What should local economic developers be doing in response to the emerging global economic crisis?

𝙏𝙝𝙚 𝙜𝙡𝙤𝙗𝙖𝙡 𝙚𝙘𝙤𝙣𝙤𝙢𝙮 𝙞𝙨 𝙜𝙤𝙞𝙣𝙜 𝙩𝙝𝙧𝙤𝙪𝙜𝙝 𝙖 𝙘𝙧𝙞𝙨𝙞𝙨.

I’ve closely monitored three major recessions in my career now. The main things to remember are:

– Don’t rely on official statistics to define and inform the economic picure so much as they lag behind current event by quite a stretch. Look at leading indicators (PMIs, payrolls, vacancies, business confidence surveys). During crises, things change fast.

– Stock markets represent investor sentiment on a daily basis. They can signal shocks, but on their own can’t inform us about the local economic impact until there is some long-term trend or view.

– Some sectors and businesses contract; others keep going or thrive. You need to be able to help both sets. People and businesses still need products, goods and services. Keep them flowing.

– In previous recessions credit, cashflow, and insurance (in 2009 for retail suppliers) were very important. Keep monitoring these.

– Pivot enterprise support. Financial advice to businesses helps them manage better through the crisis.

– There can be big changes in consumer preferences, business suppliers, business and market models.

– Grants that provide stimulus or accelerate change (e.g. energy efficiency or digitalisation) work well.

𝘼𝙨 𝙡𝙤𝙘𝙖𝙡 𝙚𝙘𝙤𝙣𝙤𝙢𝙞𝙘 𝙙𝙚𝙫𝙚𝙡𝙤𝙥𝙚𝙧𝙨, 𝙬𝙝𝙖𝙩 𝙙𝙤 𝙬𝙚 𝙣𝙚𝙚𝙙 𝙩𝙤 𝙙𝙤 𝙤𝙫𝙚𝙧 𝙩𝙝𝙚 𝙣𝙚𝙭𝙩 𝙛𝙚𝙬 𝙬𝙚𝙚𝙠𝙨 𝙤𝙧 𝙢𝙤𝙣𝙩𝙝𝙨?

𝗖𝗼𝗻𝘃𝗲𝗻𝗲 𝗮𝗻 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗿𝗲𝘀𝗶𝗹𝗶𝗲𝗻𝗰𝗲 𝗯𝗼𝗮𝗿𝗱. During the Covid-19 pandemic, these were a really useful forum to bring partners and interest together.

𝗚𝗲𝘁 𝗿𝗲𝗴𝘂𝗹𝗮𝗿 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗶𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝘂𝗽𝗱𝗮𝘁𝗲𝘀. During the Covid-19 pandemic, I was briefing 6 localities on a weekly basis. This involved analysis of breaking data, news, and what it meant for each locality.

𝗞𝗻𝗼𝘄 𝘆𝗼𝘂𝗿 𝘁𝗿𝗮𝗱𝗲𝗮𝗯𝗹𝗲𝘀. Knowledge of the main exporting firms, particularly large or strategic employers is vital. It is almost inevitable that they will face changes, so help them through these.

𝗞𝗻𝗼𝘄 𝘄𝗵𝗶𝗰𝗵 𝗶𝗻𝗽𝘂𝘁 𝗳𝗮𝗰𝘁𝗼𝗿𝘀 are the most sensitive to international changes.

𝗠𝗼𝘀𝘁 𝗺𝗮𝗷𝗼𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗮𝗻𝗱 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲𝘀 𝘁𝗮𝗸𝗲 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀 𝗼𝘃𝗲𝗿 2-𝟱 𝘆𝗲𝗮𝗿𝘀. It’s unlikely they will respond to calls to “reshore” manufacturing to the US in the short run. These are large-scale, significant investments over long-timescales – at least 5 years.

At this stage, its critical to understand your locality’s vulnerabilities, any major business decisions or changes that occur locally, and convene stakeholders and leaders who can act rapidly. There may be opportunities that emerge too, but for the moment we are in crisis monitoring mode.