A series of recent shocks and profound structural changes are reshaping the global environment, creating both challenges and opportunities for regions. The COVID-19 crisis, compounded by the consequences of Russia’s war of aggression against Ukraine and existing megatrends of climate, demographic and technological change, are creating asymmetric impacts within and between countries and regions.

Even before the pandemic, the pace of expansion in globalisation, at least seen through the prism of global production, was slowing. Growing societal pressures for greater inclusiveness and greener supply chains, coupled with rising geopolitical tensions, are also beginning to impact on the configuration of global value chains, and supply-chain bottlenecks that arose in the wake of the pandemic and the war, have increased political focus on essential and strategic industries. The collective impact of these trends is forcing a profound reflection on the way places and firms interact with globalisation, and, in this shifting landscape, the types of levers available to attract flows of investment and people to achieve resilient territorial development.

While some regions have the assets or density considered magnetic to investment, talent and visitor flows, others have struggled, resulting in spatial inequalities within countries and in turn “geographies of discontent”. The new global context, creating new challenges and opportunities for regions, including those that may have benefited from earlier waves of globalisation, calls for a better understanding of today’s subnational attractiveness levers.

In this regard, the OECD has developed an innovative and multidimensional approach to assessing regional attractiveness to the key target groups of investors, talent and visitors. The methodology, which considers global engagement beyond international connections and economic factors alone, comprises more than 50 indicators covering 14 dimensions, across 6 domains of attractiveness (economic attraction, connectedness, visitor appeal, natural environment, resident wellbeing, land use and housing) to develop regional attractiveness profiles.

This report on Rethinking Regional Attractiveness in the New Global Environment, draws on lessons learned from 15 regional case studies undertaken in 5 European Union countries (Ireland, Italy, Portugal, Spain and Sweden), as well as additional work with Latin American and Caribbean regions, and a series of webinars and dialogues on rethinking regional attractiveness. It introduces an evidence-based “attractiveness compass” to help policy makers identify regional strengths and gaps and navigate the new uncertain environment. It also highlights the near-universal challenge faced by regions to attract and retain talent, identifies regional attractiveness “drivers” for investors, talent, and visitors, and provides an analysis of regional attractiveness policies and their governance mechanisms.

After a brief outline of the project methodology, Chapter 2 describes internationalisation in the new global environment and the importance of adopting a regional lens in policy design. Chapter 3 introduces and applies the OECD’s new quantitative measurement framework for assessing regional attractiveness. Chapters 4-6 explore the need to rethink regional attractiveness for each of the specific target groups of investors, talent and visitors, highlighting key drivers of attractiveness, and providing ‘roadmaps’ for the implementation of attractiveness policies. Finally, Chapter 7 examines effective multi-level governance and coordination mechanisms to enhance regional attractiveness.

The report [CFE/RDPC(2023)5/REV1] was approved by written procedure by the Regional Development Policy Committee (RDPC) on 22 June 2023.

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