The concept of resilience has long been understood in a human context as an ability to bounce back; to withstand and adapt to changing conditions.
In a scientific context, resilience refers to elasticity or the capacity to spring back into shape following the application of external forces. The idea of being able to withstand and recover from an external shock or impact is foundational to resilience.
Resilience is a performance indicator
More recently, businesses and communities have begun to evaluate their performance using resiliency as an indicator. Resiliency in this context refers to the ability to adapt and cope with disasters, crises, and stresses without succumbing to major disruptions or setbacks.
Most often, resilience is considered in the context of natural disasters or cyber threats. The extent to which a business can prepare for and quickly recover from the disruption caused by a cyber threat or the extent to which a community can withstand and bounce back from severe weather events, for example, are seen as important contributors to long-term stability and resiliency.
Resilience for EDOs
Resilience isn’t only important to private business and municipalities, however. It matters for Economic Development Organizations too. Economic Developers have an important role to play in supporting the resiliency of a community’s economic base.
Establishing economic resilience in a local economy requires the capacity to anticipate risk, the ability to evaluate how that risk may impact key economic assets, and the skill to build responsiveness. Typically, shocks or disruptions to the economic base happen in one of three ways:
- Downturns or other significant shifts in the national or global economy which impact demand for locally produced goods and consumer spending;
- Downturns in specific industries that comprise a significant component of the region’s economic activity; and/or
- Other external shocks such as disasters, exit of a major employer, or the impacts of climate change, etc.
The importance of building resilience
Building resilience in this case demands an ability to identify any weak spots that must be addressed such as an over-dependence on a single industry or an untrained workforce, for example. It requires an intentional focus on preparing for potential disruptions by addressing those weak spots and building flexibility into planning.
Much has been written about enhancing Economic Resiliency within communities. There are a number of training programs that have been developed to guide communities across North America in building stronger Economic Resiliency through collaborative approaches to planning and preparation.
For EDO’s, however, little attention is given to building and maintaining the resiliency of the economic development function itself. While EDO’s are not immune to natural disasters in the jurisdictions they serve, they are more likely to be bruised and buffeted by the winds of political change than weather.
These are the political storms that can wreak havoc on existing policy and the shifting tides that sway allegiances and wash away funding structures overnight.
Most of us have at least a passing familiarity with mitigating risk in an organizational context. We back up our servers. We cross-train employees. We don’t let the entire IT team go on vacation all at the same time. But what are we doing to evaluate and prepare for the risk imposed by external influences?
- Have we identified all of the moving parts that support our value proposition, for example?
- Do we understand all of the policy and program interdependencies that support our abilities to attract jobs and grow business?
- How much of what we do is vulnerable to a shift in policy or political whim?
Political winds and storms
We have all witnessed policy shifts that have changed the course of a major project by either strengthening or weakening an investment proposition. We’ve seen highly effective programs succumb to partisan politics to the detriment of our business communities.
We’ve learned how to pivot when a change in political priorities requires a shift in focus from one industry or sector to another. It’s that ability to react, respond and pivot that makes an economic development organization resilient.
Allocate resources to protect identified risks
While it absolutely makes sense for EDO’s to be opportunistic in showcasing their advantages, it is important to understand which of those advantages are transitory and subject to change.
When communities plan for resilience, they evaluate which elements of community operations are most important to protect to ensure continuity of services and minimal disruption. Resources are allocated accordingly to protect against identified risks and mitigate the impact of disruption or disaster.
The same is true in an economic development context. A comprehensive risk assessment is paramount to an EDO’s ability to adjust, pivot, and / or bounce back as challenges are encountered. A risk assessment of the economic development function starts with an examination of the various components that make up a value proposition and asking, ‘What happens if this important advantage goes away?’
The same principles that support economic resilience apply to building organizational or functional resilience. Understanding which services; which incentive structures; which key messages may be vulnerable to policy or program change can be as important as planning for significant macroeconomic shifts and natural disaster.
An EDO that is fighting for its own existence will be challenged to guide a community through crisis. By turning the resiliency lens inward, however, and addressing institutional vulnerabilities, organizations can build their capacity to stay the course when the wind inevitably changes.