Jobs, skills, innovation and investment are clustering in capital regions and large cities. This concentration boosts productivity and creates new opportunities. But it can also widen gaps with other places that risk being left behind.
Regions and Cities at a Glance provides new evidence on these gaps, and how differences across regions are evolving. It shows where productivity and population are growing, where housing and infrastructure are under pressure, and where demographic and climate risks are intensifying. Together with the OECD Local Data Portal, it gives governments evidence to adapt policy to different regional circumstances.
Population ageing and decline will make regional economic gaps harder to close. Many regions outside capital regions and large cities are losing working-age residents and attracting fewer newcomers. By 2045, metropolitan regions are projected to grow fastest, or shrink least, in 27 of 33 OECD member and accession countries with available data. Regions far from a midsized or large city are projected to grow least, or shrink most, in 23 out of 31 countries with such regions. With fewer workers, these regions will increasingly depend on stronger productivity growth to raise incomes. Yet productivity is currently growing more slowly outside capital-city regions. Between 2018 and 2024, median annual productivity growth across regions in 34 OECD Member and accession countries was 0.86% in capital-city regions, compared to 0.54% in other regions.
Artificial intelligence could widen these gaps. Regions that already bring together skilled workers, innovative firms and investment are better placed to benefit first. In large regions with the highest shares of tertiary-educated workers across 29 OECD countries, 52% of employment is in occupations highly exposed to generative AI, compared with 42% elsewhere. Enabling adoption everywhere will require the right fundamentals in place, from high-speed connectivity to worker skills.
Success also creates pressures for capital regions and large cities. People follow jobs and opportunity, but housing supply has not kept pace. Across 23 OECD countries, housing is 27% more expensive in urban centres than the national average. When workers cannot afford to live near productive jobs, high housing costs restrict mobility and weaken the benefits of bringing firms and workers together.
Climate risks add another dimension to regional inequality. Nearly one-fifth of OECD large regions experienced warming of more than 1.5°C in 2021-2025 compared with 1981-2010. This puts additional pressure on health and care services and local infrastructure, with some regions much more exposed than others.
Different regional challenges require different responses. In high-demand cities, governments need to enable housing supply to keep pace with population growth. They also need better transport links to jobs, services and surrounding regions. These measures can improve access to productive jobs and ease pressure on housing and infrastructure. In regions losing workers and population, governments need to help firms raise productivity. This means strengthening skills and improving firms’ access to finance, infrastructure, research and innovation. Healthcare, long-term care, transport and other local services must also adapt to smaller and older populations. Climate adaptation should reflect differences in exposure and vulnerability.
Stronger regions make stronger economies. OECD Regions and Cities at a Glance 2026 gives governments the evidence to help more regions raise productivity, adapt to demographic change, build climate resilience, and offer better opportunities everywhere.
Mathias Cormann
OECD Secretary-General