Table of Contents

  • Not all cities are equally prepared to compete in a globalised economy. The largest cities around the world are often better equipped than smaller ones to attract investment, increase their market shares, upgrade their skills base and move up the global value chain. Such cities benefit from “agglomeration economies”, which typically arise when firms and workers come together in close proximity, share knowledge and become more productive.

  • “Western Scandinavia” is an unofficial name that eight regional and local authorities have chosen collectively to designate the area of this OECD study – the 500-kilometre coastline joining up the capital of Norway (Oslo), the second- and third-largest cities in Sweden (Gothenburg and Malmö), and their hinterlands. Western Scandinavia brings together 30% of the Norwegian population and 33% of the Swedish population. It generates slightly less than the gross domestic product (GDP) of Norway (USD 228 billion) and about half of the GDP of Sweden (USD 400 billion). It also offers a high quality of life and a dynamic economic base.

  • Across the world, urbanisation continues to shape territories in different ways. While the urban population is projected to rise from below 1 billion in 1950 to an estimated 9 billion by 2100, urban settlement patterns vary widely across countries. Cities range from small and medium-sized municipalities in Europe to megalopolises far over 10 million in Asia, for example. Stronger competition to increase market shares, attract high-skilled workers and move up the global value chain places a premium on agglomeration benefits, which allow for reaping economies of scale and are facilitated by spatial proximity and knowledge spillovers. Agglomeration benefits tend to increase with city size if other conditions are met, including accessibility to employment, a skilled workforce, research and innovation, and effective governance arrangements to improve public policy delivery across sometimes centuries-old administrative boundaries.