{"id":6661,"date":"2020-06-29T11:59:25","date_gmt":"2020-06-29T15:59:25","guid":{"rendered":"https:\/\/montgomeryplanning.org\/blog-design\/?p=6661"},"modified":"2026-03-23T14:02:56","modified_gmt":"2026-03-23T18:02:56","slug":"does-montgomery-county-have-what-it-takes-to-be-economically-resilient-during-after-covid-19","status":"publish","type":"post","link":"https:\/\/montgomeryplanning.org\/blog-design\/2020\/06\/does-montgomery-county-have-what-it-takes-to-be-economically-resilient-during-after-covid-19\/","title":{"rendered":"Does Montgomery County Have What it Takes to be Economically Resilient During & After COVID-19?"},"content":{"rendered":"

Keys to Building Economic Resilience in Montgomery County Post-Pandemic<\/strong><\/em><\/p>\n

As we await post-pandemic life and speculate about our economic future, the idea of economic resilience\u2014how quickly and easily we as individuals and society can adapt to and recover from a devastating economic blow\u2014is on everyone\u2019s minds. So let\u2019s examine the idea of economic resilience: what the term \u201cresilience\u201d means for a local economy, what characteristics and conditions make local economies resilient in the face of economic challenges and how Montgomery County can position itself to be more resilient.<\/p>\n\"Young\n

Local Economies, Adaptive Resilience, and Relationships<\/strong><\/h3>\n

Economic resilience is adaptive<\/em> resilience. This is different from the type of resilience we expect from our physical infrastructure, which \u201cbounces back\u201d to normal functioning after a disruption. Unlike electrical grids and sewer systems, our economy is not centrally planned, and has no pre-determined level of functionality. With or without an external shock, economies are always in a state of change. This is because economies are made of people\u2014and relationships between people\u2014which themselves are constantly changing and adapting to new circumstances.<\/p>\n

As a result, local economies like Montgomery County can cultivate qualities that make them more resilient regardless of the specific nature of the downturn. We have evidence from scholarly research to illustrate the characteristics that are common to resilient regions. These characteristics are coherence, equity and social\/civic capital, and they are tied together because they are fundamentally about people and relationships. Below we\u2019ll examine these three keys our county can use to build economic resilience during and after the COVID-19 pandemic.<\/p>\n

A Coherent Industrial Base<\/strong><\/h3>\n

Ask any personal finance guru and they\u2019ll tell you that a successful personal investment portfolio requires diversification to minimize the risk of a sharp devaluation of any individual holding. If an energy stock falls, a healthcare stock may rise and level out the portfolio. This concept is partially true for a local economy as well, which needs multiple stable sources of employment to cushion the blow of losing a major employer. The list of \u201ccompany towns\u201d that endure decades of struggle after the lone source of employment closed its doors is a long one.<\/p>\n

However, for local economies, a diversified industrial base alone is insufficient to create resilience. Unlike investment portfolios, which are lists of financial holdings that may or may not be related to each other, relationships between businesses and industries<\/em> are more important in creating resilience than what any business or industry does individually.<\/p>\n

A significant amount of evidence supports this idea. One study1<\/sup><\/a> uses the concept of coherent knowledge bases<\/em> to investigate adaptive resilience of regions. The authors of the study arrive at evidence of coherent knowledge bases by looking at diverse sets of businesses within a region that filed patents in technological fields that are related to each other. More patenting in related fields indicated more coherence. The study found that those regions with more coherence were more resilient through the Great Recession, suggesting that a propensity among regional businesses to patent in related but not identical fields is a helpful factor in reducing the economic damage caused by a recession.<\/p>\n

A similar study2<\/sup><\/a> finds that places where businesses are more easily able to shift to patenting in new fields were less likely to experience overall declines in patenting. Another group of researchers3<\/sup><\/a> show that strong industrial clusters<\/em>, or groups of different but interconnected industries that support each other\u2019s growth, are closely associated with strong regional employment gains. Moreover, these clusters do not all need to be \u201chigh-tech!\u201d One set of researchers concludes that resilience ultimately depends on the region and its unique elements.4<\/sup><\/a> For example, the relative long-term economic success of the Minneapolis-St. Paul region is due in part to its medical devices industry, which blended its \u201cold\u201d manufacturing economy with its \u201cnew\u201d biotechnology economy.5<\/sup><\/a><\/p>\n

These examples show that while uncontrollable economic conditions can still affect local economies, those with businesses and people that have the capacity to adapt tend to fair better when disaster strikes.<\/p>\n

Equity and Social Capital<\/strong><\/h3>\n

The research described above may seem like cold comfort to many people. Most workers are not part of high-tech industrial clusters, and few of us ever patent anything. Even the most adaptable individuals can lose jobs, businesses and livelihoods due to factors beyond their control. Because of longstanding structural inequalities, people of color are often disproportionately harmed by economic downturns.<\/p>\n

For these reasons, the concept of adaptive resilience, despite having terminology borrowed from evolutionary science, is quite different from the concept of \u201csurvival-of-the-fittest.\u201d Rather, adaptive resilience requires cooperation and compassion. In fact, some of the most convincing evidence about local economic resilience suggests that strong and supportive communities are the best predictors of economic resilience. Specifically, regions with higher levels of economic equity and social capital, as well as strong and inclusive institutions like governments, nonprofits and other advocacy organizations, are the most capable of resilience.<\/p>\n

Sociologists Chris Benner and Manuel Pastor6<\/sup><\/a> find that out of a suite of different factors such as regional education levels and level of employment in different sectors of an economy, a region\u2019s level of income equality is the best predictor of its ability to withstand and recover from recessions.<\/p>\n

The scholars note that income equality may in fact be an observable indicator of a more fundamental\u2014and less measurable\u2014trait of resilient regions: strong civic and social capital. Further case study work suggests that resilient regions have an overarching sense that everybody is \u201cin it together\u201d with a shared vision and stake in the region\u2019s progress.7<\/sup><\/a><\/p>\n

Moreover, according to Benner and Pastor, the overall political leanings of a region had no effect on resilience. Their mathematical models of resilience show that Republican-leaning regions did just as well as Democratic-leaning regions. What did have an effect, was the degree of residential segregation among Republican and Democratic voters within<\/em> regions: places where Republicans and Democrats lived nearer to each other were more resilient places than those where the two groups were highly residentially sorted. As a recent Washington Post article<\/a> notes, lingering residential segregation and structural racism have excluded Minneapolis\u2019s black residents from what is otherwise a strong and equitable regional economy. True inclusion and equity\u2014and thus true resilience\u2014cannot be glossed over by race-neutral averages.<\/p>\n

Is Montgomery County Capable of Economic Resilience?<\/strong><\/h3>\n

Now we turn to examining Montgomery County\u2019s outlook for adaptive resilience. The county fared better than most counties through the last great financial crisis, the Great Recession (2007-2009). The bump in its unemployment rate through the Great Recession from was not as severe as that of the nation.<\/p>\n