The dramatic impact of compounding crises on societies and economies has magnified the importance of economic resilience. Governments across the world have channelled immense amounts of resources to mitigate the devasting consequences of present crises. At the same time, re-constructing the status-quo will not be enough to make societies and economies resilient to looming, larger crises, not least the accelerating climate and ecological crises.
As Europe seeks to transition to a green economy within planetary boundaries, countries will need to be able to stay on course and meet environmental and social objectives regardless of crises that may come along.
‘Economic resilience’ has thus become an important goal, with UN, the OECD, and the EU all calling for more resilient economies. However, to build economic resilience, policymakers need to be able to measure it. In our recent “Framework for economic resilience” we laid down the theoretical foundation.
Now for the first time, we have developed a composite indicator to assess economies’ future-preparedness to thrive when faced with continuous crises. The Economic Resilience Index comprises a broad range of determinants and dimensions to give a complete picture. In total 27 different indicators, divided into six dimensions, are considered.
Using the Economic Resilience Index we have measured and compared the economic resilience of 25 EU countries. The results tell us:
- EU economies differ greatly in their capacities to absorb, recover from, and adapt to shocks
- Scandinavian countries are most likely to prosper despite crisis conditions
- Some of Europe’s largest and historically strongest economies are poorly prepared, including France (ranked 11 out of 25), Spain (18), and Italy (19)
- Countries already hit hardest by crises are generally least prepared for future challenges