Functional areas such as integrated local labour markets exist across countries’ entire national territory. However, most OECD countries have focused their work on larger cities and their surrounding area of economic influence by establishing the concept of functional urban areas. Extending this concept to non-urban areas can help policy makers analyse subnational developments and design spatially better-targeted policies.

The report Delineating Functional Areas for all Territories provides a comprehensive review of existing approaches to delineating functional areas across countries’ entire national territory as a tool for territorial statistics and regional policy making. The report explains the rationale for functional territories as a complement to established administrative geographies. It discusses the most important challenges and the methodological aspects of delineating functional areas based on travel-to-work commuting flows or novel sources of data and develops a set of methodological guidelines that are applied in five OECD countries, demonstrating the feasibility of delineating functional areas across diverse types of country geographies in a consistent manner.