OECD Regional Development Studies Productivity and Jobs in a Globalised World (How) Can All Regions Benefit?

This report looks at how regional policies can support productivity growth and jobs. While there has been a remarkable decline in inequality in OECD countries, inequality among regions within certain countries has increased over the same time period. Regions that narrowed productivity gaps tended to benefit from economically vibrant tradable sectors and integration with well-functioning cities. This report considers in detail the role of the tradable sector as a driver of productivity growth and its relationship with employment. It addresses the possible risks of a growing tradable sector and how diversification is central to strengthening regional economic resilience. It considers how regions integrate global value chains and highlights the role of regional and policy links in fostering productivity growth and job creation. It asks what policies can help better anticipate or cushion shocks from trade in specific regions and, more generally, what strategies and framework conditions are conducive for regional productivity and employment growth Intro Foreword Acknowledgements Abbreviations and acronyms Executive summary Chapter 1. The elusive quest for regional convergence? Chapter synopsis The quest for regional convergence Gaps between OECD countries are narrowing, but they persist across regions Overall economic inequality declined, but within-country inequality did not follow "Low-income" regions leverage their growth potential Some European regions seem to fall into a "middle income trap" Not all gaps will close, but persistent and growing differences raise concerns Catching up is possible, but is often a long-term effortLocal assets differ and contribute to regional economic gaps While some local assets are determined by nature, others depend on human actions Regions with large metropolitan areas or resource-intensive economies are among the most productive in the OECD Outmigration and ageing create challenges for all types of regions Population ageing limits future growth in OECD countries and regions Outmigration amplifies the challenges for rural regions and smaller cities The global 2007-08 crisis uncovered some unsustainable growth models Many regions struggle to return to growth since the 2007-08 crisis, most of them in EuropeSome "low-growth regions" have actually gone through a phase of rapid growth followed by rapid decline Growth returned quickly in parts of Europe and the OECD No single factor is likely to explain success or failure in returning to growth The global 2007-08 crisis and the euro area crisis left their mark on Europe's regions Investment remains low in many parts of Europe Productivity growth is necessary for sustained improvements in living conditions Employment and productivity growth are often difficult to reconcileSome regions manage to create a win-win of productivity and employment growth The employment benefits of productivity growth are rarely immediate Structural adjustment following the 2007-08 crisis was followed by job growth Regional productivity growth in OECD countries mainly follows two models: catching up or concentration Inaction comes at the price of growing inequality and a "geography of discontent" Notes References Annex 1.A. Low-growth and low-income regions in Europe Chapter 2. Thinking global, developing local: Tradable sectors, cities and their role for catching upChapter synopsis Two key factors in narrow the regional productivity gap within countries Tradable sectors are associated with successful catching up Well-functioning cities support productivity within their limits and beyond Tradable sectors are associated with successful catching up Tradables are not just manufactured goods and natural resources What makes tradable sectors different? The drivers of productivity growth differ in tradable and non-tradable sectors