Over the last two decades, while income gaps between OECD countries have narrowed, gaps between regions remain significant and within many countries have grown. Large metropolitan regions have continued to pull away from other areas, many of which are confronting shrinking, ageing populations and lower quality infrastructure and public services. Impacts of recent shocks, including the COVID-19 pandemic and Russia’s war of aggression against Ukraine, and megatrends, threaten to widen gaps between regions, deepening the longstanding geography of inequalities.

However, this is not inevitable. This publication shows that over the past two decades, several countries have been able to narrow gaps between regions. As policymakers seek to emulate their success, they must look to seize the opportunities and address the risks presented to regions by climate change, automation, digitalisation and demographic shifts, as well as changing patterns of globalisation.

This sixth edition of the OECD Regional Outlook supports policymakers across OECD countries in their efforts to tackle inequalities and achieve more inclusive prosperity and well-being in regions, cities and rural areas. The report presents new evidence on the evolution of inequalities between regions over the past 20 years. It also sheds light on the critical role of productivity in addressing regional inequalities and the importance of improving infrastructure and public services in lagging regions as a platform for their revival, and for resilient, sustainable and inclusive growth. It shows how virtuous or vicious cycles can develop within regions, with far-reaching implications for the opportunities available to residents.

This OECD Regional Outlook emphasises the importance of policy frameworks that are agile and flexible to respond to future shocks. The report explores different forward-looking scenarios that contribute to ongoing reflections on future-proofing regional development policy to deliver more equal opportunities across regions. Governments in OECD countries need to take bold action to tackle the longstanding geography of inequalities, and the OECD Regional Outlook 2023 concludes with a policy roadmap to guide those efforts now and in the future.

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