The 21st century began with series of massive shocks to the world economy, with negative effects evident in practically all countries. The first major shock, the 2008 global financial crisis, originated in the US financial markets and rapidly spread to the real economy, causing extensive and persistent shock effects. The most recent crisis, caused by the COVID-19 pandemic, is of entirely different origin, yet it again resulted in a global downturn. While no one knows when, how or why the next shock will appear, a clear lesson from the crisis is that much more attention should be placed on the analysis of how companies and societies could improve their resilience against future economic shocks.
This research project aims to identify the methods by which Finnish companies survive economic shocks, the impact of such shocks on global value chains and international trade, and the instruments and policies that are most likely to improve company resilience. By using novel datasets and methodologies, the project provides essential new information about resilience against external economic shocks. The ultimate purpose is to assist in the setting of national innovation strategy and to participate in drafting actionable plans for the future.
Previously, the characteristics of company resilience have not been dealt with in depth. For that reason, the strategy in this project is to adopt a multidimensional -approach to studying resilience. The project will examine the heterogeneous impact of COVID-19 shock on firms and the renewal of companies during and after the shock. Furthermore, the role of value chains’ as channels to transmit shocks is analysed and the performance of Finnish and Swedish industries after an import shock related to China is also compared. While the results of this research will generate policy implications, a separate policy-relevant analysis focusing on the impacts of Business Finland’s funding for business development in disruptive circumstances will also be conducted.
The main aim of this project is to support decision-makers in their developmental work. In moving towards this goal, the status of ongoing work and preliminary results will be presented to Business Finland and other stakeholders. Findings will also be made public by interviewing project researchers on media such as podcast. Naturally, research reports and policy briefs will be published as well to reach a more research- and policy-oriented audience.
The work is organised into three work packages:
Etla is conducting this project in cooperation with VTT, the Technical Research Centre of Finland. In addition, the University of Strathclyde (UK), Luiss University (Italy) and Lund University (Sweden) will also participate in the project.
