Shrinking Smartly and Sustainably

This project helps regions facing population decline and ageing adapt through smarter land use, better services and stronger governance, backed by data, case studies and global dialogue.

Shrinking Smartly and Sustainably: Strategies for Action

About

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Launched in February 2023 with support from the European Commission, the OECD’s Shrinking Smartly and Sustainably project helps regions and cities facing long-term population decline and ageing adapt in a way that is economically viable and environmentally responsible.

Through in-depth data analysis and international policy dialogue, the project supports better land use, housing, service delivery, and governance. It offers tools and strategies for national and local governments to plan spatially, manage infrastructure costs effectively, and enhance the well-being of residents.

With research, case studies from Korea, Finland, and Portugal, and peer-learning events, the project aims to equip policymakers with practical frameworks and best practices to navigate demographic change effectively.

Policy framework

Key messages for Shrinking Smartly & Sustainably

Policy recommendations

Demographic decline and ageing are long-term trends that demand a shift in planning, service delivery, and investment. Instead of assuming growth will return, governments must design policies for resilience, well-being, and efficiency. Integrating realistic demographic projections into regional strategies, rethinking infrastructure, adapting services for lower-density areas, and leveraging digital tools are key. Stable fiscal frameworks, stronger inter-governmental coordination, and improved demographic data will support long-term planning and inclusive policy responses.

As reversing demographic decline is difficult, policies must balance adaptation with targeted mitigation. Adaptive strategies ensure continued access to services, resilient infrastructure, and community well-being. Mitigation may be viable in areas with labour shortages or economic potential. Success depends on using local knowledge and tools such as digital health and smart service hubs. Strategies must be realistic, locally tailored, and address both challenges and opportunities to foster regional resilience.

Policies should be place-based and designed at functional scales – like commuting zones or service catchments – to reflect how people live and access services. This improves service delivery efficiency and targets investment where it is most needed. Intra-regional disparities also matter; neighbourhoods may age faster or decline differently. Tailored responses require granular data and cross-sector co-ordination. Funding mechanisms should reflect local demographic needs, and urban-rural co-operation can help regions share resources and avoid inefficient competition.

Outdated spatial plans and sprawling development can worsen the effects of population decline. Land use and housing policies must support compact, efficient, and sustainable development. Updated spatial plans should reflect demographic projections and support revitalisation, especially in shrinking or ageing areas. Vacant properties should be reused, rural housing stock renovated, and environmental goals integrated. Accessible, energy-efficient housing and adaptive reuse of buildings can strengthen local economies and enhance livability.

As populations age, places must adapt to remain inclusive and vibrant. Policies should strengthen community-based care, support informal carers, and invest in healthcare training and digital tools. Rural and urban mobility must be inclusive, and mobile services expanded. Age-friendly housing, public spaces, and transport systems help reduce isolation and promote active ageing. Promoting inter-generational engagement and innovation in ageing-related sectors can support economic resilience and improve quality of life.

Demographic change affects all sectors and requires integrated responses. Governments must build shared strategies based on demographic data, aligned across ministries and levels of government. Inter-municipal co-operation, rural-urban partnerships, and participatory planning can improve service delivery and policy coherence. Local administrations need resources, skills, and platforms for collaboration. Inclusive governance that empowers communities is vital for long-term resilience in shrinking or ageing regions.

Shrinking populations strain public finances, especially at the local level. Governments must diversify revenue streams, improve tax collection, and tailor fiscal policies to demographic realities. AI and data analytics can enhance budget planning. Aligning budgets with regional strategies and using co-ordinated investment planning improves efficiency. Fiscal tools should be balanced to avoid dependency and ensure long-term viability. Supporting proactive planning and integrated service delivery helps governments do more with fewer resources.