Economic Resilience

ECONOMIC RESILIENCE

According to the Federal Emergency Management Agency, “Resilience is the capacity of individuals, communities, businesses, institutions, and governments to adapt to changing conditions and to prepare for, withstand, and rapidly recover from disruptions to everyday life, such as hazard events.  Southern Puerto Rico understands disruptions to everyday life more than most any location in the world, as a frequent victim of hurricanes, and recently earthquakes and the COVID-19 pandemic. Stakeholders universally stated the need for more—more rapid response, more effort in recovery, and more hazard mitigation.  To achieve more in all three categories of resilience, a bold action agenda is critical.  Taking resilience into their own hands will allow the SPREDD region to control its own destiny regarding adverse events.  Following EDA CEDS guidelines, increasing resilience will rely on the following actions:

PLANNING FOR AND IMPLEMENTING RESILIENCE

ESTABLISH A RESILIENCE TASK FORCE AND CREATE ACTION PLAN WITH FOUR COMPONENTS

The first step in increasing resilience is to establish a regional economic resilience task force to guide the resilience-enhancing process.  The task force should include representatives from each municipality, Puerto Rico and Federal government agencies, regional and local third sector nonprofits (NGOs), economic development organizations (EDOs), SPREDD leadership, and industry representatives.  The task force will serve as a central point of action, working with governments, municipalities, EDOs, NGOs, and industry to fund and implement resilience-enhancing actions.

The resilience task force should be organized and begin working no later than December 31, 2021.

  1. Draft a regional economic resilience action plan, including resilience of SPREDD itself

Immediately on formation of the Task Force a regional economic resilience action plan should be developed. The plan should focus on whole community resilience, with emphasis on helping businesses and institutions develop and implement continuity of operations plans and ensuring that essential services can be provided in the wake of a disaster. The Task Force may also consider contracting with subject matter expertise for development and implementation to ensure the plan is successful. The action plan should be a living document, able to change as circumstances merit. National and International best practices in resilience planning are readily available for guidance in drafting the plan. An implementation tracking system for action plan should be developed and administered by a cloud-based program such as Microsoft Teams.

The action plan should be completed by June 30, 2022.

    1. Establish a regional BEOC, alone or within existing emergency management (EM) centers.

    Regional Business Emergency Operations Centers (BEOCs) are gaining in popularity nationwide. While the primary function of BEOCs is emergency communications, many also provide ongoing information on response, recovery, and ongoing resilience for businesses in the region. Critical to BEOCs is the relationship with local emergency management offices, and some BEOCs are colocated at EM offices.

    The Resilience Task Force should explore these options, work to secure both initial and ongoing operational funding, and work with local EM officials to successfully implement a BEOC by December 31, 2022.

       

      1. Create and curate a resilience information section on the www.eddpr.org website.

      Information and resources for the SPREDD region, including direction on how to integrate resilience into other local and regional resilience efforts, such as land use, economic development, and redevelopment planning, should be placed on the www.eddpr.org website under “SPREDD Regional Resilience Resources’. Highlighting this resource can help ensure engagement of community stakeholders including community organizations, nonprofits, workforce organizations, and private infrastructure providers such as broadband, cellular, and others (nationally, 85% of infrastructure is private).

      4. Value and Restore/Develop Natural (Blue and Green) Resilience Infrastructure

      Valuing natural infrastructure such as coral reefs and mountainside trees increases resilience. New recognition of the contribution of these assets to protect the built environment, and their value to sustainable development such as ecotourism and carbon credits is becoming fully recognized. As the southern coast and mountains of Puerto Rico is rich in natural infrastructure, SPREDD will support a multi-institutional effort to value and sustainably develop it. This initiative will first focus on blue infrastructure, including coastal (i.e., mangroves) and ocean (i.e. coral reefs), then consider green infrastructure (mountain vegetation) inland while integrating federal and philanthropic grants, facilitating establishment of value through parametric insurance, and leveraging that value for both preservation (based on reduction of risk to public and private built environment) and resilience (restoring coral reefs, planting mangroves). In addition, the LabF3S non-profit capacity building initiative can play a critical role in building capacity for non-profits in the SPREDD region to secure grant funding for Natural Infrastructure valuation, preservation, and development. SPREDD will support LabF3S, reach out to the Blue Tide initiative and Center for Resilience, Economic Policy, and Strategic Economic Development (CRESPED) initiatives and support their efforts, focused on the southern coast as the pilot project for this initiative.

      SPREDD should begin support efforts immediately and continue through the life of this CEDS.

         

        1. Develop a public relations response plan for incidents of any type

        A critical, but often overlooked resilience initiative is to develop a public relations plan to enable united, solid response in case of local and/or widespread press coverage. Clear, transparent, and consistent messaging should be developed and agreed to by all six municipalities, designed to inform and reassure businesses and citizens, in the community while providing a coherent message of resilience to the outside world.

        SPREDD will work with its municipalities and stakeholders to develop the system by September 30, 2022.

        1. Utilize FEMA’s BCA tool and PPPs to leverage resilience investments.

        FEMA’s Benefit Cost Analysis (BCA) tool is designed to document the benefits of resilience investments and is required to apply for Hazard Mitigation Grant Program funding. Using the BCA, the SPREDD region can also develop public private partnerships (PPP), both hard (built environment) and soft (programmatic) PPPs. It can also be used as justification for providing incentives for business and industry to invest the time and effort necessary to develop continuity plans, and to justify dedication of resources to protect and restore essential services such as power, water, and telecom infrastructure. The task force should provide training to key staff in how to operate the BCA (a comprehensive, nine-part course including presentations and workbooks is available free from FEMA), and work with municipal governments and the Puerto Rico PPP Agency to explore PPPs as a viable way to leverage infrastructure investments.

        BCA utilization capability should be in place by June 30, 2021; PPP efforts should be ongoing.

          1. Utilize blockchain technology to improve effectiveness of Federal funding for property reconstruction

          One of the most prevalent challenges to the SPREDD region’s ability to recover quickly is poorly maintained property records; identified as a problem throughout Puerto Rico. The lack of reliable property records may prevent many survivors from receiving aid for repairs to their property. Moving property ownership records to Blockchain has been, or is in the process of being done, successfully in Chicago, parts of Sweden, and Honduras, among others. By having clear, transparent, and immutable validation of property ownership, recovery and resilience aid can be distributed more effectively. A possible source of funding, the Blockchain Trust Accelerator (BTA) (https://www.newamerica.org/digital-impact-governance-initiative/blockchain-trustaccelerator/about/), builds Blockchain pilots that have meaningful social impacts. BTA operates as a nonprofit with support from the Rockefeller Foundation.

          SPREDD will assemble a working group to develop a brief proposal for BTA in implementing a regional pilot project by September 1, 2023.

            INITIATE INITIATIVES TO ENHANCE SMALL BUSINESS RESILIENCE AND RECOVERY

            Small businesses are especially vulnerable to disasters. Unlike large companies, they generally do not have reserve capital to withstand damage and/or interruption, and less than 30% have business continuity (resilience) plans. To address those issues in the six municipalities that comprise the SPREDD region, the following should be implemented during the term of this CEDS:

            1. Develop emergency funding sources for small businesses.

            FEMA states a sad statistic: after major disasters, 40% of businesses never reopen. One of the keys is funding to survive and reopen until federally backed funding (SBA Disaster Loans, CDBGDisaster Recovery Business Loans) arrives. The most successful of these emergency funds have been originated by the third sector, which agreed in advance that when disaster strikes, they will immediately put funding in place for small ($10,000-$20,000) survival loans to keep businesses from closing forever. Using a triage system developed after 9-11, businesses that have been damaged but can still survive with help will be prioritized from those that unfortunately cannot be saved or those that can survive for the time being.

            1. Provide information on types and importance of insurance protection by type of hazard.

            Many small business owners are unaware of specific insurance that is both affordable and critical to their survival after disaster. These include business interruption policies, the National Flood Insurance Program (NFIP), and Insurance-Linked Securities such as Catastrophe Bonds. These disaster- specific insurance products may be the difference between survival and failure for many businesses.

            1. Implement education and awareness initiatives for small businesses

            Often, small businesses are unaware of many response and recovery operations/ resources available for them in recovery. SBA disaster loans, CDBG-DR loan programs, Small Business Development Center advice and counseling, and aid to communities through Public Assistance to repair public infrastructure damage may help businesses in recovery, but only if businesses know how to access them. Providing information (pre- recorded videos, guidebooks, etc.) can make a difference as businesses struggle to recover.

            1. Develop assistance for local businesses in securing response and recovery contracting

            Often, local businesses that are struggling due to damage and/or interruption may miss the chance to obtain contracts and/or sell goods to recovery operations. This business may make the difference between survival and failure, but not without knowledge of potential opportunities flowing from recovery funding. A recovery contracting/sales opportunity portal should be implemented to ensure local businesses are aware of these opportunities.

            1. Have ready-to-implement buy local awareness campaigns to help businesses in recovery

            Often, disaster survivors are unsure or unaware of the status of businesses in their communities, and often go elsewhere to purchase (or increasingly, order goods and services online). A campaign to use local and social media to let the community know that businesses either escaped damage or are back up and running is critical to ensuring their customers do not go elsewhere. Preparing such a program for “plug and play” readiness should be completed before June 30, 2022.

            1. Develop a program to assist small and informal businesses in proper record-keeping

            To meet public recovery assistance requirements, small and/or informal businesses such as fishermen or roadside food vendors, plus many others must keep records in a format that is required for aid from FEMA and other federal agencies. An outreach program with simple tools to help businesses keep better records could yield positive results for small and/or informal businesses of the SPREDD region.

            1. Work with local and state agencies to streamline zoning/permitting after disasters

            To hasten small business recovery, communities affected by disaster, such as Branson Missouri that was devastated by a tornado in 2012, worked to temporarily ease restrictions on zoning and permitting. They gave small businesses a 60-day moratorium on having to meet some regulations (such as required parking spots) so they could resume operations quickly.

                ESTABLISHING INFORMATION NETWORKS

                CREATE RESILIENCE HUBS AND DEVELOP RESILIENCE NETWORKS FOR SMALL BUSINESS

                Resilience hubs have been funded in Puerto Rico, and SPREDD should apply to establish hubs in each of SPREDD’s six municipalities. Resilience hubs provide training before disasters, and serve as a shelter and source of information after disasters. In addition, small business resilience networks have shown to increase collaboration and cooperation in bringing them together to help each other in disaster, including sharing space, working together to keep local businesses, and in some cases even joint production. Both these initiatives can increase small business survival.

                 

                DEVELOP RELATIONSHIPS BETWEEN SPREDD AND CRITICAL INFRASTRUCTURE OWNERS/OPERATORS/SUPPLY CHAINS

                Critical infrastructure is defined by FEMA as those assets, systems, networks, and functions so vital to the United States that their incapacitation or destruction would have a debilitating impact on security, national economic security, public health or safety, or any combination of those matters. Owners and operators such as municipalities, EDOs, and public and private interests (nationally, 85% of all types of infrastructure is privately owned) are essential to economic resilience. Of particular concern is that debilitation of critical infrastructure will interrupt business supply chains, affecting both suppliers and end users. SPREDD will work with organizations to ensure local businesses maintain access to supply chains through pre-incident contingency planning. Businesses, whether large or small, manufacturing or retail, rely on supplies of products and/or materials to continue operations. Supply chain resilience has become 42 a critical component of overall resilience, as amplified by the COVID19 pandemic. To support this effort, SPREDD should provide a toolkit of resources to enable businesses to implement contingency plans for supply chain interruption.

                SPREDD should have these relationships and resources in place by January 1, 2024.

                 

                DEVELOP RELATIONSHIPS BETWEEN SPREDD AND STATE AND FEDERAL EMERGENCY MANAGEMENT AGENCIES THAT MANAGE AND DEVELOP HAZARD MITIGATION PLANS AND GUIDELINES

                Communication is a critical factor in the development of risk reduction and hazard mitigation alternatives that are complementary to programs and projects aimed at achieving economic resilience. Therefore, SPREDD will develop channels of communication with State and Federal Emergency Management Agencies to share information that supports the creation of projects that mitigate risks and hazards in local communities, and to maintain business continuity and accelerate business recovery after a disaster occurs. Participation in Hazard Mitigation working groups will be part of SPREDD’s commitment. To support this effort, the SPREDD should offer information and provide communication venues that allow companies and organizations in the SPREDD to make their voices heard in these risk mitigation planning processes.

                SPREDD should have these relationships and communication venues in place by January 1, 2022.

                  PRE-DISASTER RECOVERY PLANNING

                   PLAN TO ENHANCE ECONOMIC DIVERSIFICATION BY PLANNING FOR RESILIENCE OF KEY INDUSTRY CLUSTERS

                  Economic resilience includes economic diversification, whether against natural disasters, man-made incidents, or most recently pandemics. COVID19 decimated economies very dependent on travel and tourism, while economies that included information technology, logistics and distribution, and production of essential goods often grew even in the worst of the pandemic. The following six steps can help diversify while accounting for vulnerabilities of the resident industry mix:

                  1. Identify specific vulnerabilities in key residential areas and targeted prospective industries, take action to mitigate those risks. (Use as primary reference all FEMA approved Hazard Mitigation plans of the SPREDD region municipalities and the inputs of Local Emergency Management leaders and experts.)
                  1. Provide information on most likely hazards, and specific efforts underway to mitigate them, to EDOs in the region so they can in turn inform both existing industry clusters and prospects.
                  1. Chart industry interdependencies and opportunities to enhance resilience via industry/government partnerships.
                  1. Work with local/state government to develop a detailed response effort to help adapt businesses and citizens to changes brought about by pandemics, including social distancing, digital business models, and similar measures.
                  1. Create a contingency plan for infrastructure adaptation such as expanding healthcare and education facilities, caused by pandemics, using a combination of grants and public private partnerships.
                  1. Have pre-registration programs for businesses, individuals and community organizations in advance of major disasters and pandemics so that they may return immediately after areas are declared safe.

                      PLANNING FOR PANDEMICS

                      As this CEDS is being written, the global COVID19 pandemic is not yet under control, and we are still going to see the ramifications on the impacts and the ripple effect of all for months to come. Pandemics are particularly difficult to address, and the current affliction has forever changed both business and personal behavior. There are, however, actions that can be taken to mitigate some of the risks for this and future pandemics, as outlined in the following 3 steps.

                      These efforts should be in place by September 30, 2022.

                      1. Work with local/state government to develop a detailed response effort to help adapt businesses and citizens to changes brought about by pandemics, including social distancing, digital business models, and similar measures.
                      1. Create a contingency plan for infrastructure adaptation such as expanding healthcare and education facilities, caused by pandemics, using a combination of grants and public private partnerships.
                      1. Have pre-registration programs for businesses, individuals and community organizations in advance of major disasters and pandemics so that they may return immediately after areas are declared safe.

                          PLANNING FOR CYBER-ATTACKS

                          Increasingly, cyber-related incidents are plaguing both industry and government. Recent high-profile attacks on the U.S. government and tech giants like IBM have dominated the headlines, but small-tomedium sized businesses, and even self-employed and gig workers have been subject to information theft and ransomware. Consensus by several organizations in the field is that in 2021 cyber-attacks will inflict damages totaling $6 trillion nationally, and over $10 trillion globally. To increase resilience of the regional economy to these incidents,

                          SPREDD will implement the following three actions by September 30, 2023:

                          1. Serve as convener and coordinator of collaborative measures for critical cyber resilience

                          Working with owners/operators of critical infrastructure and public services such as power and water, implement resilience measures such as joint purchases of cyber protection systems, communications between owners/operators on cyber incidents, and joint recovery operations in partnership with local and Puerto Rico government emergency management agencies.

                          1. Provide training and assistance programs for business to create their own cyber-security plans

                          Numerous training programs, including FEMA’s Emergency Management Institute, offer courses in Cyber Security are available for business and industry of all sizes. FEMA’s EMI cyber training is here: (https://training.fema.gov/is/courseoverview.aspx?code=IS-523) Businesses, plus local government and nonprofit organizations can all receive training in how to develop and implement cyber security plans. SPREDD can provide messaging on these resources and assist organizations in obtaining them.

                          1. Develop options for alternative sources of critical infrastructure

                          Cyberattacks on infrastructure systems can create severe and long-lasting disruption. New technologies, such as water purification treatments, satellite-provided cell and broadband connections, and solar powered long-lasting battery power backup, can help businesses, government, and community organizations to survive and reopen.

                           PLANNING FOR TERRORISM, GEOPOLITICAL, AND INDUSTRIAL INCIDENTS

                          Adverse incidents are not at all limited to natural disasters and pandemics. Ask the people of Oklahoma City and New York, both of which were severely impacted by terrorism. Baltimore, Maryland, Minneapolis, Minnesota, and nations around the world have been impacted by geopolitical unrest, while states on the Gulf Coast and the town of West, Texas, were decimated by industrial incidents. Finally, disruptive technology can have severe negative impacts on a wide spectrum of industries, including online travel sites. To ensure elements of resilience are addressed for these incidents, SPREDD will lead and/or support the following efforts.

                          1. Work with emergency management agencies to create a contingency plan for businesses in case of terrorist attacks.
                          1. Have a plan to provide supplies of water in case of severe drought or terrorist-related water contamination.
                          1. Create a program to incentivize/assist businesses to create a continuity plan specifically for terrorist attacks.
                          1. Develop an economic response and recovery strategy for industrial incidents such as oil spills, explosions, etcetera.
                          1. Create an initiative to help businesses respond to global geopolitical incidents such as conflicts over trade, external or internal conflict, and civil unrest.
                          1. Created strategies for business adaptation to disruptive technology (energy sources, digitization, AI, robotics, etcetera).

                            MEASURING RESILIENCE

                            IMPLEMENT ECONOMIC RESILIENCE SCORECARD TO MEASURE IMPROVEMENTS IN RESILIENCE

                            The provider of Digital CEDS for SPREDD, StateBook International, offers a Resilience Scorecard as a value-added product. The resilience scorecard is an assessment in the form of a questionnaire that should take no more than an hour to complete. As questions are answered, an automatic score is generated based on the type of question, and once complete the total score is confidentially transferred to the EDD taking the assessment. The scorecard can provide SPREDD with an initial baseline of resilience, then as resilience actions are taken, can be used to measure progress in increasing resilience. It can also serve to show businesses, investment/site location executives, and other job-creating investors how resilient the SPREDD region is through an objective assessment of SPREDD’s disaster risk the level of ability to withstand and recover from adverse incidents–and how it is taking action to decrease that risk.