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Promoting Growth in All Regions

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This publication highlights the importance of promoting growth in all types of OECD regions, particularly in underdeveloped ones. Helping underdeveloped regions to catch up will have a positive impact on a country’s national growth; in some cases more so than in already well-developed regions. Furthermore such growth helps to build  a fairer society, in which no territories and their people are left behind. An important question is whether this potential to catch up is possible?  The evidence suggests that this IS the case.  Examinations of patterns of growth reveal that underdeveloped rural and intermediate regions tend to grow faster. Their catching-up potentially largely depends on human capital development, infrastructure and innovation-related activities but also on institutional factors and policies. This publication is based on anlaysis among all OECD regions and 23 case study regions from ten OECD countries over the period 1995-2007.

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What are the key growth factors? The theory

This chapter investigates how less-developed regions can catch up to national average GDP per capita. It focuses on identifying and analysing the main factors responsible for growth - and the main bottlenecks - for regions at different levels of development. It bases the analysis on five factors for growth: infrastructure, human capital, labour market, innovation, agglomeration and connectivity, and productivity. A first key finding of this analysis is that growth tends to follow simultaneous gains in several areas, such as human capital, infrastructure and innovation, rather than just one of these factors being responsible. This emphasises the importance of a multidimensional policy approach and the benefits of enhancing areas of complementarity, rather than tackling individual sectors in isolation. A second key message is that human capital is very important for boosting regional growth in all types of regions. And finally, growth dynamics vary with levels of development; they are not the same for underdeveloped regions as for advanced regions.

English

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