2008_2012) and analyse the dynamic response of EU regions. We implement a three-step methodology to (i) select a large list of economic and non-economic indicators (‘system variables’) that span the entire process of societal well-being production, (ii) compute resilience indicators as the joint dynamic response of regions to the crisis and finally (iii) look at characteristics as those pre-determined systemic features that differentiate resilient regions from non-resilient ones. Results show that resilience is highly dependent on the time horizon: there is a clear distinction between the reaction in the immediate aftermath of the crisis and in the longer run. Moreover, they confirm the importance of expanding the measurement strategy to a broader list of variables and show a substantial heterogeneity in resilience across the regions in the European Union. Finally, they highlight country and regional features (characteristics), such as private sector credit flows and the gender employment gap, as significant predictors of resilient behaviour.