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Abstract

This ESPON report has been written by Sebastien BOURDIN. Europe is facing two major challenges: population decline and climate change. However, not all cities and regions are affected in the same way. Concerning the demographic issue, if we consider the double effect of longer schooling and an ageing population, this will result in a significant reduction in the working-age population with economic and social consequences that could be disastrous for certain territories. Concerning the climate problem, heat waves, marine submersions, forest fires, and other droughts are already very noticeable in certain regions and at certain times. Still, if nothing is done, they are likely to spread geographically, increasing in frequency and intensity. Moreover, the COVID-19 crisis has highlighted, and sometimes accentuated, socio-economic and territorial inequalities. It has also revealed the differences in the institutional, financial and anticipatory capacity of cities and regions. In this context, more than ever before, there is a need for structural changes in regional economies.
500 km
Malta
Acores (PT)
Guyane (FR)
Madeira (PT)
Reunion (FR)Mayotte (FR)
Canarias (ES)
Liechtenstein
Martinique (FR)
Guadeloupe (FR)
Regional typology of eGovernment interactions
Regional level: NUTS 2/1 (2013)
Source: ESPON, 2017
Origin of data: Eurostat, ESPON 2020 Data and Map Updates, 2017
UMS RIATE for administrative boundaries
© ESPON, 2017
Share of people who have interacted with public
authorities online 2016 and the annual change
in the share people who have interacted with public
authorities, 2008-2016
high interaction, high growth
high interaction, medium growth
high interaction, low growth
medium interaction, high growth
medium interaction, medium growth
medium interaction, low growth
low interaction, low growth
low interaction, medium growth
TOPIC PAPER
Structural change of
regional economies
May 2021
Europe is facing two major challenges: population decline and climate change. However, not
all cities and regions are aected in the same way. Concerning the demographic issue, if we
consider the double eect of longer schooling and an ageing population, this will result in a
signicant reduction in the working-age population with economic and social consequences
that could be disastrous for certain territories. Concerning the climate problem, heat waves,
marine submersions, forest res, and other droughts are already very noticeable in certain
regions and at certain times. Still, if nothing is done, they are likely to spread geographically,
increasing in frequency and intensity. Moreover, the COVID-19 crisis has highlighted, and
sometimes accentuated, socio-economic and territorial inequalities. It has also revealed the
dierences in the institutional, nancial and anticipatory capacity of cities and regions. In this
context, more than ever before, there is a need for structural changes in regional economies.
Climate change and demographic decline are likely to have dierentiated impacts on dierent
cities and regions, calling into question the European cohesion.
It is necessary to capitalise on awareness and support citizen initiatives to implement structural
changes that have become indispensable.
In order to break the vicious circle of population decline, the silver economy must be seen as
an opportunity.
The design of public policies must take the long term into account. To do so, it is necessary to
set up strategic anticipation approaches for territories.
Structural changes must go through a territorialisation of activities and ecologisation of
practices. The circular economy can be an essential lever of these changes.
2ESPON // espon.eu
Topic Paper // Structural change of regional economies
1.
Introduction
The health disaster triggered by the COVID-19 crisis has
direct eects on the resilience of states in the face of a
shock of international proportions. Measures to contain,
protect populations, strengthen health systems, and
support businesses and the economy were taken as a
matter of urgency to mitigate the disastrous consequences
that the transmission of the disease could have (ESPON-
GEOCOV). Over and above these short-term economic
consequences, which have led to major measures being
taken on government spending and a global response by
central banks, the coronavirus crisis has revealed several
major challenges, leading to far-reaching structural
changes in Europe. With COVID-19, the halt in our
economy has brutally revealed logistical dependencies,
loss of industrial skills, and the weight of personal
services, local trade, and tourism in regional economies.
COVID-19 led to a polymorphous crisis, referring both to
macro-economic impacts and to global issues with a local
impact.
The coronavirus crisis then questions the resistance of
the European Union (EU), States, regions, cities,
businesses, and citizens on several aspects. This crisis
raises questions about new ways of production and
consumption: (i) a change in the organisation of value
chains and the need to relocate part of our economic
activities; (ii) the importance given to long-term
prerogatives and the need for better anticipation; (iii) the
need for coordinated and coherent public policies
between scales and as decentralised as possible to
improve the responsiveness and resistance of
stakeholders; (iv) the need to green our practices by
limiting our impact on the environment; and (v) the need
to regain proximity in services for the population.
In addition to these elements – in all the EU territories, but
even more so in those located in the European deprived
regions crisis elements can be seen as an unnished
catching-up process. Many studies have highlighted the
imperfect implementation of programs supported by the
structural funds due to institutional weaknesses and,
consequently, problems in territorial governance modes.
The territorialisation of the economy, through the
concentration of wealth, income it brings about and the
disparities it produces, is proving to be a powerful
mechanism for structuring territorial systems. Depending
on each country's economic and industrial history, the
spatial planning policies implemented, the growth
strategies of companies, and the new rules of the
international economy, the economic geography of the
territories in Europe is reshaped. The processes of
concentration and deconcentration of wealth contribute to
shaking up the hierarchies between States, regions, and
large metropolises.
This crisis reveals deeper changes in progress, which this
policy brief proposes to analyse. Specically it addresses
the need to implement structural changes in regional
economies, especially in deprived regions that face many
challenges. How can regional economies be revived and
their attractiveness improved in a context where Europe
must confront climate change, succeed in its energy
transition and limit the eects of demographic decline?
Finally, could these challenges not be opportunities to set
in motion a positive dynamic in these territories? How can
regions and cities create the framework conditions to
enable these inevitable transformations to take place?
This policy brief attempts to shed light on the main
advances in ESPON's work to meet the challenge of
these structural changes (the global warming and
demographic crises). It also presents the main challenges,
a research plan, and policy recommendations for
European regions.
3ESPON // espon.eu
Topic Paper // Structural change of regional economies
2.
ESPON’s contribution to address this issue
2.1. Fighting climate change and
adapting territories: a risk of
increasing inequalities
Several ESPON projects have addressed issues related
to the eects of climate change and natural hazards on
territories. The ESPON-CLIMATE (Climate Change and
Territorial Eects on Regions and Local Economies)
project analyses more precisely how and to what extent
climate change has an impact on the competitiveness
and cohesion of European regions. Based on various
parameters, an aggregated climate change impact index
has been produced. It distinguishes between (i) the
physical impact (sea-level rise for coastal regions and
increasing oods for areas crossed by large rivers); (ii)
the environmental impact (forest res and soil erosion
among others); (iii) the economic impact (linked to the
high dependence of some regions on coastal or mountain
tourism, but also related to agriculture and periods of
drought); (iv) the social impact (linked to the increase in
oods); (v) the cultural impact (with cultural and historical
heritage being directly aected, for example, by oods).
Thus, as we can see, the eects of climate change are
not limited to environmental issues but also (and above
all) aect territorial development. The ESPON-TITAN
(Territorial Impacts of Natural Disasters) project reaches
similar conclusions by focusing the analysis on oods,
droughts, storms, earthquakes, and landslides. In the
face of these multiple climatic and natural hazards,
additional factors increase the risk of impact. The ESPON-
SUPER (Sustainable Urbanization and land-use Practices
in European Regions) project stresses that the increase
in land use and growing urbanisation have harmful
eects.
Map 1 : Vulnerability to climate change of European regions (ESPON-CLIMATE)
4ESPON // espon.eu
Topic Paper // Structural change of regional economies
The ESPON Climate project results also show that some
sectors of activity will be more aected than others
(agriculture, forestry, tourism, and energy). Thus, the
vulnerability of regions depends on their dependence on
these sectors in particular. As the level of adaptive capacity
diers between regions, the eects of climate change may
exacerbate regional disparities in Europe. However, for
regions lagging in economic development and/or in
demographic decline, the impact of climate adds to the
eects of the crises and the diculties encountered in
recovering. According to the various reports published,
regions in Eastern Europe and Mediterranean Europe
seem to be particularly exposed (Map 1). The ESPON-
BRIDGES project (Territories with Geographical
Specicities) proposes a reading of the challenges faced
by regions with specic territorial contexts (rural,
mountainous, island, coastal, and sparsely populated
areas). Considering these characteristics, it highlights that
integrated approaches are necessary to meet the
challenges of climate change and the energy transition. In
particular, it calls for cross-sectoral coordination to address
these complex interactions between social, economic,
and ecological aspects.
Case study: Bergen
In Bergen, the most signicant impact will be due to the
expected rise in sea level and increased exposure to
coastal storms. The port, historic buildings, transport
infrastructure, and wetlands will be aected. However, the
city has a high adaptive capacity to cope with climatic
hazards. In any case, the measures put in place will have
to integrate all the actors concerned and require regional
governance.
Source: ESPON Climate
Because of the risks faced by regions in the context of
climate change, two reports propose to analyse the
potential for deployment of the circular economy and
energy transition as avenues to be explored for a more
harmonious and responsible development of territories. In
the ESPON-CIRCTER (Circular Economy and Territorial
Consequences) project, the extent to which cities and
regions can implement the circular economy according to
their potentials is assessed. It is shown that these
potentials varied signicantly between cities and regions.
It can be explained by several factors such as (i) available
biomass resources (to develop the bioeconomy in rural
areas in particular); (ii) concentration of industrial activities
(to develop industrial symbiosis approaches); (iii)
accessibility and connectivity (to develop sharing
economies); (iv) technologies (to develop eco-design
principles); and (v) installed knowledge bases and
awareness (to develop and facilitate collaborations
between various stakeholders).
In the ESPON-LOCATE project, territorial disparities in
energy consumption and production patterns are also
reported. Moreover, the report highlights dierentiated
potentials regarding renewable energy exploitation due to
geographical and climatic dierences. For example, in
wind energy, the potential is more signicant for northern
European regions, whereas southern regions are at an
advantage when it comes to the potential for installing
solar energy. One of the key conclusions of the analysis is
that it is the natural endowment of a region that is
important, but its combination with the legislative aspects,
socio-economic, and governance conditions of that region
are essential to have an impact.
2.2. Demographic change, an unequally
ageing Europe
The changing birth rate is no longer sucient to ensure
the renewal of the population in all the countries of the
continent, mainly due to immigration. The ageing of the
population will continue to increase. Population growth in
the EU hides major disparities across its territory. The
natural balance of the new members, from the former
Eastern Bloc, is negative almost everywhere except in the
Czech Republic and Slovakia. In 2018, the migratory
balance was positive in all EU countries except for Croatia,
Romania, Latvia, Lithuania, Bulgaria, and France. Still, it
is in the southern European countries, particularly Spain
and Italy, that immigration is most signicant. Moreover,
fertility characteristics have changed profoundly: women
have fewer children and have them at much higher ages.
Thus, there is no country in the ESPON area where the
cyclical indicator reaches the level necessary for
replacement, which is 2.1 children per woman. Finally,
health conditions are generally quite good throughout the
European Union, judging by the level of life expectancy
and its signicant increase in recent years. This is one of
the driving forces behind population ageing, leading to an
increase in the share of older people across Europe and
the rise in the share of older people among the elderly.
The DEMIFER (Demographic Diversity of the European
Territory) project has developed a typology based on
demographic and migration data. It was highlighted that
Central and Eastern Europe and Greece would have to
face major challenges, aecting the demography of the
territories and their economy. Demographic decline could
lead to labour shortages, as only three out of four people
retiring would be replaced. Therefore, one of the major
challenges is to halt this demographic decline, which,
through its increasing ageing, weakens economies and
has an impact on employment (ESPON - Geography of
New Employment Dynamics in Europe).
Given this demographic ageing and/or the demographic
decline that is accelerating in certain regions, the question
5ESPON // espon.eu
Topic Paper // Structural change of regional economies
arises concerning access to basic services in these
territories (ESPON-PROFECY - Inner Peripheries:
National territories facing challenges of access to basic
services of general interest). Indeed, given the
depopulation, political decision-makers tend to close
these services due to a lack of sucient inhabitants. The
result is the marginalisation of territories that suer from
demographic problems and generate other collateral
problems with socio-economic consequences. As a
result, some areas have low economic potential and
suer from 'disagglomeration penalties' leading to a
decline in well-being and stagnation or even demographic
decline. In these territories, implementation of cross-
border services appears to be an eective solution
(ESPON-CPS - Cross-border Public Services).
Thus, these demographic changes can lead to vicious
circles for certain territories. Among them, shrinking rural
areas sometimes suer (ESPON-ESCAPE - European
Shrinking Rural Areas Challenges, Actions and
Perspectives for Territorial Governance). Therefore in
these territories, it is important to apply cooperation
strategies to implement social and organisational
innovations that make it possible to overcome the status
of shrinking areas. Moreover, the increased use of digital
technologies or shared services will make it possible to
oer public services in territories where they are sorely
lacking.
Case study: Siemiatycze, Hajnówka and Bielsk
districts (LAU 1) in Poland
There has been a long demographic and industrial decline
(local woods and chemicals) in this region since the end
of the Second World War. As a result, young people have
left the region to move to metropolitan areas in Poland.
These problems are compounded by limited nancial
resources, a low level of education, and low social trust.
To overcome this vicious circle, the policy
recommendations advocate focusing development on
multifunctional and sustainable agriculture. In terms of
improving the quality of management, local governments
should be strengthened, their cooperation increased,
freedom of action in solving their problems and nancial
support should be provided.
Source: ESPON ESCAPE
6ESPON // espon.eu
Topic Paper // Structural change of regional economies
3.
The need for a structural change of regional
economies
Evidence from ESPON's work shows that cities and regions have to face crises with a long-term horizon (demographic
change and climate change). But it is also true that European territories have recently had to face other types of crises
which have been unprecedented, one-o, and large in scale (economic and nancial crises, the health crisis). There are
thus crises of dierent forms and magnitude, which generate inequalities and can aect the cohesion of territories.
Indeed, studies show that regions are not aected in the same way by crises, whether environmental (Markkanen and
Anger-Kraavi, 2019); demographic (Kashnitsky et al., 2020); economic (Capello et al., 2015); or health-related (ESPON,
2020). Similarly, the costs of these crises and regions' ability to withstand them are also highly dierentiated and depend
on the structural and territorial characteristics of European regions (Capello et al., 2016; Giannakis and Bruggeman,
2020).
Given the risk of increasing inequalities aggravated by the climate and demographic challenges raised, it becomes
indisputable for regional economies to make structural changes to cope with future crises. However, the COVID-19
pandemic has shown that highly dierentiated local responses can be put in place in times of crisis. These spatial
variations in public policies can be explained by economic (developed regions versus lagging regions); demographic
(regions in demographic decline versus attractive regions); territorial (metropolitan areas versus rural areas); and
institutional (level of quality of governance and cooperation between actors) characteristics. This is one of the major
lessons of the ESPON-GEOCOV project. Beyond these parameters, the pandemic also revealed the question of the
means available to cities and regions to cushion the shock. Here again, cities and regions do not have the same
nancial, human, or legislative means to make the structural changes necessary to prepare for future crises.
Whether these crises are economic, ecological, demographic, or health related, they are above all global and systemic,
and partly unpredictable. It is indeed dicult to accurately predict the, more or less, long-term consequences of current
and past choices. It is all the more important for territories to be prepared to face these crises. Moreover, it is not
insignicant that Ursula Van der Leyen sees the Green Deal as a large-scale operation to combat climate change. This
roadmap is intended to make the EU a leader in the ght against climate change. The Presidency of the European
Commission explained that "on the one hand, it is about reducing emissions, and on the other, it is about creating jobs
and boosting innovation". This political document is important because it places climate urgency at the heart of European
policies as never before. It sees the coincidence of three phenomena: (i) the mobilisation of citizens on the climate
issue; (ii) the real risk of recession in Europe, which calls for new industrial and economic projects; (iii) the need to hold
on to a federative project and to recreate cohesion in a Brexit context. The levers identied to implement the ambitious
objectives set call for a restructuring of regional economies: energy, energy renovation of housing, and even international
trade. To facilitate the achievement of carbon neutrality by 2050 for countries that are still highly dependent on coal, a
"just transition" fund of 100 billion euros of investment over the next seven years will enable certain regions to move
away from fossil fuels by limiting the economic and social impacts caused by the energy transition. From this point of
view, the Green Deal constitutes an important political and nancial lever to promote structural reforms of regional
economies.
7ESPON // espon.eu
Topic Paper // Structural change of regional economies
4.
How can we support the regions so that they
succeed in making the necessary structural
changes?
Achieving these structural changes is not easy because each region has its own specicities. Some of them have
always based their economies on carbon-based production. The Just Transition Fund (with a budget of 17.5 billion
euros) is designed to help regions move away from fossil fuels. This is a delicate issue for some regions that are
dependent on gas, coal, and oil. To which profession should workers be converted? With what money? The role of the
Just Transition Fund is to help Member States switch to cleaner energy sources while easing the social burden of this
conversion. It will nance investments in renewable energy, storage, energy eciency, and heat production for district
heating networks. It can also be applicable in all economies suering from industrial decarbonisation.
Indeed, the epithet "just" (Just Transition Fund) is not insignicant. It is important to ask the question of solutions for
regions that have long based their production system and their economy on these non-renewable energies. Stopping
these productions could be perceived as unfair for these regions, because it would mean cutting their wealth. So how
can we make these structural changes viable and fair? We believe that part of the answer lies in the implementation of
long-term diversication strategies. From this point of view, the process of entrepreneurial discovery – initiated within
the framework of the smart specialisation strategy – can be seen as an instrument for developing and managing Just
transition fund. Indeed, this Just Transition Fund (JTF) should not be seen as a simple nancial compensation
mechanism but more as a lever to encourage regions that have based their economy on carbon-based production to
implement a new economy from scratch.
As explained by Iotzov and Gauk (2020), the proposed JTF actions dedicated to economic revitalisation, social support,
and land restoration are expected to have a positive marginal eect on structural change potential. However, the JTF
can serve as a purposive instrument for designing, governing, and implementing Territorial Just Transition Plans, and
applying a strategic mission-oriented acquisition of funds. The authors argue that three types of JTF actions are crucial,
as they are likely to inuence parameters that best explain the variance in the structural change potential of regions:
actions related to (i) research and development (R&D) investments; (ii) productive investments; (iii) business incubation
and consultancy for rm creation and development
8ESPON // espon.eu
Topic Paper // Structural change of regional economies
5.
Main challenges for successful structural
changes of regional economies
Given the need to implement these structural changes, it
is reasonable to ask what kind of policy action is most
likely to bring about these transformations for a more
sustainable and inclusive economy/lifestyle for all. It is
also important that an agenda for future research
emerges.
5.1. Towards territorial governance and
increased coordination between
stakeholders
The transition to sustainable development is built at the
local level. Therefore the governance of territories is, now
more than ever, a major challenge for our societies. In this
context, a new concept has emerged in recent years:
territorial governance. It can be dened as a process
involving constructing common frameworks to coordinate
the representations and strategies (individual and
collective) present in a territory. Throughout the process,
actors interact in a conictual and/or cooperative manner
(Torre and Traversac, 2011) and make choices to
implement a territorial development project. The
implementation of territorial governance is a key issue for
implementing structural changes.
Policy responses and recommendations
Capitalising on awareness and supporting citizen
initiatives
It should be stressed that there is now a real awareness
of climate and demographic issues. With the COVID-19
crisis, both households and companies are becoming
aware of the impact that air ights have on the environment
and that most international meetings can be held over the
Internet, which will probably lead to an explosion of virtual
meetings in the coming years. As far as consumers are
concerned, with containment, there has been a better
consideration of the impact of daily actions and their
eects on the climate. Many people have (re)discovered
local consumption of products and their ecological virtues.
Another example is tourism and air travel, which have
been drastically curbed due to the spread of coronavirus
and the ban on travel to dierent countries. All of this has
only reinforced the growing population's awareness of the
need to move towards more virtuous and sustainable
economic models. Regarding demographic aspects,
citizens have also become aware of the importance of
caring for the elderly and the problems associated with an
ageing population.
Because of the increasing openness of the actors on
these subjects, it seems necessary to capitalise on this
awareness to make the required structural changes. In
this sense, public policies should increase spending on
vocational training and education and reect on a new
system that is more agile and responsive to the changes
that would take place. A European Investment Bank
survey (2019-2020) shows the inequalities in the
perception of potential risks. This supports the idea of the
need to carry out educational activities among companies
and the population to reinforce the feeling of a pressing
need to make structural changes.
Governance and acceptability
The choices made to address the climate crisis and
implement the energy transition often involve an
asymmetry of power between stakeholders, leading to a
strong rejection of the project. Numerous studies show
that a major obstacle to the deployment of the energy
transition lies in the problem of social acceptability linked
to inecient territorial governance systems. For example,
Bourdin et al (2020) explain that biogas units are more
easily accepted when they are accompanied by a
comprehensive territorial governance policy based on the
creation of trust and a systematic integration of all
stakeholders, including those who might be opposed to
them. Relationship-based management at an early stage
of the project considerably increases social acceptability.
This should involve the highest level of public engagement
from the very beginning of the project, and a two-way
exchange of information can transform the opinions of
both parties. To overcome resistance, trust must be
established through transparent communication.
Moreover, to achieve structural change in a regional
economy, strong interactions between policymakers,
businesses, associations, and citizens are needed. These
structural changes induce strong transformations and can
profoundly modify the activities of certain stakeholders in
a territory. Moreover, to foster cooperation, a great deal of
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Topic Paper // Structural change of regional economies
attention must be paid both to the stakeholders' singular
interests, their evolution, and to the general interest of the
local community, which can also evolve in the
implementation of territorial governance. It should be
noted that the centres of interest and objectives within the
categories of actors may dier. These dierences should
be taken into account to allow for mutually benecial
multilateral communication and knowledge transfer
between the parties concerned. Territorial governance is,
by nature, complex and requires instruments and
arrangements adapted to local specicities.
Moreover, given the mixed reactions to large-scale energy
projects (wind turbines and biogas in particular), decision-
makers need to ask themselves whether the public will
react positively to the uncertain (and even marginal for
some) gains from the development of this renewable
energy. There is also a distributive justice issue here.
Indeed, the benets of implementing such projects for the
local community remain minimal and are conned to a
limited number of economic actors. To promote the
projects' social acceptability and avoid any objections to
them, it seems indispensable to ensure "local equity", i.e.,
a situation where all the stakeholders in a territorial
development project agree to compensate for the
externalities collectively identied as unfair. Among the
proposals to ensure "local equity" are (i) a reduction in
local taxes linked to the increase in tax revenues for local
authorities; (ii) a reduction in the cost of energy purchase
for citizens; (iii) compensation for owners of houses close
to the facilities; (iv) partial or total ownership of a project
by citizens; and (v) a strengthening of the law to prevent
these ecological facilities from being too close to housing.
Territorial foresight workshops
Climate change implies an increase in risks such as rising
water levels or snowmelt, with major consequences for
regions that make a living from activities linked to the
exploitation of natural resources, such as tourism or
agriculture. Here again, as was the case for renewable
energy projects, projects aiming to cushion the shock of
climate change must be shared by the territories'
stakeholders. Given the interdependencies between
several sectors of activity, a relevant way to accompany
these structural changes would be to organise territorial
foresight workshops. This would involve inviting a wide
variety of stakeholders to identify courses of action to
facilitate the development of projects to deal with the
risks. In these meetings, the actors of the territory would
be invited to (i) carry out a shared diagnosis of the risks
facing the territory; (ii) build a shared vision of the future
by choosing among several previously constructed
scenarios; (iii) give visibility to the dynamics facilitating or
slowing down the implementation of these projects; and
(iv) produce messages to raise awareness and anticipate
future crises and risks.
Collective action and governance principles
Finally, the experience of collective action in large-scale
projects aimed at structural change allows ve general
principles of governance to emerge: (i) legitimacy: the
majority of stakeholders must both recognise themselves
in the values that govern the exercise of power and trust
those who exercise it and carry the project; (ii) democracy
and citizenship, which cannot be reduced to the formal
exercise of democracy or the enjoyment of rights without
a counterpart responsibility; (iii) the relevance of
governance regimes, i.e., their eective adaptation to the
goods and services to be produced and managed; (iv)
partnership, i.e., the recognition that the public interest is
always the fruit of cooperation between various types of
actors and cannot be reduced to a monopoly of public
power; and (v) the articulation of the scales of governance.
The role of intermediary actors
The transformation of the productive models of goods
and services implies rethinking the organisational models
of complete sectors, whether in industry, the social and
solidarity economy, culture, digital, agri-food production,
education, urban development, etc. This implies an
in-depth reection on goods and services to assess their
necessity and identify other ways of responding to needs
and other operating models.
These structural changes are not self-evident. Some
actors in the territory may be inclined to implement them,
others more reticent. In the situation of opposition to
transformation projects, there is a need for territorial
intermediation. The latter can be dened as the mediation
of actors to favour proximity and coordination to carry out
a territorial project. It would be dynamic and based on a
set of practices, devices, and engineering, allowing for a
better understanding of how the territory, through the
relations of the coordination of actors, functions and
organises itself in complexity. There would thus be certain
particular actors - intermediaries - who would help to
implement territorial development policies. Taking the
example of biogas deployment in the context of energy
transition, Bourdin and Nadou (2020) explain that local
authorities can play this role of intermediary actor. The
latter is a determining factor in the success of projects.
This intermediation is characterised by various roles:
facilitator, neutral actor, and pedagogue. Thus, territorial
intermediary actors make it possible (i) to be the guarantor
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Topic Paper // Structural change of regional economies
of an integrated and place-based approach; (ii) to
establish trust with local actors; and (iii) to have an
incentive role in the implementation of projects for the
transformation of regional economies.
Research agenda
One line of future research would be to study the territo-
rial governance of projects to make structural changes to
limit the eects of climate and demographic change.
This means analysing both the dynamics of the interplay
of actors and the mechanisms and instruments for
implementing this territorial governance. What coopera-
tion exists between associations, local authorities, busi-
nesses, and research? How could these actors coordi-
nate at dierent levels?
Within local authorities, companies, and associations,
dierent actors carry, support, and initiate these structural
changes: what are the proles of the actors who bring the
change? What are their positions in their organisations?
What are their resources (networks, expertise on
economic, environmental, and demographic issues, past
experiences, etc.)? What are their interests and
motivations? How do they manage to build collectives,
bring together partners, and interest their interlocutors in
their initiatives? Who are the decision-makers in territorial
transformations? Who are the "intermediate actors" and
what are their roles? The research projects could focus
on emerging actors and retrospective analyses to draw
lessons from transformation projects that are already well
underway.
Given the problems of acceptability of this type of project,
future research could also focus on these initiatives'
brakes and levers. How have the actors managed to
unblock situations? Are there types of territories where it
is easier for initiatives to emerge?
5.2. Breaking the vicious cycle of
population decline
In 2019, for the second consecutive year, more people
died than were born in the EU. While its population
continued to grow slightly, reaching 447 million after
Brexit, this was only due to positive net migration. Some
countries, such as Ireland, Sweden, Denmark, and
France, continue to experience natural population growth,
but others are already well on the way to decline. This has
been the case in Eastern Europe since the late 1980s.
But also, more recently, in southern countries such as
1 https://ec.europa.eu/digital-single-market/en/news/silver-economy-study-how-stimulate-economy-hundreds-millions-euros-year
Italy, Spain, and Greece, a trend whose economic, social,
and political implications have long been underestimated
by European leaders.
This may explain why Ursula von der Leyen has chosen,
for the rst time, to include a portfolio specically
dedicated to this issue. If the current trend continues, the
number of Europeans is expected to fall from 2030 to 424
million in 2070 - a 5% drop in half a century. These
continent-wide projections pose several problems.
Policy responses and recommendations
Limiting the loss of the labour force
On the economic front, there is a risk of losing part of the
working population. This is a brake on wealth creation.
However, the regions that could potentially be most
aected are those with a major need for labour due to the
structure of their economy. To counter these eects, one
recommendation could be to develop the employment of
women and the training of low-skilled people. Another
way forward is to encourage people aged 55 to 64 to stay
at work, which is not easy at the moment.
Climate change has consequences in terms of migration
and human mobility, and its impact will increase in the
coming decades. Given the complexity of the relationships
involved, climate risks do not mechanically lead to
migration ows. Far from being an intrinsically negative
and undesirable outcome, migration can also be an
adaptation strategy in its own right. Consequently, the
role of immigrant labour (climatic or otherwise) is likely to
play a role in certain regions that combine demographic
decline and economic diculties. The issue of their
integration will be a determining factor for local policies.
Taking into account the eects of population ageing:
the silver economy as an opportunity
The share of people over 65 could reach 30% within half
a century. Indeed, health systems will have to be adapted
to the growing share of Europeans over 80. This is
expected to double by 2070 and will reach 13% of the
population1. Seniors have specic needs in terms of
goods and services. The silver economy can be an
opportunity for territorial development, particularly in
areas aected by an ageing population . Indeed, many
sectors are concerned: health (home care, remote
medicine, nutrition, connected health objects), security
and autonomy (remote assistance, detectors), housing
(adapted housing, home automation), services (personal
services, domestic help, provident funds), leisure
(tourism, sport, games), communication (mobile phones,
11ESPON // espon.eu
Topic Paper // Structural change of regional economies
tablets, the Internet), and transport (mobility aids, adapted
transport).
In certain regions, the silver economy can represent an
opportunity, particularly for tourism for retired people, or
even the permanent settlement of retired people. This is
notably the case in Portugal. The latter oers many
advantages to senior citizens in search of a pleasant
climate, security, quality of life, and living cost. Real estate
can be ten times cheaper than in France, and the current
tax advantages are not negligible. In January 2013,
Portugal oered a ten-year tax exemption on income from
abroad. In three years, more than 25,000 French people
have moved to Portugal.
Case study: Pays de la Loire (NUTS 2) in France
The coastal location, along with a temperate climate,
attracts a signicant number of retired people. The
demand for specic services adapted to the need of this
population is, therefore, skyrocketing. More than 400
SMEs and associations are currently working in the
sector, and the prospects for development are substantial.
The "Rendez-Vous d'Aaires de la Silver économie Pays
de la Loire" (Business meeting gathering all key public
and private actors) is an important event contributing to
fostering networking and business opportunities in the
sector.
Source: ESPON SME
Fighting depopulation: restoring services to residents
and businesses
A form of “vicious circle” can explain the depopulation of
certain territories. Some people decide to leave remote
regions (especially young, qualied people who wish to
settle in metropolitan regions, despite the general
increase in the standard of living in these remote regions);
the declining population makes it no longer wise to
maintain the services oered; the decline in the range of
services does not make the region attractive, or it even
encourages people living there to leave it to join territories
with more services. In a survey published in May 2019 by
the European Council on Foreign Relations, Spain, Italy,
and Greece were among the six countries in which
respondents said they were more concerned about
emigration than immigration2. In these territories, the
population is ageing, villages and small towns are being
emptied of their population, and people feel abandoned.
There are no more shops, no kindergartens, no more
doctors, etc. This reality erodes condence in democratic
institutions and can create the conditions for a vote of
2 https://ecfr.eu/article/commentary_europes_emigration_paradox/
discontent characterised by rising populism (Dijkstra et
al., 2020).
Therefore, structural changes are needed in these
disaster areas. This is a challenge in terms of territorial
cohesion. Therefore, a long-term strategy must be put in
place to support the populations concerned and restore
the attractiveness of the geographical areas in the
process of depopulation. This may involve increasing
accessibility and connectivity. It must not only be by rail or
motorway but also include digital accessibility and
connectivity. Public services, social services, employment
assistance, and online declarations are just some of the
tools set up by local authorities and the State that are not
accessible to people living in areas where digital
technology is not suciently deployed. However, these
tools do have a role to play in enhancing the value of the
territory. Beyond this implementation, this work must be
accompanied by a vision: health, economic, and
development policies can be born and allow remote
territories to reinvent themselves.
Moreover, with the COVID-19 crisis, there is a gain in
interest in teleworking. Also, although not all isolated
territories can attract companies, they can encourage
teleworking. The increased accessibility of remote
employment thanks to connected servers and le-sharing
solutions enables many employees or self-employed
workers to access their dematerialised les. The
constraints of mobility, morning and evening childcare,
and rental charges are also taken into account by
companies. For the region, favouring local workplaces
such as low-cost coworking or third places with very high-
speed Internet or bre access encourages local
consumption among local actors.
In total, three conditions must be met: a truly eective
digital connection for a service adapted to needs, a
political vision that supports local opportunities, and,
above all, a willingness to help local actors who are
getting started.
Research agenda
Several types of research can be carried out in the future.
A rst one concerns the analysis of strategies implemented
by political decision-makers to tackle depopulation. What
place does it give to the role of immigration? What place
does digital technology occupy? To what extent can
certain territories in demographic decline fare better than
others?
Another research line concerns the silver economy,
hitherto little explored in studies in regional science,
economic geography, and regional and urban planning.
How can all the economic and industrial activities that
12 ESPON // espon.eu
Topic Paper // Structural change of regional economies
benet senior citizens enable structural changes in
regional economies? How does the "seniorisation" of
society constitute a lever for economic development and
an industrial sector of the future? What entrepreneurs
propose solutions/services to meet the needs of senior
citizens? How can technological and social innovation be
combined to provide a response adapted to senior
citizens' needs and their uses? What role do local policies
play in promoting its deployment? What are the territorial
conditions necessary to implement a silver economy
approach at the local level?
5.3. Taking the long term into account
in the design of public policies and
better anticipating the future
The climate and demographic crises raise acute questions
of equity in time (between generations) and space
(between territories), mainly because the measures to
mitigate these crises can only be eective in relation to
the nal objective pursued if all the territories subscribe to
this objective and simultaneously aim to achieve it in their
actions. Therefore, local action in the face of these major
changes contributes to implementing the principles of
reciprocity and spatial and temporal solidarity. However,
the reports from ESPON highlight that cities and regions
are not equal in implementing such local actions.
In addition to approaches to reduce the phenomenon,
there are also measures to adapt to the eects that are
and/or will be manifested in various ways, mainly
depending on the intensity of climate change and
demographic changes, which vary according to the eorts
made to try to limit them. These measures involve
structural changes in regional economies. But these
changes are complex because decisions have to be
taken in a situation of relative uncertainty, with the
intensity, nature, and location of the eects only partially
known. Moreover, the responses of human societies to
the impacts of climate and demographic change are
developed locally within a profoundly unequal framework:
inequality in responsibilities for the phenomenon (for
example, in the climate context, the territories most
aected are not and will not necessarily be the territories
that historically emit the most greenhouse gases),
"structural" inequalities in physical exposure to the
various risks and, nally, "cyclical" inequalities in terms of
resources (capacity for expertise, anticipation, and
repair). These inequalities linked to the eects of these
crises can be expressed at dierent levels:
at the international level, between countries, particu-
larly in terms of the capacities for expertise, anticipation
and crisis management, and the sensitivity of territories
to these crises (economic, urban, agricultural, energy,
social systems, etc.) ;
within the same country, between territories that are
more or less aected according to the fragility and
exposure of the regions (islands, coastal areas, moun-
tain areas, metropolises, etc.) and according to local
dynamics (response capacity);
within the same territory, between populations (social
inequalities): the eects potentially aecting certain
more "fragile" and/or more "exposed" populations (cf.
the 2003 heat-wave in Europe, which primarily aected
the elderly).
Consequently, an eort to anticipate and take account of
the long term in the design of public policies is necessary.
Policy responses and recommendations
Avoiding a crisis of unpreparedness: towards a
strategic anticipation of territories
Actors should develop a greater emphasis on long-term
prerogatives through a change in consumption and
production patterns. It is a question of taking a long-term
perspective but acting quickly because climate and
demographic change are major trends that need to be
tackled early.
This concerns several elements simultaneously: health
conditions, environmental impact, future technologies,
and industries, etc. There is no doubt that the coronavirus
crisis appears, in the minds of public opinion, to be a
crisis of unpreparedness for long-term changes:
emergency reactions by the various States to distribute
gels, masks, and COVID-19 tests; passivity about the
arrival of the pandemic as far as Europe and the United
States; and a lack of anticipation of public policies. As a
result, many budgetary savings were made in the various
European countries, for example, in public health and
hospitals. According to Eurostat, public spending on
health has fallen from 7.4% of GDP in the Eurozone in
2009 to 7.1% in 2018. The current needs make these
short-sighted concerns, which many countries in Europe
have put in place, regrettable. The ESPON-GEOCOV
study comes to the same conclusions at the local level:
the lack of anticipation explains why many of the measures
taken by cities and regions were short-sighted.
The decision to engage in strategic anticipation reection
on a territory can be the subject of a consensus among
the elected representatives of a local authority. It can also
result from the mobilisation of technical services, which
will alert elected representatives to the need to start
thinking about the future of the territory. The motivations
put forward can be varied: (i) a desire to better understand
the transformations underway (ageing, digital uses,
changes in lifestyles, mobility, etc.) and to "see further" in
a world that is continuously changing, and increasingly
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Topic Paper // Structural change of regional economies
rapidly; (ii) questions about the possible evolution or
questioning of the territory's development model (the
limits of "all residential" development, industrial fragility,
the territory's attractiveness running out of steam, the
questioning of the agricultural/food-processing model, the
positioning of a rural territory in relation to the metropolises,
etc.); (iii) facing institutional changes and changes in the
scope of intervention of local authorities; (iv) the will not to
undergo these changes, but to "weigh" in the dialogue on
the basis of a joint project; (v) rethinking local democracy,
reconsidering consultation processes, envisaging a new
relationship between elected representatives and
citizens; (vi) improving decision-making: so they are not
based only on intuitions and objectify the trends and
transformations under way; and (vii) going beyond
opportunistic or short-sighted decisions.
To succeed in the structural changes of cities and regions,
it therefore seems relevant to set up a strategic anticipation
approach to better understand current and future
transformations and develop strategies based on a
common vision for the future of the territory. A strategic
anticipation approach is an integrated process that
articulate expert insights, analyses the current situation of
the territory and hypotheses on its future evolution, and
proposes a global reections on the long-term and
strategic and operational approaches (Figure 1).
Figure 1: Strategic anticipation approach
It can be declined as follows: (i) designing the approach
(Who? What? Why? How? With whom?); (ii) building the
prospective base: database, study, and analysis (selecting
relevant data, collecting of information and points of view,
analysing and understanding the dynamics: major trends,
uncertainties, emergences, hypotheses); (iii) exploring
possible futures (crossing hypotheses, scenarios, and
stakes); and (v) taking action (preparing for anticipated
transformations (pre-activity), bringing about the desired
changes (proactivity), proposing options to answer a
strategic question, identifying collective projects to meet
the stakes). The sequence of the dierent stages makes it
possible to build a well-argued and coherent approach
and work with all the actors involved. In practice, these
dierent stages are not strictly sequential: the initial design
phase can be reviewed and adjusted throughout the
process, there can be back-and-forth between the
denition of the prospective basis and the construction of
scenarios.
Research agenda:
From a spatial point of view, while risk mitigation and crisis
anticipation measures are based on the principle of joint
actions coordinated internationally to achieve common
objectives with commitments of varying intensities
depending on the territories, adaptation and structural
change measures do not require the same collective
coordination eort. Both objectives and expected benets
are dened locally above all. However, this theme as such
is still poorly taken up in local action. Several reasons can
be put forward: the diculty of deciding locally without a
precise vision of the losses avoided and, therefore, of the
gains directly associated with the costs of the actions to
be implemented; the lack of a culture of adaptation and
the diculty in conceptualising local solutions; the
temporality of the phenomena at stake which does not
14 ESPON // espon.eu
Topic Paper // Structural change of regional economies
correspond to that of political decision and action; and a
certain wait-and-see attitude so as not to bear the costs
alone. These factors must be tested based on empirical
cases. Future research may also seek to identify other
factors limiting/hindering local public action. Furthermore,
does the level of anticipation of local authorities determine
their capacity to eect structural change?
Building resilience capacities is frequently put forward as
a perspective for identifying operational solutions and
reducing a territory's vulnerabilities. However, the use of
this systemic concept for thinking about adaptation
solutions deserves to be further questioned and worked
on, particularly when applied to territories (Hassink, 2010).
It would deserve to be better articulated with the strategic
anticipation logic necessary to implement resilient regional
and urban policies.
There are several typologies aimed at classifying
measures to deal with the eects of crises. These deserve
to be analysed in greater depth:
Studying the intentionality of actors in relation to crises
makes it possible to distinguish between spontaneous
and conscious adaptation. Intentionality can also be
analysed according to the type of agent, distinguishing
public actors from private agents, who do not have the
same rationality;
We can also distinguish proactive (anticipated) struc-
tural changes from reactive (rather short-term) structural
changes;
The systemic transformation of territories is based on a
set of choices and constraints, determined by the initial
congurations and inuenced by external conditions.
Another line of research would therefore consist of
determining the factors that can inuence the capacity of
a territory to anticipate and better modify its trajectory and
thus cushion future risks and crises (social, economic,
nancial, ecological, risk exposure, etc.).
Finally, still concerning the design of public policies to
better anticipate the future, it seems important to think
about a conceptual framework that would make it possible
to link economic diversication and entrepreneurial
discovery processes. This could be done by extending the
framework on a just transition (Iotzov and Gauk 2020)
developed by Harrahill and Douglas (2019).
15ESPON // espon.eu
Topic Paper // Structural change of regional economies
6.
A roadmap for structural change of regional
economies: territorialisation of activities and
ecologisation of practices
6.1. A double paradigmatic shift:
territorialisation and ecologisation
Since the last quarter of the 20th century, traditional
development policies have been criticised at dierent
levels. Firstly, Wolfe (2011) has highlighted the lack of
coherence and coordination between regional
development policies and sectoral policies. The lack of
consideration of 'place' in traditional policies has also
been shown, as evidenced by works criticising the same
solutions applied to similar problems in dierent places
(Barca et al., 2012) or the “one size ts all” (Tödtling,
2010). Finally, it has also been argued that public policies
often follow a top-down logic, generally ignoring integrated
and/or bottom-up approaches (Wolfe, 2011; Barca et al.,
2012). In response to regional development criticism
based on a top-down logic, regional and national
governments have gradually adopted a more complex
approach taking into account local specicities.
In the light of these criticisms, recent years have seen a
paradigmatic shift in public policy design by proposing
greater territorialisation. The latter can be dened as the
set of processes that lead to the strengthening of the links
between an activity and all the territory's components. It
can then be a “return to the local”, particularly in a
reinforcement of the geographical proximity of actors and/
or activities. If the notion of territorialisation includes an
implicit “local”, it is however not limited to it: in the links
between an activity and the territory, the dimensions of the
territory taken into account are at the same time material,
identity-based, and organisational. Thus, the link between
productive systems, their actors, and their territories is
built through the mobilisation and creation of many
resources, which can be of various natures: economic,
social, political, cultural, environmental, and landscape.
Also, given these crises of various forms, structural
changes will have to follow a line emphasising place-
based approaches.
Territorialisation would partly involve the mobilisation or
creation of natural resources in the territory, partly justifying
the ‘ecological’ implicitness. Thus, territorialisation
processes - which operate at dierent scales - have
multiple links to ecologisation, both from the point of view
of “cognitive and normative reframing”, the eective
mobilisation of natural resources and/or of the impacts on
them.
At the same time, we have witnessed another paradigmatic
change: that of the greening of practices. By greening
practices, we mean any action of cognitive and normative
reframing - a change in the way of thinking and judging
social behaviour - aiming at a more or less strong
environmental inection of the norms (legal or implicit)
and social practices in force in the eld under consideration
(agriculture, management of sports and nature leisure
activities, forestry, etc.). Greening can be based on precise
environmental standards (e.g. respect for the biological
rhythms of wildlife) generally supported by institutional
actors, or it can be carried out more informally by more
diverse actors (institutions and associations but also
users, citizens, etc.) referring to plural registers
(environmental ethics, scientic or activist ecology, etc.).
Therefore, the processes of greening are based on various
levers - sectoral policies, eco-labels, etc. - which are used
to promote the development of the environment and which
can also be combined. They also have a political dimension
and involve power relationships, particularly political
ecology, by varying points of view, temporalities, and
geographical scales (Lotfus, 2019).
6.2. Between territorialisation and
ecologisation : the role of the circular
economy for real structural change
The circular economy, presented as an economic model
that can reconcile economic growth and environmental
protection, has emerged in response to the limits of our
current modes of production and consumption. Recognised
by public opinion, this new economic model, which is an
alternative to the linear economy, is currently integrated
into public policies and the socio-ecological and energy
transition strategies of various countries. In the EU, the
"European package" is composed of four directives that
16 ESPON // espon.eu
Topic Paper // Structural change of regional economies
the Member States must adopt in their respective
legislation (European Commission, 2017).
In terms of local anchoring and territoriality, the challenge
is to design a strategy for the systemic and transversal
deployment of approaches, involving all the activities of
the territory and its actors. Therefore, the circular economy
must be part of a global territorial project and be the
subject of processes and policies adapted to the local
level. From this perspective, there is a need to contribute
to the relocation of supplies, the consumption of local
products, the mobilisation of territorial innovations, and
their appropriation by various local actors, particularly
around recovery and recycling activities. These concerns
go beyond the creation of job-creating activities anchored
in the territory, and also concern the contribution to the
reduction of greenhouse gas emissions at a local and
global level, the limitation of the waste of resources, and
the capacity to make territories more attractive,
competitive, and resilient through the implementation of
innovations of all kinds.
By producing these positive externalities in a context of
ecological transition and territorial change, the circular
economy could respond to the territorial challenges of
competitiveness, resilience, enhancement of specic local
resources, and remobilisation of actors on issues of
territorial governance (Bourdin and Torre, 2020).
From a scientic point of view, several problems remain:
from what geographical distance can we still consider a
territorial project of circular economy? What is the
articulation between the dierent territorial levels? What
territorial governance between the dierent stakeholders?
What externalities are produced, and how can they be
evaluated? The evaluation work consists of identifying,
quantifying, and measuring a set of indicators of direct
and indirect impacts of these approaches. However, there
is a big gap in the availability of harmonised data on a ne
scale. Their exploitation would make it possible to
understand how the circular economy can be a lever for
structural changes in regional economies.
17ESPON // espon.eu
Topic Paper // Structural change of regional economies
7.
Conclusions
In conclusion, this is truly a new form of globalisation and new ways of working that should come about in the wake of
the coronavirus crisis. The coronavirus crisis has further highlighted the importance of tackling climate change and
demographic change, which, if left unaddressed, could lead to a weakening of cohesion in Europe. This globalisation
will have to be geared towards anticipating future risks, focusing on the long term, on a change in value chains and the
organisation of companies, and in terms of a European political response. According to economists, this crisis should
only be temporary. Nevertheless, it gives us many opportunities to imagine the world of tomorrow, a world with greater
concerns for sustainability and precaution to be able to protect ourselves more easily from risks, hazards, and failures
of all kinds that could weigh on our cities and regions in the years to come.
There are many structural projects: urban planning, housing, reducing individual motorised transport, developing short
circuits, relocating activities, limiting over-consumption, reducing the use of fossil fuels, maintaining public services in
remote territories, etc. However, the actual conguration of cities, roads, millions of dwellings, and individual vehicles
already prevent any change of course in the short term. They imply dependencies on the initial path. Radically changing
a housing stock and urban planning involves, for example, decades of work and investment. The implementation and
nancing of these long-term policies will depend rst and foremost on our economies' capacity to nance them.
Therefore, cohesion policy must play a decisive role, and the European Commission's economic recovery plan is a step
in this direction.
18 ESPON // espon.eu
Topic Paper // Structural change of regional economies
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Ontario.
19ESPON // espon.eu
Topic Paper // Structural change of regional economies
500 km
Malta
Acores (PT)
Guyane (FR)
Madeira (PT)
Reunion (FR)Mayotte (FR)
Canarias (ES)
Liechtenstein
Martinique (FR)
Guadeloupe (FR)
Regional typology of eGovernment interactions
Regional level: NUTS 2/1 (2013)
Source: ESPON, 2017
Origin of data: Eurostat, ESPON 2020 Data and Map Updates, 2017
UMS RIATE for administrative boundaries
© ESPON, 2017
Share of people who have interacted with public
authorities online 2016 and the annual change
in the share people who have interacted with public
authorities, 2008-2016
high interaction, high growth
high interaction, medium growth
high interaction, low growth
medium interaction, high growth
medium interaction, medium growth
medium interaction, low growth
low interaction, low growth
low interaction, medium growth
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