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Can Foundational Economy Save Regions In Crisis?

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  • Mikhail Martynovich
  • Teis Hansen
  • Karl-Johan Lundquist

Abstract

We perform an explorative analysis of employment patterns in the foundational economy producing mundane everyday necessities and providing welfare services across Swedish regional labour markets between 2007 and 2016. We focus specifically on hierarchical patterns in spatial distribution of foundational activities and their association – direct and through integration with other economic activities – with regional employment dynamics in times of crisis, recovery, and growth. Our findings suggest the foundational economy plays an important role as employment provider to a substantial number of Swedish workers, particularly in non-metropolitan regions. Besides, it appears to be associated with improved ability of regions to retain employment in the most acute phases of economic crisis, but only if it is well integrated into regional industrial profiles. However, its overall contribution to regional resilience in the long term appears to be rather limited.

Suggested Citation

  • Mikhail Martynovich & Teis Hansen & Karl-Johan Lundquist, 2020. "Can Foundational Economy Save Regions In Crisis?," Papers in Evolutionary Economic Geography (PEEG) 2061, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2020.
    • Handle: RePEc:egu:wpaper:2061
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    Cited by:

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    2. Birgitte Nygaard & Teis Hansen, 2020. "Local development through the foundational economy? Priority-setting in Danish municipalities," Local Economy, London South Bank University, vol. 35(8), pages 768-786, December.
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    More about this item

    Keywords

    foundational economy; everyday economy; employment; regional resilience; crisis; recovery; Sweden;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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