Regions interact with the global economy in unique ways, making one-size-fits-all approaches to policy challenges insufficient. Amidst challenging economic, environmental, and social conditions, regions are increasingly tasked with adapting their unique strengths to provide a better quality of life for citizens. Understanding each region's specific assets and challenges – from economic connectivity to social well-being – is a first step. It is key for designing and implementing policies that attract investment and talent and promote local prosperity. Through the regional lens, territories can adeptly navigate change, ensuring their inclusive and sustainable development in the ever-evolving global landscape.
Regions in globalisation
The winds of globalisation are shifting – countries and regions are testing policies to usher in the green transition, harness technology and secure supply chains. Yet the playing field isn’t always level, neither between regions in different countries nor within countries. Moving to solutions starts with a better understanding of a region’s position in the global economy, its regional assets and the policy levers available to make places more inclusive, sustainable, and attractive.
Key messages
The OECD provides valuable data that helps to see how different regions contribute to and are affected by global economic trends. This data enables us to compare and contrast different regions, highlighting their unique strengths and gaps. This exercise is a diagnostic one – not a ranking. It considers human connections through international migrants and students, as well as economic integration indicators, such as foreign direct investments (FDI) and trade. The OECD continues to develop and analyse granular data on the embeddedness of regions in global value chains (GVCs), offering an in-depth understanding of regional and sectoral connections. Altogether, this rich collection of data and analysis sheds light on regions in globalisation.
The OECD equips policymakers with practical tools to strengthen the international position of regions. A core example is the OECD Regional Attractiveness Compass, which acts as a multi-dimensional guide cutting across policy areas. This compass not only pinpoints where regions have an international edge but also highlights areas requiring further efforts to stand out on the global map.
Context
Improving the position of regions in the global economy can boost resilience
Regions interact in the global economy in a number of ways. Foreign firms set up shop – often they will export their goods and services, as do local firms. Even within a country, the ways regions interact with the global economy can be very different, depending on what they produce and who is there to do the work. Many of these interactions are captured in OECD data, including the share of employment in tradeable sectors.
Foreign direct investment in environmental technologies
Greenfield foreign direct investment (FDI) in environmental technologies is highly concentrated in some regions. Global greenfield FDI data captures FDI flows that result in the creation of entirely new facilities from the ground up. At a time when investing in climate technologies is vital to promote the innovation and spillovers needed to address climate change, these disparities in the distribution of greenfield FDI highlight the importance of taking a regional approach when developing and implementing investment attraction policies.
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