This Territorial Review of Gotland, Sweden, highlights Gotland’s particularities as an island region and provides recommendations to help improve quality of life for residents and support more efficient use of public resources.

By definition, islands are separated from the mainland by sea, making them peripheral territories. This often results in a high dependence on local resources, high costs of transporting goods and people, a limited internal market, a small labour market, scarcity of land as well as strong local culture and identity linked to unique natural beauty and landscape specificities. However, despite these commonalities, islands vary in their proximity or remoteness from the mainland, resources, demographic trends and degree of autonomy and population size, requiring specific place-based policies that reflect their distinct social, cultural and economic development trajectories.

Gotland is the largest island (3 140 km²) in the Baltic Sea, representing 0.8% of Sweden’s land area, but is the smallest Swedish region in terms of inhabitants (60 970, 0.6% of the population) and its economic base (0.4% of gross domestic product [GDP]). As an island economy, its small critical mass and remoteness from larger markets are key challenges but so too are its vulnerabilities to climate change (e.g. summer droughts and sea level rise), a largely seasonal economy, difficulties in attracting high-skilled labour and limited administrative capacities.

Nonetheless, Gotland has a relatively well-functioning infrastructure, with a fibre optic network throughout the island, a strong local ecosystem (with its university providing both education and research services) and a relatively diverse economy (agriculture, agro-food, limestone and cement industry, cultural industry, digital services and tourism). Coupled with a relatively large public sector (employing 11.8% of the workforce) and an effective social service system, these have enabled relatively high well-being standards compared to other European islands and remote regions. Like many islands, the region also has the advantage of functioning as a testbed for technological and social innovations. For instance, Gotland was selected as the Swedish pilot for a smart and renewable energy system. The island also enjoys considerable policy and administrative responsibilities, given its unique administrative status as both a region and a municipality.

Seen through the lens of these specificities, this Territorial Review of Gotland examines its economic, social and environmental challenges and opportunities and offers policy recommendations in three main areas: i) infrastructure investments and planning, focussing on energy provision, water management, housing and digital infrastructure; ii) innovation capacity and business support to increase productivity; and iii) multi-level governance and subnational finance, to improve administrative capacity and effective use of own public resources to deliver services throughout the territory.

This review is part of a series of OECD Territorial Reviews created in 2001 to support regional development at the multi-country, country, regional and metropolitan scale, through peer-to-peer learning and the dissemination of best practices. The analysis follows a standard methodology. It draws on Region Gotland stakeholder responses to a detailed OECD questionnaire, in-depth desk research, two virtual and one physical study missions in 2021 and insights from two peer reviewers (from Prince Edward Island, Canada, and Scotland, United Kingdom) as well as phone interviews and detailed consultations with Region Gotland. The review was approved by the Regional Development Policy Committee (RDPC) Working Party on Rural Policy at its 27th session on 10 May 2022.

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