Our state, nation, and the globe are facing an unprecedented challenge associated with the COVID-19 pandemic. While addressing the public health aspects of this crisis is paramount, we must begin immediately working on how we can protect and respond to this challenge economically.
Several years ago, my graduate thesis was on the theory of regional economic resilience. At the time, and even today, this was an underdeveloped area of economic theory. What makes a region economically resilient? How do you define and measure such resilience? And most importantly, what are the policy choices that can help a region be insulated from and respond to the impacts of an economic shock?
After looking at the top-100 metros in the United State in the aftermath of the great recession, the key takeaways are:
- A region's ability to both absorb an economic shock andrebound from it define resiliency. It’s not just how well you take the punch, it’s how your respond.
- The relative health of a regional economy at the beginning of a shock was paramount.
- A diversified, export-based economy is critical.
- Public policy has a direct impact on resiliency.
Now the current state of affairs is well beyond analytics and academics. It’s time for action. I appreciate former Governor Huntsman's thinking on the issue this morning, and am deeply encouraged that the Utah Coronavirus Task Force, led by Governor Herbert and Lt. Gov. Cox, will immediately be convening an economic working group with the leadership of Natalie Gochnour of the Kem C. Gardner Institute, Theresa Foxley from EDCUtah, Val Hale from Governor’s Office of Economic Development, Jon Pierpont from the Utah Department of Workforce Services and the Salt Lake Chamber’s Derek Miller, among many others.
This is a critical step. We need our best minds around the table with a laser focus on supporting our community’s response to the public health crisis and immediately assisting Utah’s small businesses and hourly employees – especially in the service and tourism industries that already face the initial brunt of this economic shock.
(The Kem C. Gardner Policy Institute is already ahead of this curve in helping our community think about how best to respond. Read Utah's economic guiding star Natalie Gochnour's six economic rules to help Utah during a pandemic, state budget guru Juliette Tennent’s best thinking on our fiscal house being in order, Jim Wood’s view of our economic fundamentals positioning our recovery and Pam Perlich’s thoughts on the long-view for Utah’ economy.)
We should also be learning from this crisis to inform our long-term economic development priorities. Utah already has an exceptional healthcare and health sciences industry. However, this pandemic has exposed not just our state but our nation’s shortfalls in our economic infrastructure behind them. We must actively work towards building out our medical supply chain, boosting our local life sciences and pharmaceutical industries, and investing in our transportation and logistics capacity. These are not just front-edge and high-wage industries; they will make our community and nation more resilient in the future.
Peggy Noonan noted in the Wall Street Journal that the current crisis evoked the words from former astronaut Frank Borman of a collective “failure of imagination” of just how the epidemic would hit our nation. Just over a week ago, few foresaw our state and nation grinding to a necessary halt.
However, Utah built the best regional economy in the nation in the wake of the last major economic shock. We did this because our fiscal house was in order, we had planted strategic seeds decades before, and the public and private sectors took decisive action in response to the downturn. While Utah is not immune to the national economy, our state is better positioned than most to manage this shock. So let’s take care of each other and put our collective imagination to work and once again lead the nation in our recovery.
Michael Parker is the Vice President of Public Affairs, Marketing and Senior Economist for Ivory Home and a member of the Utah Economic Council. Parker is the former Vice President of Public Policy at the Salt Lake Chamber and has studied regional economic theory and resilience and policy at the London School of Economics and University of Utah. He teaches Public Finance in the Master of Public Policy Program and Economics Department at the University of Utah. Share your throughs with him on Twitter @Mr_MikeParker or connect on LinkedIn