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BIA-Brukerstyrt innovasjonsarena

RegReSir - Regional Resilience and Sustainable Industrial Restructuring

Alternative title: Regional robusthet og bærekraftig næringsomstilling

Awarded: NOK 5.0 mill.

Project Number:

316539

Project Period:

2020 - 2022

Funding received from:

Partner countries:

The COVID crisis has created significant challenges for the Norwegian economy. This project has analyzed i) how firms, industries, and regions have responded to the crisis, ii) investigated to which extent these responses also include an acceleration of greener and more sustainable practices, and iii) examined to which extent national policy only has fostered a return to the ‘old normal’ before the crisis or if national authorities also have facilitated new and greener adaptations. Our analysis has been based on survey data (800 responses), register data (CIS-data), and case studies of selected industries, regions, and policy initiatives. The survey found that those firms hardest hit by the crisis also have the strongest response. These responses are linked to the digitalization of production processes and sales, and the reduction of costs. Only a small share of the firms responded that they had developed new green business models in response to COVID. Case studies of selected industries show that firms have been able to uphold their commitment to green restructuring during the pandemic. Still, it can be argued that this external shock is a missed opportunity for accelerating green restructuring, at least in the selected industries. Moreover, our analysis of policy responses shows that the national rescue packages during the pandemic mostly have been oriented toward helping firms through the crisis and less towards stimulating green restructuring.

The project has contributed to the academic community with new insight on industry and regional resilience, with a specific focus on the complexity of resilience, the challenges of parallel crisis, and how a sudden shock like COVID also influences more ‘long burn’ processes like the climate crisis. Our study also provides valuable and research-based inputs to policy formulation. Political authorities should be careful when designing the scale and scope of rescue packages during an intensive crisis since these initiatives have implications for other policy fields and the economy in general. Overall, they need to be (better) aligned with the policy directed towards other major challenges, such as the climate crisis and the need for a green restructuring. During COVID, national authorities have experienced how to handle a grand challenge; what to do, how to do it, and probably also, what not to do. They have also experienced the importance of a public/private partnership in order to move in the right direction. With an ongoing energy crisis in Europe, learning from COVID tells us that national authorities need to make sure that initiatives towards green restructuring are not sidelined once again due to another more urgent crisis.

The proposed project investigates the effects of the COVID-19 crisis on industrial development patterns and industrial policy in Norwegian regions. When considering the economic consequences of this crisis on Norwegian businesses, the strategic, long-term question remains whether to bounce back to the ‘old normal’, i.e. to a situation we had before the outbreak of the Corona crisis, or to use this crisis as a departure point towards a ‘new normal’. To answer this , the project maps and explains the ability of regions, industries and firms not just to bounce back (adaptation) but also their potential to bounce forward (adaptability) towards new, more sustainable development paths in terms of economically robust, environmentally friendly and socially inclusive industrial activities. Theoretically, the research builds on and adds to evolutionary economic geography to understand the uneven distribution of firm-level and regional capabilities and combines this with insights from socio-technical transition studies to understand the agentic role of firms’ innovation strategies and public policies in driving new path development. Methodologically the analysis combines large scale quantitative data on determinants of regional resilience and in-depth qualitative case studies of the uneven impacts and responses to crisis across industries and regions. The research will provide analytical tools and policy-relevant insights how sustainable and digital industry restructuring unfolds in different ways across different types of regions. Given its strategic importance for the Norwegian economy the project emphasis resource-based industries (seafood/aquaculture, maritime, offshore renewable energy technologies and bioenergy/biomaterials). Through a focus on policy experimentation we also contribute with insights for policy-making on how to shape industry and innovation policies that balance an expedient recovery with sustainable restructuring across Norwegian industries and regions.

Funding scheme:

BIA-Brukerstyrt innovasjonsarena