Arctic 5 Cities: Swift recovery from COVID-19 economic impact

COVID-19 pandemic was first and foremost a health crisis, but it had also severe impacts on the global economy. Negative labour market effects in the Arctic 5 cities were smaller than expected and the cities have recovered well, shows a recent study.

Researchers from University of Oulu, UiT The Arctic University of Norway, University of Umeå, and Luleå University of Technology have published a study on regional economic impacts and recovery processes of the COVID-19 pandemic in the Arctic 5 cities (Oulu and Rovaniemi in Finland, Luleå and Umeå in Sweden and Tromsø in Norway). This cross-border comparison focuses on labour markets and people’s mobility and provides information on how well different measures in different regions across national borders functioned. Despite the differing national containment regulations, all the cities have recovered well.

”The last three to four years have been a turbulent time in the global economy. COVID-19 pandemic changed our world and the global economy in ways which may be permanent. Digital solutions and increasing level of remote work have become part of our lives. Instead of talking about our competitiveness, we are now much more concerned about our resilience and our ability to adapt to future disturbances, shocks, and crises”, GenZ – Economic Resilience research group leader Jaakko Simonen says.

The labour market effects of the pandemic were ultimately relatively minor and short-lived in the Arctic 5 cities. Regional socioeconomic structures and a relatively large public sector helped the cities to bounce back. As medium-sized university cities and administrative centres, these locations employ many employees with public funds. This, together with the support provided by the public sector for different industry sectors, stabilized these cities (and the Nordic countries as a whole) and made them more resilient.

Although the pandemic caused a sharp increase in unemployment rates in 2020, they returned quickly to their pre-pandemic levels. “Currently, there is even a labour shortage in several industries throughout the North Calotte region”, Simonen points out.

Read the full article: Simonen, J., Moilanen, M., Kotila, J., Lohtander, J., Westin, L., Hersinger, A., Østbye, S., Riepponen, T. & Svento, R. (2023). The COVID-19 pandemic and regional economic resilience in northern Finland, Norway and Sweden – bouncing back or not? Arctic Yearbook 2023, 246–269.

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Last updated: 10.8.2023