RSP 029
RSP 029
doi:10.1093/cjres/rsp029
Advance Access publication 6 January 2010
In this paper, we review the different definitions of resilience and their potential application
in explaining the long-term development of urban and regional economies. We reject equi-
librist versions of resilience and argue instead that we should seek an understanding of the
concept from an evolutionary perspective. After discussing a number of such perspectives,
we focus on the adaptive cycle model from panarchy theory to generate testable hypotheses
concerning urban and regional resilience. Two case study city-regional economies are used
to explore this model. We conclude that the evolutionary adaptive cycle model, though not
without problems, warrants further study as a framework for analysing regional economic
resilience.
Ó The Author 2010. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.
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Simmie and Martin
recent emergence as an analytical concept there is, et al. (2008, 4) see resilience as ‘‘the ability of a re-
as yet, no universally agreed definition of resilience gion . to recover successfully from shocks to its
in economics or social science, let alone in regional economy that either throw it off its growth path or
or urban studies. In fact, some even contest the have the potential to throw it off its growth path’’.
value of the notion of resilience altogether (Hanley, But beyond these rather broad statements, there
1998). Some initial studies have recently appeared is much ambiguity. For one thing, should the notion
that attempt to outline how the idea of resilience refer not just to a regional economy’s ability to re-
might be defined in economics and in regional stud- cover from a shock but also to the degree of resis-
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The economic resilience of regions
without experiencing major structural transforma- reconcile the notion of resilience with the idea of
tion or collapse (McGlade et al., 2006). Under this regional economic evolution. The implication is
definition, therefore, regional economic resilience that the more resilient is a regional economy, the
would imply the retention of the region’s pre-shock less it would change over time, even in the face of
structure and function. The problem is that view various shocks. So, at best, this view of resilience
carries with it the baggage of equilibrist thinking. would yield an evolutionary model based on the
Indeed, the notion of engineering resilience bears maintenance of structure and stability.
a close affinity with the standard use of equilibrium The second definition, so-called ‘ecological resil-
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imply that the bigger the shock required to change systems—national, regional or local—evolve? In-
a system’s structure and function, the more resilient deed, are urban and regional economies ever in
that system would be deemed to be. So, again, a re- any equilibrium? While ecological systems if left
silient regional economy would be one capable of undisturbed may, perhaps, attain equilibrium or sta-
absorbing and accommodating extreme shocks ble states, economic systems are arguably different.
without any significant change to its form or func- Economic evolution depends on the actions of in-
tion: we seem to be back to engineering resilience. dividual economic agents, who can learn, innovate
It is difficult to see how this view of resilience and adjust their behaviour. For this reason, some
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The economic resilience of regions
evolves as well as how its resilience impacts back better adapted. One is the intentional response to
on that economy’s evolution. the perception of circumstances; a second is homeo-
Recently, some resilience theorists have begun to static, the automatic following of specific rules in
move closer in this direction of an evolutionary relation to target behaviours and a third is develop-
perspective and to consider the nature of constantly mental, the cumulative unfolding of new behaviour
changing non-equilibrium systems (see Carpenter patterns (such as innovation) within a specific set of
et al., 2005). Here resilience is considered as an constraints.
ongoing process rather than a recovery to a (pre- Variety might be expected to influence regional
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Simmie and Martin
this path (in David’s work, such a path is assumed on, the emergence of new technologies and indus-
to be one of a number of possible multiple equilib- tries. This might arise, e.g., because the specific
ria). So one interpretation might be that a regional inherited knowledges and resources are not easily
economy is resilient if it is able to maintain its recombined or converted into new competences
‘locked-in’ development path even when disturbed (Maskell and Malmberg, 2007) or because of their
by an external shock of some kind: lock-in is thus previous success, existing industries have bid up
seen as a positive attribute of a regional economy. local land rents, prices and wages to levels that deter
This is akin to the notion of engineering resilience new entrepreneurial activity (Brezis and Krugman,
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The economic resilience of regions
Certain implications are claimed to follow from of local firms, on entrepreneurial capabilities and
these features. Of particular relevance to the idea of new firm formation, institutional innovation, access
regional economic resilience is the argument that to investment and venture capital, willingness of
complex adaptive systems are characterised by workers to reskill and similar factors.
two conflicting tendencies: on the one hand, there The adaptive cycle model applied to a regional
is tendency in such systems towards increasing con- economy might take the form shown in Figure 2.
nectedness and order (or interrelatedness) among The cycle has two loops: one relating to the emer-
system components; but, on the other hand, increas- gence, development and stabilisation of a particular
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a shock occurs, structural decline and loss of cesses and on shorter term more microscale processes
growth momentum are likely to follow. Firms close and on how these interact. For example, a failure of
or move out of the region, the degree of connect- a region’s workforce to upgrade its educational at-
edness declines and agglomeration of localisation tainment and skill levels may hinder the local emer-
economies lose their impact. Old patterns of pro- gence of new firms orientated to new technologies
duction and institutional form unravel and resour- and new types of worker. In addition, conditions in
ces are released. This opens up the possibility for the national economy can affect those in regional
a second release–reorganisation loop, characterised economies. A national recession can adversely affect
by innovation, experimentation and restructuring, conditions in different regional economies. Or again,
as new types of activity begin to emerge. Connect- national policies to promote entrepreneurship and
edness is low, the potential for the creation of new new business formation can impact on a locality’s
paths high, the trajectories of development open, economic structure. And of course competitive pres-
and thus resilience high. As the particular forms sures or knowledge transfers originating at the
of new activity and new technologies are exploited, international and global levels can stimulate local
new comparative advantages develop and a new economic change. So local variety and novelty can
round of regional growth and accumulation is set be generated by processes operating at a whole range
in motion. of spatial scales.
A further, interesting feature of complex systems The panarchy model of adaptive cycles is obvi-
under this panarchy model is linkages across scales— ously highly suggestive. It has the advantage of
across both time and space—through two principal linking key attributes and processes of regional de-
mechanisms. Larger scales affect smaller ones (akin velopment, such as innovation, the dynamics of
to downward causation or ‘supervenience’ in some capital accumulation and the mechanisms that gen-
theories of emergence in complex systems), with lon- erate connectedness between and among local firms
ger term, region-wide processes and features (such as and institutions, with the notion of resilience and of
local government, the region’s educational system, emphasising the need to examine how the processes
physical infrastructures, etc.) shaping if not deter- and mechanisms at different scales. But the model
mining interactions and outcomes at smaller scales is not without limitations and unresolved problems.
(i.e. at the firm level). But smaller scales also act It is important to remember that the model was de-
back on larger scales, particularly during the release veloped to analyse ecological systems, the evolution
phase. The resilience of a regional economy thus of which may well be adequately conceptualised as
depends both on the longer term, region-wide pro- long periods of stability, even stasis, interrupted by
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The economic resilience of regions
major external shocks. Is this a reasonable concep- in these two city regions (defined in terms of travel-
tualisation of how regional economies evolve? to-work areas) from the 1960s until the late-2000s
Regional economies consist of collections of agents (see Table 1), and attempt to categorise these
and institutions that learn and can change their be- changes and developments into the four phases
haviour even in the absence of major shocks or dis- postulated by the panarchy model summarised in
turbances. Further, the adaptive cycle approach to Figure 2. Over this time, the high-tech economy
understanding resilience implies that regional eco- of Cambridge developed through what can argu-
nomic development has an ineluctable, inner logic: ably be identified as three phases of the adaptive
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Table 1. Adaptive cycles in the Cambridge and Swansea city region economies, 1960–2005.
Cambridge Swansea
materials and more efficient production processes In Cambridge, the 1970s saw the continuation of
elsewhere. The closures released a pool of low- reorganisation with the establishment of several
skilled, low-wage labour onto the local labour new high-tech enterprises and the emergence of
market. an identifiable high-tech cluster. The first company,
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The economic resilience of regions
Laser-Scan, moved onto the new Trinity College cession, manufacturing employment in Swansea
science park in 1973, and by the end of the showed no signs of regaining its pre-1980 level.
1970s, the reorientation of the Cambridge economy The shock of the early-1980s recession exposed
around high-tech activity was well underway, with the different nature of adaptation and resilience in
some 30 companies located on the park. They were the two case study economies. The steady market-
mainly based on IT activities, specifically electronic led development of innovation, high-tech small and
equipment and instruments. The 1970s also saw the medium sized enterprises and early cluster devel-
Swansea economy beginning to embark on a phase opment in Cambridge over the 20 years from 1960
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Figure 5. Manufacturing employment growth paths in the two city regions, 1980–2008.
Source: Cambridge Econometrics.
plants became locked into the technologies distrib- gidity in an industry driven globally by rapid tech-
uted to them by their Japanese-owned parent com- nological change, which in the case of Swansea’s
panies. Although this marked a temporary period of production plants was in the companies’ research
stability, it was also characterised by increasing ri- laboratories located back in Japan. This local
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The economic resilience of regions
technological lock-in and external dependence re- permanent. And the slowdown in service employment
duced the resilience of the local economy and soon growth during the recession continued until the late-
proved fatal to the survival of the consumer elec- 1990s. Only then did steady growth in this sector take
tronics industry in the Swansea area. The run up to place (Figure 6). In Cambridge, although the reces-
the 1991 recession saw the international demise of sion halted the rapid expansion in service jobs that
both cathode ray tube (CRT) technology-based tele- occurred over the 1980s, the interruption was short
vision and VCR-based recording devices. Sony lived, and from 1992 onwards, the economy resumed
closed one of its Swansea plants, moving produc- strong employment growth in this sector.
Figure 6. Service sector employment growth paths in the two city regions, 1980–2008.
Source: Cambridge Econometrics.
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Simmie and Martin
as many as 20,000 people. There is some sign, how- omy to adapt to these changes was hampered by lock-
ever, that this phase of exploitation, rapid expansion in to a culture of industrial subsidies dependency and
and accumulation of high-tech assets, may possibly an expectation of lifetime employment in traditional
have come to an end and that local high-tech devel- industries. This combination proved too difficult to be
opment may have entered a conservation phase of overcome by free market adaptations. Instead it has
distinctly slower growth. Both the rate of new firm required intervention by the Welsh Assembly Gov-
formation and the rate of innovation have slowed ernment (WAG) to develop a public strategy to move
appreciably since 2000, and local business leaders Wales (and Swansea) up the value chain, by focusing
and associations have expressed repeated concern development on the knowledge economy.
that the cluster seems to have lost its momentum. Since the end of the 1990s, in line with this wider
The Swansea economy fared much less well fol- regional strategy, a new attempt to reorganise the
lowing the early-1990s recession. The flow of FDI Swansea economy has been underway, initially based
that had begun to provide the possible basis for on the provision of start-up incubator and support
a new phase of exploitation and growth ceased units, an initiative called Technia, in partnership with
and promised additional arrivals of overseas invest- the Welsh Development Agency (now incorporated
ments, such as that by the electronics giant LG, did into the WAG) and Swansea University. The imple-
not take place. It is arguable whether the economy mentation of this strategy has been slow, however,
ever embarked on a secure or sustained path of and the first Technium was not opened in Swansea
exploitation and growth based around a new con- until 2001. There are currently a total of nine across
sumer electronics industry. Rather, it would seem Wales. Their aim is to provide infrastructure and busi-
that this potential development path failed before it ness support to new innovative companies and to pro-
really took off, and as a result the economy moved vide space for them to develop their ideas and grow
quickly to a further phase of release and decline. into successful knowledge-related businesses. The
The FDI withdrew and the ability of the local econ- scale of each Technium is quite small. Each of them
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The economic resilience of regions
contains around only 10–12 firms. How resilient the appear to have gone through only three phases
two city region economies will prove to be to the deep suggested by adaptive cycle model: reorganisation,
recession of 2008–2009 remains to be seen. exploitation and possibly the onset of conserva-
tion. It arrived at each of the two major recessions
covered by this study having developed its resilient
Summary and conclusions capacity over the preceding one or two decades.
In this paper, we have sought to review and ana- The long-term development of adaptive and resil-
lyse the concept of regional economic resilience. ience capacities in Cambridge were driven by the
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The economic resilience of regions
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Martin, R. L. (2010) Roepke lecture in economic nomic resilience to disasters: a computable general
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