Intermediary cities can be powerful drivers of smart, inclusive, and sustainable regional development. Located outside major metropolitan areas, these small and medium-sized hubs play an “intermediary” role by structuring the flows of people, goods, capital, and knowledge across surrounding urban and rural areas. This study, conducted as part of the OECD-EU project “Unlocking the Potential of Intermediary Cities for Regional Development”, focuses on Klagenfurt, the capital of the Carinthia region in the south of Austria. Applying the project’s analytical framework, the study examines Klagenfurt’s functions as an intermediary city. It explores the city’s role in a predominantly rural setting and the broader national urban system within Austria’s federal governance framework, highlighting both challenges and opportunities. The study provides policy guidance to enhance the city’s attractiveness by leveraging its rich natural environment and new high speed rail connections, while addressing underlying fiscal challenges.
