Presentation on "Promoting growth in all regions and the new rural policy 3.0" made at the Seminar on "Innovations and challenges in the management of a regional policy, held in Bratislava, Slovak Republic, 22 February 2017 Presentation by Enrique Garcilazo, Regional Development Policy Division, OECD. More information: www.oecd.org/gov/regional-policy/innovations-and-challenges.htm.

1. Promoting Growth in all Regions and
the New Rural Policy 3.0
Enrique Garcilazo, OECD Directorate for Public Governance and
Territorial Development
Bratislava, 22nd February

2. 1. Performance urban & low density regions
• Research methods, data and definitions
• Trends and diagnosis
2. Policy considerations
3. Framework for action
Outline

3. Regional and Rural Policy in OECD
Regional
Development Policy
Committee (RDPC)
WP Urban Policies WP Rural Policies WP Territorial Indicators
The OECD Working Party on Rural Policy is a unique committee that
discusses rural development policies at an international level.

4. OECD Territorial Reviews:
A series of case studies of regional policy
In OECD member countries :
 20 National Territorial Reviews
 8 Regional Territorial Reviews (NSPA)
 5 Reviews on Regional Innovation Systems
 23 Metropolitan Reviews
 5 National Urban Policy Reviews
12 National Rural Policy Reviews
Alemania, Mexico (2006)
Finlandia, Holanda, Escocia (2007)
China, Italia, España (2008)
Quebec, Canadá (2009)
Inglaterra (2010)

5. Thematic Reviews
 Factors of regional competitiveness
(1) Empirical evidence
-- General trends
(2) Case studies
– Field analysis
– Questionnaires,
– Peer reviewers, experts
• Policy implications:
(3) Implementation
Governance
Promoting growth
in all regions (15)
RURAL-URBAN
Partnerships (16)
Linking RE Energy
to Rural Dev. (15)
The new Rural
Paradigm
Service delivery in
rural regions
Territorial
Approach to FSN

6. Low density economies what are they?
Source: Global Monitoring Report 2013, IMF/World Bank

7. A functional approach makes it possible to highlight two main discrepancies
between the administrative structure and the actual organization of the territory
Functional vs. administrative regions
Core cities vs. administrative cities
OECD functional urban area
TL3 administrative region
Rennes, France
Policies need reflect the reality of where people live and work (FUAs), as do the institutions
that design and implement such policies (an example is the provision of public services).
Matching Policies to at the right scale

8. The OECD FUA’s reveals…
Under a generous definition
(above 50,000 inhabitants),
roughly 2/3 of OECD
population lives in cities. For
the US, this share is up to
70% and it reaches 90% for
Korea. Thus, a large share of
the “rural” population
actually lives in the proximity
of cities
total share total population number FUA
Korea 41,222,071 85% 45
Luxembourg 388,217 80% 1
Japan 98,116,294 77% 76
United Kingdom 44,117,424 73% 101
Canada 24,178,509 73% 34
Chile 12,168,828 73% 26
Netherlands 11,859,874 72% 35
United States 206,115,837 68% 262
OECD 29 (total) 726,714,805 66% 1,206
Germany 52,775,331 64% 109
France 39,144,694 63% 83
Spain 28,577,745 63% 76
Belgium 6,305,913 59% 11
OECD 29 (average) 25,059,131 59% 41
Mexico 61,957,569 58% 75
Austria 4,708,403 57% 6
Switzerland 4,252,585 56% 10
Estonia 741,999 55% 3
Poland 21,043,827 55% 58
Portugal 5,722,920 54% 13
Denmark 2,950,389 54% 4
Sweden 4,858,646 53% 12
Italy 30,392,931 51% 74
Ireland 2,225,274 50% 5
Greece 5,599,938 50% 9
Finland 2,638,535 50% 7
Hungary 4,985,582 50% 10
Czech Republic 4,759,624 46% 16
Norway 2,123,840 45% 6
Slovenia 786,964 39% 2
Slovak Republic 1,995,042 37% 8

9. … three types of rural areas present different
challenges
 Rural within FUA – part of the catchment area
• Challenges with service delivery, matching of skills, land use policies
 Rural close to cities – attract new residents, tend to have good industrial mix
• Challenges to balance economic and social diversity and competition for land and landscape
 Rural Remote – primary activities play a relevant role in the regional economy
• Challenges to mobilise areas of absolute advantage, improving provision of essential services

10. OECD Regional Data-Base (RDB)
 OECD regional typology – statistical definition (1994)
 The RDB includes regional statistics on 5 major topics:
– Demographic, Regional accounts, Labour , social and environmental indicators, Innovation
 For comparability, regions are classified in 2 levels
• TL2 Territorial Level 2 (337 regions)
• TL3 Territorial Level 3 (1708 regions)
 Defining rural
 Recognising linkages between rural and urban
 Urban and rural areas have both growth potential and often complementary assets
 Urban and rural areas are increasingly integrated in functional regions (self-organising spaces)
 Integration between urban and rural areas is important for socio-economic performance
Definition Building blocks Types
OECD typology Rural communities PU, IN, PR
Extended OECD typology Rural communities PU, IN, PRC, PRR
FUA Grid cells FUA, and rest

11. Urban and rural regions are
increasingly integrated
 In OECD countries, 26% of population live in PR regions (297 million)
 20% in rural regions close to an urban area (235 million)
 6% in remote rural regions (62 million)

12. Convergence forces in low density regions…

13. … driven primarily by rural close to cities.
Convergence forces in low density regions…

14. Rural regions amongst the top performers
Amongst top performers
54% were rural (pre-crisis):
 33% rural close to cities
 21% rural remote
Declined to 41% (post
crisis)
 31% rural close to cites
 9% rural remote

15. The Rural Paradox
The majority of rural regions close to cities and rural remote are not
driven by the paradox: 69% of rural close to cities and 58% of rural
remote experienced both employment and productivity growth

16. What are the key drivers of productivity growth?
 Tradable activities are key for rural close to cities and remote rural
 A minimum level of density is key for economies of scale/scope and delivery of
goods and services.

17. Key drivers for catching-up regions
Initial GDP pc
<75% national av.
A
B
C

18. Summary of trends
 Low density regions display convergence trend:
 there is growth potential
 No systematic evidence of rural paradox
 sustainability is possible
 Rural close to cities particularly dynamic
 Tradable activities are key
 Agglomeration benefits can occur at different scales
 Enabling factors are key (skills, accessibility)
 Demographic challenges and service provision

19. Links between regional and aggregate
Where growth actually occurs is also critical:
 Contributions to growth
 Implications for national policy makers
Contribution to growth over the a given period (n, n+t):
 Initial size of a given territory  GDP share (n)
 Its growth rate between (n, n+t)
19

20. Contributions to aggregate growth depend on few hub regions…
…the fat tail is equally important -- if not more -- to
aggregate growth… 20

21. 1. Performance rural and urban regions
• Research methods, data and definitions
• Trends and diagnosis
2. Policy considerations
3. Framework for action
Outline

22. Three Types of Rural Areas
 Definitions can help better tailor policy responses
 Rural areas face different challenges, opportunities and policy responses
 Countries defining different types of rural regions (FI, FR, MX, SW)
 Context matters: different countries have different definitions

23. Capitalise on Rural Urban Linkages
• Labour market flows are key, but there are other crucial Rural-
Urban interactions
 The spatial scale to consider depends on the purpose of the partnership
 The spatial scale of cooperation should be flexible

24. Rural – Urban partnerships can help reach
common development objectives

25. Matching
…the appropriate scale
Engagement
…including relevant stakeholder
Learning
…to be more effective
Building effective and sustainable rural-urban
partnerships: a strategy
1. Better understanding of Rural-
Urban conditions and interactions
2. Addressing territorial challenges
through a functional approach
3. Working towards a common
agenda for urban and rural policy
4. Building an enabling environment
for Rural-urban partnerships
5. Clarifying the partnership
objectives and related measures

26. The main governance approaches to rural-
urban partnerships

27. Further Policy Considerations
1. Identifying drivers in rural areas
– Tradables (manufacturing), renewable energy, natural resources,
services, fisheries, forestry, agriculture, tourism, natural
amenities
– Finding the niche (smart specialisation)
2. How to add value in these domains
– Policy focus on enabling factors: skills, accessibility, market
intelligence, institutions, innovation
3. Demographic trends and forward looking policies
– Address long term cost enhancing efficiency in service provision
(planning, ICT)
– Mitigation and adaptation to climate change
4. Address spatial pockets of poverty in low density areas
– Beyond transfers, identify bottlenecks of enabling factors, better
target national. Regional and local interventions

28. Persistence of inequality
Infrastructure
provision
Leaking by linking
The policy headache: isolated sectoral
action may have unintended outcomes.
Problem: lack
of connectivity
28

29. with labour mobility
Persistence of inequality
Policy
responses
Human capital
formation
Brain drain
29
The policy headache: isolated sectoral
action may have unintended outcomes.

30. Infrastructure
provision
Policy
responses
Human capital
formation
Business
environment
Innovation
Regional growth
and convergence
Towards a Multidimensional Response
At the regional scale
Many countries are reforming in this direction, but
implementation is still difficult.
30
-Horizontal evidence?
-Policies ?
-Institutions ?

31. OECD Key principles for place-based policies
I. Use of regional specific assets and smart
specialisation (or to create absolute advantages
to stimulate competition & experimentation
across regions)  tradables
II. Create complementarities among sectoral
policies at the regional (or local) level
III. Use of multi-level governance mechanisms for
aligning objectives & implementation

32. An Evolving OECD Rural Paradigm

33. Rural Policy Responses in OECD Countries
Narrow vs. broad policy responses
 Europe: European Commission CAP pillar II (DG Agri), DGRegio (smart
specialisation) and LEADER
 Urban rural linkages through ITI, CLLD
 United States: USDA and White House Rural Council
 Italy: Inner Area Strategy
 Japan: National Spatial Strategy (compact and networked), rural
revitalisation (multifunctionality, 6th industry, rural urban linkages)
 Chile: building synergies amongst a wide range of national ministries =>
national rural policy

34. thank you
JoseEnrique.Garcilazo@oecd.org