How companies connect across industries determines if regions survive recessions
Swedish researchers found that regions with more interconnected labor flows between industries weathered the 2008 financial crisis far better than isolated ones. The discovery suggests policymakers and business leaders should prioritize cross-industry workforce mobility as a concrete measure of regional economic resilience.
Originaltitel: Regional resilience and the network structure of inter-industry labour flows
<p>This paper explores how the network structure of local inter-industry labour flows relates to regional economic resilience across 72 local labour markets in Sweden. Drawing on recent advancements in network science, we stress test these networks against the sequential elimination of their nodes, finding substantial heterogeneity in network robustness across regions. Regression analysis with least absolute shrinkage and selection operator (LASSO) in the context of the 2008 financial crisis indicates that labour flow network robustness is a prominent structural predictor of employment change during crisis. These findings elaborate on how variation in the self-organisation of regional economies as complex systems makes for more or less resilient regions.</p>