This chapter summarises the key findings from 12 regional cases studies conducted over the course of this project across four OECD countries that include France, Germany, Italy and Slovenia. The case studies cover a diverse range of rural areas (non-metropolitan close to a medium-sized city, non-metropolitan close to the small city, and remote rural regions) as well as various types of manufacturing activities. These case studies deliver a practical deep dive into how manufacturing can evolve as a continued source of regional development, particularly with the right strategies, resources and co-ordination across policy areas. The chapter takes stock of some of the main recommendations identified in the case studies.
The Future of Rural Manufacturing
OECD Rural Studies
6. Lessons from 12 regional case studies
Abstract
Rural manufacturing observed
The tertiarisation of our economies and delocalisation of industry to emerging economies has brought about an interesting debate for rural places since they do not have the agglomeration effects and density to be productive in services. Industry has been the backbone of many rural areas and continues to provide many jobs, income and security. Manufacturing has one of the highest multiplier effects and is a strong driver of productivity and innovation, particularly in rural areas. Recent global events such as the COVID‑19 pandemic and Russia’s war of aggression against Ukraine have further fuelled conversations pertaining to reshoring and nearshoring1 in OECD countries, leading to opportunities for rural areas within to profit from these changes.
As such conversations relating to industrial policies have reignited whilst acknowledging the importance of a place-based approach. Industry can be a source of prosperity, particularly for rural regions. Economic and social prosperity go hand in hand and must take account of the digital, technological and ecological transitions. Such conversations highlight how national industrial strategies that are based on a good understanding of the resources across their territory and with effective communication across the levels of government can also lead to successful regional development.
This section draws out the key findings from four country case studies conducted over the course of this project. They provide an opportunity to test the frameworks developed in earlier chapters and help understand how manufacturing has been evolving in rural regions. They also help better understand the impact megatrends have in manufacturing and rural development and draw lessons on effective policy responses.
The case studies were selected to cover the range of different types of rural areas (non-metropolitan close to a medium-sized city, non-metropolitan close to a small city and remote rural regions). They were also selected to cover the various types of manufacturing through the typology developed based on the share of manufacturing employment over the last two decades (traditional, moving up, moving down, stable manufacturing hubs). Table 6.1 indicates these groupings, noting the boundaries align with the OECD TL3 typology and thus may not match national or local statistical groupings.
Table 6.1. Case study regions
Note: Manufacturing typology relates to the change in the share of employment in manufacturing relative to other regions in that country. See Chapter 4 for further explanations. Geographical typology refers to OECD TL3 typology defining metropolitan (large MR-L and medium MR-M) and non-metropolitan regions (near a large city NMR-M, near a small city NMR-S and rural region NMR-R) across five types (see Box 2.1 for further details).
What was most notable in each of the regions was how closely the sense of regional identity was tied to the manufacturing conducted there. This confirms the findings from earlier chapters relating to the path dependency of manufacturing with regards to a source of economic development but also an integral part of the social fabric. Analogous to the emergence of personal identities around traditional artisanal skills in the pre-industrial era, several regional industrial identities have emerged since the Industrial Revolution. Local products have made their places of origin famous, leveraging local assets and skillsets to build a source of identity, pride and prosperity. In some cases, particularly in Italy, clusters of small and medium-sized enterprises (SMEs) developed around several traditional sectors (e.g. textiles, footwear, furniture), forging regional industrial identities that were strengthened by the close co-operation of their component SMEs in tightly bound local subcontracting networks.
Over the case studies, there were several areas of policy challenges and opportunities that stood out across several regions.
Existing clusters were utilised as a reactive forum through collaborations relating to regulations, gas price shocks or COVID-19 vaccine supply concerns. However, there are opportunities to better utilise these networks formed within clusters alongside universities and technology hubs to orientate production to greener and higher value-added items.
Increasing the focus on digital infrastructure in rural places was identified as an opportunity to better benefit from the growing importance of service-related occupations in manufacturing, which are, on average, 30% of jobs in OECD countries but closer to 90% in higher technology manufacturing.
Almost all case studies identified skills shortages. The case studies, however, showed the need to match existing efforts to attract talent, with efforts to improve employer demands to align with the future direction of the sector, this through improving the employer’s understanding of the evolution of the future of rural manufacturing as well as designing training courses that match rural needs.
Many case studies showed how land use permits and regulatory barriers represented a bottleneck for entrepreneurial activity. With regard to effective land use, the case studies also revealed different visions across levels of government on the ambition of manufacturing with cultural preservation. Finding better agreements and alignment of policy can reduce substantial planning permission delays.
The case studies revealed that not all firms interviewed and examined had strong ambitions of integrating into global value chains. Other ambitions were voiced. Policies should recognise the importance of cultural heritage production as well as global value chain inputs to increase the potential opportunities for high value-added production.
Several cases showed a disconnection between visions and strategies specific to rural manufacturing across ministries and levels of government. Thus, opportunities to better align these visions through collaboration and information sharing exist.
Against prior belief and despite what many policy makers anticipated, access to funding by smaller firms was not the main challenge. Improving the entrepreneurial culture may help many agriculturally focused SMEs orientate to higher value-added activities through enhanced linkages to manufacturing and tourism. At the same time, highly productive and ambitious firms should be supported by building SME-multinational/large firm linkages to allow knowledge absorption.
Whilst these areas were common across many of the regions, some were more prominent in specific ones. Table 6.2 outlines more clearly where these overlaps exist. It is to be noted that the table highlights relative gaps and does not indicate that related challenges do not exist there. For example, whilst the regions in the study in Germany and Slovenia also faced struggles relating to accessing labour, the depth of this challenge can be considered less so than those in France and Italy. One reason relates to the geographic proximity to relevant labour markets being greater in the former two countries’ regions.
Table 6.2. Commonalities in policy challenges across case study regions
The case studies provided an opportunity to understand the drivers of change in employment manufacturing over the last two decades and, thus, the required policies to push forward their development. As the case studies were selected based on the typology developed in earlier chapters, comparisons across regions using this typology were clearer to make. Our data analysis identified no clear silver bullet for a moving-up region relative to another. Figure 6.1 identifies the traditional regions within the case study. Each is in a different stage and, thus, the focus of their policies is best placed under these umbrellas.
Figure 6.1. Industrial transition policies differ based on starting positions
Country-specific assessment and recommendations
The following chapter briefly introduces the manufacturing landscapes in the regions studied across the four countries and provides a range of recommendations. More in-depth information can be found in the individual reports found adjacent to this document.
France
Description
France’s manufacturing sector ranks 8th in the world (Polyglot Group, 2023[1]) in terms of economic size. The case study focused both on the regions but also the national strategy of Industrial Territories (Territoires d’industrie, TI) policy, which is part of a state and regional strategy for industrial regeneration and regional development. The two cases were selected in collaboration with the Agence nationale de la cohésion des territoires (ANCT) to provide a concrete description of challenges and good practices. These were the inter-departmental TI Gers/Tarn-et-Garonne (Occitanie region) and the TI Haut-Jura in the Jura department (Bourgogne-Franche-Comté region).
Main findings
With the TI programme, France is seeking to re-industrialise and strengthen regional development and cohesion. The aim is to strengthen the country’s competitiveness and industrial sovereignty by building on local dynamics and tackling the structural deficit in the balance of trade.
Since 2018, this programme has aimed to implement concrete responses to the challenges industry faces in rural areas, in particular employee mobility, land availability and skills development. The TI programme is structured around several key areas: the attractiveness of rural areas for industrial jobs; training, recruitment and mobility of employees to meet companies’ labour needs; the digital and ecological transition; the availability of land and the revitalisation of brownfield sites, in particular by simplifying administrative procedures. A key strength of the programme is that it mobilises national, regional and local players in support of the development of regional industry and brings together local partners in each TI region around a private (industry) and public (locally elected representative) pairing to build a tailor-made action plan based on the issues and needs expressed at the local level.
The TI programme covers 149 territories – inter-municipalities or groups of inter-municipalities – located in rural areas, peri-urban areas and small and medium-sized towns throughout France and the French overseas territories. These areas have a strong industrial identity and know-how and are seeking to strengthen their industrial dynamics and strategies. In the TI regions, the industrial employment rate is higher than elsewhere (15.3% on average compared with 9.5% outside the IT regions).
The TI programme makes it possible to target all existing or dedicated strategies, policies and budgets around reviving industrial activity on the ground. Each TI is based on a contract, which may or may not be formal, setting out the social commitments of the project sponsors, the region, the state and its operators, and the various public and private partners for a period of four years. This contractual framework enables the specific objectives of the project to be aligned with regional and national guidelines. For the second phase of the programme (2023-26), the five priorities are skills, innovation, land, the ecological and energy transition, and governance and management of the programme. The evaluation of the TI programme on the implementation of the 2019-22 period will begin with this second phase.
The two regions of France vary in their definition of the degree of manufacturing. Figure 6.2 illustrates these regional classifications across France. Focusing on the regions for the case study, Tarn-et-Garonne (Occitanie region) appears to be a département that has seen a decline in manufacturing activity. This département is surrounded by others, including the Gers, where manufacturing activity has stagnated or even increased. On the other hand, the region of Haut-Jura in the Jura department (Bourgogne-Franche-Comté region) appears to be a traditional manufacturing centre where activity in this sector has been high over the last two decades and continues to be so. Note that the regions are bordered differently from that of the TI programme and are instead based on OECD TL3 definitions (see Fadic et al. (2019[2])).
Figure 6.2. Manufacturing activity by manufacturing type across France
Source: Based on the OECD Regional Statistics (database), https://www.oecd.org/regional/regional-statistics/
Policy recommendations
Recommendations cover both those for implementation by the regions themselves and considerations at the national level regarding the TI programme. Recommendations cover policy tools with a wide area of focus including the development of a strategy and visions, skills and labour policies, entrepreneurial support and a broader physical, digital and regulatory environment.
Table 6.3. Table of recommendations for France
Slovenia
Description
Over the decades, Slovenian industrial strategy has focused successfully on attracting foreign investment in high-technology industries such as electronics, pharmaceuticals, automotive and aerospace. Through the promotion of innovation and technology transfer, as well as investment in infrastructure and education, it has built a plethora of national champions. The geographical distribution of the density of these success stories, however, is not equal. Earlier periods of transition saw a rise in inequality between urban and rural areas and many rural areas experienced declines in rural populations. Through various European Union funds, Slovenia has actively focused on improving quality of life in rural areas through initiatives such as improving rural healthcare, education and transport services. Today, whilst these disparities have decreased and Slovenia performs well in indicators such as employment rates, its overall global competitiveness is stagnating. In addition, with more recent challenges, such as rising energy costs and consequences of the COVID-19 pandemic, a new approach that effectively utilises its resources across its various regions can help Slovenia achieve its potential and simultaneously reduce regional inequalities.
The region of Podravje, although presenting many rural aspects with regard to the OECD typology, is considered a medium-sized metropolitan region. The region has seen an increase in manufacturing over the last 20 years. It is home to several important industries, including paper production and developing interests in pharmaceuticals and automotive manufacturing. Goriška is defined as a non-metropolitan region close to a small city and has been somewhat involved in the manufacturing sector over the last 20 years with limited change in its share of employment in manufacturing relative to other regions in Slovenia. Based in the west of the country, it is considered a positive region with many economic indicators above the Slovenian average. Koroška, on the other hand, is a non-metropolitan rural remote region that has been a traditional manufacturing hub for several decades, being a region in the top quintile of manufacturing employment in Slovenia over this time period with a particular focus on wood, metalworks and more recently electronics.
Figure 6.3. Manufacturing activity by manufacturing type across Slovenia
Source: Based on the OECD Regional Statistics (database), https://www.oecd.org/regional/regional-statistics/
Main findings
The regions studied hold a great number of assets, potential and opportunities. First, Slovenian industrial champions are international, innovative and strong performers. Spin-offs creating new companies around them provide a strong anchor for the regions. At the same time, some niches could be even better explored and could increase competitiveness by seeking alternative programmes.
The high quality of life present in the regions is a key pillar of regional attractiveness. The outdoor pursuits, fresh air and other assets in terms of quality of life are often sought after and some firms are leaning into this. What is more, Slovenians are attached to their regions, with populations amongst the lowest ranking in terms of mobility. Even when they leave cities in search of better job opportunities, they often remain attached to their regions of origin, actively seeking opportunities to return. This attachment must be capitalised upon.
Middle-sized farms have the biggest potential. Young farmers taking over with higher education link with manufacturing and schemes such as “intergenerational transfer of knowledge”- where the transferee transfers knowledge for three years after the handover the farm to the new generation and receives payment for this knowledge transfer, can further boost this transition.
The case study also pointed to a few challenges and areas of opportunity, which, if tackled effectively, could strongly boost the performance of the manufacturing sector and regional development. They include the following.
Improving multi-level governance:
Regions want their regional development plans to be systematically and effectively heard. Whilst formal channels exist, their mechanisms are unclear and underutilised. Thus, an effective process would be highly beneficial.
There are no meaningful integrated strategic documents and there is a significant lack of co‑ordination capacity and oversight. Each ministry or region has its own approach at the national level, often with overlapping goals. The new restructuring of ministries since the field visits aims to advance on this front.
There is room to better integrate and align regional development policy and rural policy.
Vertical and horizontal co‑operation should be improved in order to encourage collaborative strategies and goal-setting between all kinds of actors – public institutions, research and academia and businesses, among others. Communication between regional development agencies and national bodies can be improved.
On some occasions, bureaucracy was identified as a bottleneck in the development of projects, both publicly (roads) and entrepreneurially (land).
Challenges related to companies:
In some regions, skills shortages are driven partly by depopulation due to their lack of attractiveness to a young, educated workforce. However, there is a strong role for companies themselves to improve attractiveness, including upgrading and replacing routine tasks with automation to make use of the higher-educated workforce and non-financial company incentives.
Labour shortages also require a more flexible education system.
Although there are sufficient resources available for research and development (R&D) and innovation activities, more can be done to incentivise a culture and open model of innovation by widening the economic base of participants in the schemes.
Business zones could be more operational and better managed.
There is insufficient valorisation of local value chains in products of competitive advantage (agri-food industry) and strengthening of the network between stakeholders from different industries in local areas (farmers, Hotel/Restaurant/Cafe, distributors, retailers...) and inter-industry organisations.
Infrastructure-related issues, particularly the lack of connectivity, remain a regional problem that is often highlighted:
Granting process is slow for both housing for (immigrant) workers and for the development of businesses.
Transport infrastructure makes logistics particularly difficult, specifically road improvements and a need for revamping railway lines (people and goods) to increase the movement of people and goods in a relatively small country.
Advertisement of existing high well-being standards, including cycle paths and tourism infrastructure, could be improved, increasing the attractiveness of life in rural areas.
Management of water and protected areas could also be improved.
Globally, regions would like the national governments to take into consideration the following challenges:
Give continuity to projects and activities after European Union funds have run out.
Have a wider strategic view of the education system and links to university hubs and talent centres that consider future developments such as the rise in artificial intelligence.
Better interlink the different innovation hubs (parks, centres, incubators) to ensure they are not fragmented and can take on the advantages of the innovation ecosystem developed.
Help promote the concepts of ecoregions (green industry, green agriculture and food production, green tourism). An example that can be further replicated is the current scheme for medium-sized farms who can apply for all investment interventions and receive support in the form of grants of up to 50%, and up to 75% for investments that have a beneficial effect on the environment go a long way.
Help link manufacturing sectors to wider sustainable tourism to create more value-added in manufacturing activities.
Further build cross-border co‑operation/development and reduce the current cross-border gap and retain the highly skilled labour currently moving away.
Policy recommendations
The case studies identify several broad recommendations for Slovenia as a whole as well as recommendations for each of the three regions across a number of areas. These are summarised in the following table.
Table 6.4. Table of recommendations for Slovenia
Germany
Description
Germany has a well-developed and strong manufacturing sector that makes an important contribution to rural productivity and the well-being standards of rural citizens. Manufacturing, on average, employs 23% of the rural workforce and contributes to 28% of rural gross value added (GVA) in Germany. Regionally, however, contributions can vary significantly based on the regional economic profiles.
Sigmaringen has a heterogeneous manufacturing profile without a clear hub or centre. Most companies are dispersed and part of different sectors. This makes the region more resistant to sector-specific shocks but also reduces benefits due to limited cluster activities. Overall, manufacturing includes a variety of mechanical engineering activities, from vehicle construction to aerospace technology, as well as the production and processing of rubber and plastic goods. Sigmaringen has an above-average manufacturing GVA (32%) and employment share (30%). It has also seen an increasing employment share over the past years relative to other regions, making it an upcoming manufacturing hub.
Tuttlingen is Germany’s manufacturing champion, with a highly specialised economy. The district GVA has a 57% manufacturing share and 49% manufacturing employment share, higher than any other sector or other rural district in Germany or the OECD. The district’s manufacturing sector can be classified as traditional and innovative, with a high potential for scalability and tradability. The region is known for producing medical devices, surgical instruments, orthopaedic solutions and diagnostic systems.
Ostprignitz-Ruppin, located in the state of Brandenburg, has been experiencing new economic dynamism since German reunification. In recent years, it has particularly benefitted from the proximity to the federal capital of Berlin. The district was able to significantly reduce unemployment between 2005 and 2020, from 16% to 3%, and has experienced a fast increase in manufacturing labour productivity from around USD 62 000 to USD 87 000 (over the period of 2005 to 2020), thus catching up with other manufacturing regions and categorised as a moving up hub. At the same time, Ostprignitz-Ruppin is remote and has a lower population density (40 inhabitants per square kilometre) than the rural average in Germany (138 inhabitants per square kilometre). It also has a greater focus on agriculture and forestry industries than other case study regions.
Hochsauerlandkreis is the geographically largest district with the second lowest population density in the state of North-Rhine Westphalia. It has a robust economic base with an above-average specialisation in manufacturing. Manufacturing accounts for 30% of Hochsauerlandkreis regional GVA and 27% of its employment share. Yet, compared to other rural places in Germany, the district shows below-average performance in manufacturing labour productivity (USD 86 112 compared to USD 91 312 rural average in 2019) and has slightly decreased employment shares in manufacturing over time (27% in 2019 compared to 29% in 2005 and close to 32% in 2000). Traditionally, the building industry, particularly lighting, has a strong presence, accounting for 65% of the European market. Likewise, automotive and medical technology manufacturing as well as timber production, are well represented.
Figure 6.4. Manufacturing activity by manufacturing type across Germany
Source: Based on the OECD Regional Statistics (database), https://www.oecd.org/regional/regional-statistics/
Main findings
More broadly, Germany does not have a specific rural manufacturing policy. Policies that are relevant for rural manufacturing can broadly be categorised into: i) regional economic development policy, which focuses largely on addressing disadvantaged areas and building bottom-up structures; ii) rural development policy, which focuses on raising well-being standards and service delivery; and iii) industrial policy support structures that do not have any regionally specific components but which are focused on SMEs. This report finds that the different policy areas relevant to rural manufacturing are gradually complementing each other, a welcomed and important development to address rural development challenges in a holistic manner. In selected industries such as the automotive sector, place-based policy is moving towards taking a more proactive stance, focusing increasingly on anticipating upcoming and ongoing transformation processes for strong rural regions.
Still, ongoing megatrends and structural change pose challenges to German’s policy-making process, exposing a lack of agility and dynamism in its design and implementation. To ensure rural firms remain competitive, policies need to adjust and respond more quickly to changing external conditions that are shaped by digitalisation, amongst other factors.
Germany may benefit from increased policy agility and experimentation in policy making to accommodate for fast-paced change and potential future shocks through foresight, greater evaluations and increased co‑ordination and expanding the use of regulatory sandboxes.
Skills availability remains a challenge, both in remote regions and regions with good links to key cities where salaries are higher. Despite the flexibility of curricula and many technical colleges in the regions, a clear indication of direction is challenging to identify across stakeholders. Thus, there is a need to map the skills needs of today and to those that are forthcoming. This should be done regularly to update state and regional policy accordingly. Developing crosscutting skills in digitalisation (e.g. digital literacy) and sustainability through integration. Increasing efforts to attract and retain youth, women and migrants through various flexible training programmes as well as links across the private sector and academia could aid in this challenge.
Land use planning at the state and regional levels is currently one of the largest barriers to scaling up for many thriving entrepreneurs. Allowing more flexible approaches through the establishment of specific zones in a community can help. This is because they are more open to experimentation and temporary uses as well as fostering inter-communal co-operation for land development. Bureaucratic barriers across access to programmes were also established as challenges to entrepreneurial growth.
Policy recommendations
Overall, the case studies revealed two overarching areas of focus:
Building vibrant ecosystems through the establishment of an entrepreneurial culture in schools via links with firms, encouraging state-run structural programmes that follow a bottom-up development and aid information sharing across states.
Facilitating access and uptake of support programmes by reducing bureaucratic barriers and increasing digitalisation (European Union, federal and state levels) and improving navigation (state and regional levels).
In addition, the table below highlights key policy recommendations for each region.
Table 6.5. Table of recommendations for Germany
Italy
Description
Italy is one of the strongest manufacturing countries in the European Union, ranking third (after France and Germany) in terms of total manufacturing turnover and value-added, second after Germany in terms of total employment and first counting the total number of enterprises (Eurostat, 2023[3]). The structure of manufacturing in Italy is mostly based on SMEs. These, on average, are smaller than the other EU direct competitors and are mostly located in relatively small territorial areas with a high level of specialisation in some sectors. These areas are usually recognised as being the site of clusters, also known as Italian industrial economics or industrial districts.
The Italy case study on rural manufacturing focuses on two regions in the wider region of Tuscany of Arezzo and Grosseto. Tuscany is one of the Italian regions where manufacturing has for a long time been, and still is, one of the main drivers for economic development. Economically, Tuscany was harder hit by the consequences of the COVID-19 pandemic than other regions of Italy due to its specialisation in the production of semi-durable consumer goods, which have suffered a fall in demand, particularly foreign demand, and to a greater extent than other types of production. Tuscany is also more dependent on tourist spending, which has been significantly affected by this crisis. Both manufacturing and tourism quite promptly recovered in the pandemic aftermaths, although not necessarily to their full extent.
The two regions, however, are very different both geographically and in manufacturing specialisations:
Arezzo’s economy is highly developed in terms of manufacturing (26.35% of its GVA), whose share on the regional GVA is 60% higher than the Italian average. It has a strong SME endowment with industrial districts specialising in jewellery – the leading district of the province with about 1 300 companies and 9 000 employees – textile and apparel, leather and footwear. Several companies are located next to urban centres and most in the surrounding rural areas. In addition, the GVA share generated by agriculture in Arezzo (3.2%) is almost twice the Italian rural average (1.9%). As such, Arezzo has a prominent manufacturing sector that has developed in a rural environment where agriculture is still important for the local economy.
Grosseto is a large, sparsely populated rural province with a focus on the primary sector, with manufacturing less of a focal point. It has developed a food processing sector inland, with small, scattered artisanal workshops often devoted to offering services, such as equipment maintenance and repair, etc., to local agriculture producers. Some SMEs are suppliers of regional industrial districts located in other bordering provinces. In addition, the province features some industrial manufacturing activities which are located along the Tyrrhenian Coast, with a few big chemical plants (sulphuric acid, titanium oxide) in the municipality of Scarlino.
Figure 6.5. Manufacturing activity by manufacturing type across Italy
Source: Based on the OECD Regional Statistics (database), https://www.oecd.org/regional/regional-statistics/
Main findings
The case studies reveal a number of challenges, opportunities and policy recommendations. If tackled effectively, the challenges could boost the performance of the manufacturing sector and regional development. These include the following elements:
Pursuing a higher degree of integration between rural development and industrial policy can lead to more effective actions for rural manufacturing at all levels. Rural manufacturing is not a policy domain per se. Still, a number of policies and programmes offer a wealth of opportunities for rural manufacturing, particularly with the use of Italy’s Inner Areas Strategy3 that allows the differentiation between rural areas to be very clearly identified and developed. A higher and stronger integration between sectoral and territorial policies is yet to be seized.
Steps to address the skills gap are slowly being taken but more can be done. There are skill gaps in both regions due to a combination of ageing, brain drain, lack of or weak proximity services, perceived marginality of remote rural areas, etc. At the same time, a well-structured education and training system is in place at the larger regional scale but also often with quite a capillary presence at the local level. Tackling this paradox requires parallel action in two factors:
Making matchmaking between skills offer and demand perform better as a system, with training institutions and businesses finding new and more effective communication and collaboration channels.
Enhancing the appreciation of local quality of life in rural environments and in smaller centres as a source of attraction, which is already a trend triggered by the COVID-19 crisis.
Accessibility challenges remain, including physical transport infrastructure deficiencies, digital connectivity bottlenecks and difficult access to primary services. Small businesses are particularly sensitive to these framework-enabling conditions. Targeted policy responses are needed to allocate public resources effectively with the aid of public-private common initiatives and investments.
Traditional know-how must embrace change and innovation. Rural businesses often specialise in niches linked to traditional know-how and local consolidated cultural heritage, and show a smaller tendency and less openness to innovation. In such contexts, path dependency is a common risk affecting local industrial systems that must be rectified in order to make use of the special skills and take advantage of new markets and globalisation directions.
Policy recommendations
The case studies identify a number of broad recommendations for the two provinces across a number of areas.
Table 6.6. Table of recommendations for Italy
References
[3] Eurostat (2023), “Businesses in the manufacturing sector Statistics Explained”, https://ec.europa.eu/eurostat/statisticsexplained/ (accessed on 17 July 2023).
[2] Fadic, M. et al. (2019), “Classifying small (TL3) regions based on metropolitan population, low density and remoteness”, OECD Regional Development Working Papers, No. 2019/06, OECD Publishing, Paris, https://doi.org/10.1787/b902cc00-en.
[1] Polyglot Group (2023), Manufacturing Industry in France | The Polyglot Group, https://www.thepolyglotgroup.com/fr/industries/manufacturing/ (accessed on 8 March 2023).
Notes
← 1. Reshoring can be defined as bringing business operations, manufacturing, or sourcing activities back to the company's home country. Nearshoring can be defined as relocating operations to a neighbouring or nearby country, typically within the same region or continent. See https://www.thomasnet.com/insights/reshoring-vs-nearshoring/
← 2. EU based concept relating to links between activities for the development of rural economy, see https://ec.europa.eu/enrd/leader-clld/leader-toolkit/leaderclld-explained_en.html for more details.
← 3. See https://ec.europa.eu/enrd/sites/enrd/files/tg_smart-villages_case-study_it.pdf for a comprehensive definition of the strategy for inner areas.