News
Quarterly Update – October to December 2021
Quarterly Update- October to December 2021 So much has happened since we really scaled this past summer. The seeds we
[vc_row][vc_column][thim-heading title=”Economic Recovery PART 2: PRIORITIES – Short and Long-Term Strategies during COVID 19″ title_uppercase=”” clone_title=”” line=””][vc_column_text]The COVID 19 economic recovery continuum roll out will be unlike any recovery process, particularly due to the international scale of the recovery. Therefore, new recovery approaches are developing such as multi-state regional recovery strategies. Foreign heads of state may collaborate (or become more competitive) for international recovery. Regardless what innovative and new recovery strategies develop, the recovery continuum and the principles of FEMA’s established National Disaster Recovery Framework (NDRF) will apply to the COVID 19 recovery ensuring coordinated efforts that respect the unique needs of the communities. The framework, which includes clearly defined phases, principles, and guidelines, encourages traditional and nontraditional strategies to recovery as the foundation calls for strong leadership and coordinated management for successful recovery efforts.
Cities, states, regions, and even countries generally have existing economic development strategies and plans to encourage business retention and expansion, employment opportunities, and improved quality of life for their citizens. With these plans and strategies in place, many ask why economic recovery strategies and plans are necessary and how they differ from the existing economic development strategies and plans. In some cases, communities and states are able to build on existing economic development plans and strategies and customize and prioritize them to the needs following a disaster. More often than not, existing economic development strategies and plans do not address the unanticipated unique needs following a disruptive event, which is proving to be the case with COVID 19, and recovery-specific strategies, analysis and plans are necessary.
The most significant difference between traditional economic development and economic recovery priorities and strategies is the speed, urgency, focus and customization in which the strategies and plans are addressed. Economic recovery takes years in many cases; however, recovery strategies require the delicate balance of being implementing quickly and appropriately to address the severe and sudden loss of jobs and business. Economic recovery also requires that state leadership quickly learns to take advantage of new federal and philanthropic programs and easily adapt to constantly changing community needs during the response and recovery phases. Finally, economic recovery forces leadership to address the pre-existing vulnerabilities in a transparent and collaborative way.
The United States has become familiar with major-scale disasters which have become more frequent and costly both in dollars and lives lost over the years as illustrated in the chart below of the comparison of billion-dollar natural disasters from 1980-2020. The number of events in the 2010’s nearly doubled from the 2000’s and the cost of these disasters has more than quadrupled from the 1980’s to the 2010’s. The number of billion-dollar events and their increased cost of the past several decades illustrate the longer recoveries required for large-scale disruptions.[/vc_column_text][thim-heading title=”Comparison of U.S. Billion-Dollar Disaster Statistics (CPI-Adjusted) 1980-2020″ title_uppercase=”” clone_title=”” line=””][vc_single_image image=”7478″ img_size=”large” alignment=”center” onclick=”link_image”][vc_column_text]
SOURCE: NOAA National Centers for Environmental Information (NCEI) U.S. Billion-Dollar Weather and Climate Disasters (2020). [1]
[/vc_column_text][vc_column_text]COVID 19 has forced communities that do not typically experience disasters in response and recovery modes and are not familiar with the recovery continuum or phases and strategies, let alone the challenges associated with recovery. States and communities which have more experience with disasters, such as hurricane-prone areas, were not necessarily more prepared for COVID 19 response and recovery, but these areas have a situational awareness and community mentality that have a level of comfort with response and recovery actions and strategies such as curfews, lockdowns, sudden job loss, federal supplemental funding programs and requirements, etc. Disaster-prone communities more likely have robust preparedness plans in place and experience with the disaster recovery continuum and are in a better position to manage expectations of their citizens. That being said, the COVID 19 recovery continuum will be unlike any other disaster recovery process regardless of experience with recovery. However, states with limited response and recovery experience will require additional support when developing recovery strategies.
Disasters and disruptive events such as COVID 19, particularly during the recovery phases, highlight the pre-existing vulnerabilities of a community or state. Rip a bandage off a wound that requires stitches causes will create bleeding and pain, and if not treated properly in a timely fashion, may cause infection. These events pull that bandage and force states and communities to face pre-existing vulnerabilities and develop strategies that not only address the immediate response, but the bigger picture.
COVID 19 is an international disaster impacting some countries more than others and some states more than others within the US. COVID 19 will impact “hot spot areas” and hard hit industry reliant communities (tourism as an example) differently across the globe. Approaches to recovery will be unique to each community embracing and understanding their unique cultures, governance structure, industry clusters, demographics, leadership, accessibility, etc. The federal government will respond with unique programs and policies specific to COVID 19 that will impact communities differently.
For example, states have already responded by collaborating with a regional task forces. New York Governor Cuomo was quoted by the New York Times reminding citizens that “If you do it wrong, it can backfire, and we’ve seen that with other places in the globe…. What the art form is going to be here is doing that smartly and doing that in a coordinated way.”[2] The regional plans that will develop must be coordinated and thoughtful with their response. Interstate regional planning is necessary for an event of this scale and impact, particularly for the “reopening phasing ” for states with stay-at-home orders. However, states must have concurrent planning and strategies specific to their communities to address vulnerabilities, federal resources, and unique economic impacts.
Regardless of local economic and industry-specific impacts of COVID19; as well as the length of the disaster phase, the disaster recovery continuum remains relevant in the COVID 19 economic recovery strategies and planning. Some short term and intermediate economic recovery strategies include the initial stages for long term planning with capacity building and analysis of impact of the disaster on workforce, private sector, small businesses, etc. States and communities will also use these phases to provide assistance to businesses and workforce with customized programs and events while navigating the sudden influx of new federal funding programs and state response policies.
For example, one of the initial federal funding programs to support small businesses is the Paycheck Protection Program, where Congress authorized forgivable loans equal to 2 ½ times monthly payroll for businesses with fewer than 500 employees, the US Small Business Administration’s definition of small business. However, the first tranche of funding was exhausted in two weeks forcing Congress to authorize additional supplemental funds. “During the first 13 days of the federal government’s small-business rescue program, the spigot was wide open in Nebraska. Firms there got enough money to cover 81% of the state’s eligible payrolls. It was a different picture in New York and California, where companies did only half as well. “[3] Small businesses from states more impacted by COVID 19 did not receive proportionately as much as states less impacted which could be due to several challenges including the mandated lockdowns. Further, smaller businesses with less than 50 employees were also disproportionately impacted even though they are more vulnerable to the impacts of economic disruptions. States and communities need to be aware and responsive to the changing rules, regulations and policies that impact disbursement of federal funding and can change the trajectory of the recovery planning process timeline and coordination.
Additional of immediate strategies on the local level, typically include programs and actions to supplement federal relief programs or utilizing more customized federal programs such as HUD’s Community Development Block Grant (CDBG) funding supplemental which is specific to local COVID 19 recovery initiatives or US Economic Development Administration COVID 19 supplemental grant program:
States typically incorporate several longer term economic recovery strategies that states base on the support and engagement of community stakeholders and other government agencies. Longer term economic recovery initiatives develop during the initial stages of economic recovery and support the following economic development initiatives customized to the unique needs and assets of the state/community:
Overarching strategies with this nationwide recovery will target the impacts of massive unemployment and business closures. Strategies will also be customized to the impacts of COVID 19 such broadband expansion, remote education and childcare for a teleworking parents, online communications and workforce development programs, and so on to prepare for the “new normal.” Many of these strategies will be developed and implemented concurrently to short-term and long-term economic recovery plans which will require significant intergovernmental, non-governmental, and private sector coordination with aligned strategic recovery planning and governance.
[1] NOAA National Centers for Environmental Information (NCEI) U.S. Billion-Dollar Weather and Climate Disasters (2020). DOI: 10.25921/stkw-7w73
[2] Worst Is Over,’ Cuomo Says as States Snub Trump on Restarting Economy, The New York Times, April 13.
[3] Small-Business Rescue Shows Not All States Are Created Equal, By Zachary Mider, Cedric Sam, April 20, 2020 Bloomberg[/vc_column_text][/vc_column][/vc_row]
Quarterly Update- October to December 2021 So much has happened since we really scaled this past summer. The seeds we
Plant the Seeds by Kirsten McGregor, Principal, Sagax Associates We’ve all heard that you need to plant the seeds,
Sagax Associates, LLC is an economic recovery and development consulting firm supporting governments, nonprofit organizations, public-private partnerships, and businesses responding to and preparing for economic disruptions and disasters.
Get the latest Sagax Associates news delivered to your inbox.