Unlocking the Potential of Intermediary Cities for Regional Development

2. A consistent definition of intermediary cities

Abstract

Intermediary cities have been discussed in literature using various terms including small and medium-sized, intermediate, and secondary cities, highlighting different aspects of the roles and functions that these cities play in urban, regional, and national systems. Despite the growing recognition of the importance of intermediary cities, wide variations in definitions across countries persist, impeding comparative research and effective policymaking.

To address this gap, this chapter proposes a consistent definition of intermediary cities. First, it lays out a theoretical framework for defining intermediary cities, drawing on a literature review. The framework explores three key dimensions: size, hierarchy and function. Second, it maps existing national definitions of intermediary cities or related concepts, drawing on the results of the OECD survey on intermediary cities Finally, the chapter introduces a consistent definition of intermediary cities that will be used throughout the rest of this report, and presents the intermediary cities identified using this definition.

2.1. Literature review

2.1.1. City concepts defined by size

Small and medium-sized cities are often considered as specific policy targets due to their overall significance in a country’s urban systems. The OECD considers that small and medium-sized cities in OECD countries are settlements between 50 000 and 250 000 inhabitants (OECD, 2024[1]). It also defines small and medium-sized Functional Urban Areas (FUAs1) as those with a population between 50 000 and 100 000 inhabitants (small FUAs) and between 100 000 and 250 000 (medium-sized FUAs) (OECD, 2022[2]). In OECD countries, small and medium-sized FUAs account for 46% of the total number of FUAs (556 out of 1 213) (Figure 2.1). In the EU-27 countries, this number goes up to 59% (365 out of 616).

Figure 2.1. Distribution of FUAs by population size across OECD and EU countries

Note: Chart displays number of FUAs by population size (on a logarithmic scale). Blue histogram refers to FUAs in all OECD countries and green histogram refers to FUAs in EU-27 countries. Dashed line corresponds to the upper population threshold of intermediary cities as defined later in this chapter (250 000 inhabitants). Population referred to year 2010.

Source: OECD Regions, Cities and Local Areas database http://oe.cd/geostats.

Alongside the OECD definition, multiple definitions of small and medium-sized cities exist, typically using population thresholds or a combination of population thresholds and other criteria (e.g. jobs):

• Eurostat and ESPON have previously defined small and medium-sized towns and cities as having a population between 20 000 and 75 000 inhabitants (ESPON, 2024[3]).

• France’s National Institute of Statistics and Economic Studies (INSEE) defines mid‑sized cities as those that have a minimum of 5 000 jobs and a maximum of 150 000 inhabitants but are not regional capitals (INSEE, 2017[4]).

• In the United Kingdom, the Centre for Cities defines medium-sized cities as settlements that have between 250 000 and 500 000 inhabitants (Bolton and Hildreth, 2013[5]). This definition is based on “primary urban areas” as spatial units, which refer to the local authorities covering the built‑up areas of a city. The Office for National Statistics (ONS) defines small and medium-sized towns as built-up areas with populations between 5 000 and 20 000 inhabitants (small towns), and between 20 000 and 75 000 (medium-sized towns) (ONS, 2019[6]).

Intermediate cities are often used as a synonym for intermediary cities (Bolay, 2019[7]), but the term “intermediate” mainly refers to city size (i.e. neither large, nor small).2 As an example, intermediate cities are defined as cities with a population between 300 000 and 5 million inhabitants (Rodríguez‐Pose and Griffiths, 2021[8]). The Cuenca Declaration (2015) uses flexible population thresholds for intermediate cities.

2.1.2. City concepts defined by hierarchy

Cities are also commonly defined by hierarchy. Unlike the size-based concept, this concept considers the city’s relative significance in the urban system of a country (and at the global scale in some cases). Three main hierarchy-based concepts exist.

• Global cities or world cities, such as London or New York, sit at the top of the urban hierarchy as key nodes within the global economic network, facilitating flows of capital, information, and talent across borders. They host high concentrations of multinational corporations, financial institutions, and international organisations, making them integral players in global finance, commerce, and diplomacy (Sassen, 2013[9]). Unlike cities focused on regional or national ties, global cities benefit from extensive connectivity and influence beyond borders (Cardoso and Meijers, 2016[10]). Embedded in global trade networks and equipped with advanced infrastructure that supports international business operations (stock exchanges, corporate headquarters, and global media), they attract a highly skilled and diverse workforce, fostering cultural and intellectual innovations (Friedman, 1986[11]).

• Primary, first-rank or first-tier cities, often the largest cities within their countries, are defined by their disproportionate size and influence relative to other cities in the urban system (Jefferson, 1939[12]), as well as by their extensive urban functions. Typically, these cities exhibit a concentration of population, resources, and economic power that makes them dominant at the national level. Many of them are also national capitals, which positions them as political hubs. The dominance of first-rank cities in national networks separates them from intermediary cities, as the latter operate on a smaller scale and focus on connecting regional areas (Cardoso and Meijers, 2016[10]).

• Secondary, second-rank, or second-tier cities are generally smaller than primary, first-rank or first-tier cities. They are “those cities outside the capital whose economic and social performance are sufficiently important to affect the potential performance of the national economy” (ESPON, 2017[13]). They often serve as the largest urban centres in the region outside of the national capital, acting as regional capitals or major economic hubs, as their industries, services, and infrastructure contribute significantly to the national economy (ESPON, 2017[13]). Definitions of secondary cities commonly indicate that they are neither national capital cities nor primary economic centres within their countries, but occupy a middle position within the national urban hierarchy, remaining distinct from capital or first-rank cities in terms of size and influence, as they lack the extensive political and historical prominence of first-rank cities (Cardoso and Meijers, 2017[14]). They act as regional anchors, providing jobs, infrastructure, and services to surrounding areas, and thus play an essential role in balancing regional development (Cities Alliance, 2019[15]; Friedman, 1986[11]).

2.1.3. City concepts defined by function

Cities are also defined and classified by their primary functional characteristics (e.g. economic activities, cultural assets, universities) and roles (e.g. connecting local and global markets), regardless of size or hierarchy, which may require different policy approaches for their development.

Regarding intermediary cities, literature often emphasises their “bridging” role within territorial networks.3 This bridging role is twofold:

• Complementing larger cities and one another: Intermediary cities support polycentric urban systems by spreading economic activities and development assets across a country’s regions. They can host industrial districts, business and commercial complexes, and housing developments along transport corridors at the peripheries of large metropolises. As drivers of regional development, intermediary cities offer opportunities for decent jobs, affordable land, and housing, while often ensuring a higher quality of life – typically at a fraction of the cost of large cities.

• Supporting smaller cities, towns and rural areas: Intermediary cities facilitate access to urban infrastructure, services, and markets, creating opportunities for surrounding smaller settlements. They serve as connectors between urban and rural areas, acting as subnational centres of administration, manufacturing, agriculture, trade, and social and cultural services (UCLG, 2017[16]). By providing markets for agricultural produce and expanding essential services to rural populations, intermediary cities play a crucial role in regional development.

Literature further identifies the following eight functions which explain how these complementary and supporting roles operate (Figure 2.2).4 It is important to note that these functions are not unique to intermediary cities – larger cities or smaller towns may also perform them. The aim here is not to identify functions that are exclusive to intermediary cities, but rather to highlight those that are particularly important in enabling intermediary cities to fulfil their bridging role within territorial networks.

For each of the eight functions, the following sections present a definition and underlying rationale, together with an explanation of how the function enables intermediary cities to perform their bridging role and contribute to balanced regional development.

Figure 2.2. Eight key functions of intermediary cities

Source: Author’s own elaboration

Business

The business function focuses on providing essential business services, creating a more vibrant business environment for firms. Intermediary cities with a strong business function play a vital role in complementing larger business hubs, for example by hosting regional branches and offering other decentralised services. They also play a supporting function by hosting business-to-business (B2B) sectors, including ICT, finance, legal services, trade and exports, as well as start-up incubators and accelerators, often generating spill-over effects that benefit the wider region, including rural areas. Furthermore, these cities act as hubs for hospitality infrastructure, encompassing hotels, conference centres, and recreational facilities, which are fundamental to support a thriving business ecosystem.

Knowledge

The knowledge function can be defined by its capacity to foster regional competitiveness and innovation through the presence of higher education institutions and a skilled workforce. Intermediary cities with a strong knowledge function cities act as vital hubs for knowledge creation and dissemination. Their complementary role can also involve establishing regional branches or satellite campuses of larger or specialised universities, strategically prioritising local and regional outreach. This facilitates knowledge transfer from major urban research centres and strengthens regional knowledge networks among universities, businesses, and governments. Furthermore, “knowledge cities” play a supporting role by providing higher education opportunities for their catchment areas, attracting and retaining skilled individuals, and offering vocational education and training. By strengthening local human capital and expanding access to learning opportunities, they can help address skills shortages and reduce disparities in educational attainment between territories. Given the impending retirement of the “baby boomer” generation in many OECD countries, intermediary cities can play an important role in mitigating labour and skill shortages through applied research, vocational education and lifelong learning. Intermediary cities hosting specialised higher education institutions, research centres or innovation ecosystems can further facilitate knowledge creation, diffusion and transfer, generating benefits that extend beyond the city itself to surrounding towns and rural areas.

Transport

Cities with a strong transport function act as critical nodes, enabling efficient inter- and intra-regional connections and reinforcing the economic and social fabric of their surrounding areas. Often referred to as “gateway cities” (Box 2.1) or “transport hubs”, some intermediary cities play a complementary role by hosting key transport and logistics infrastructure, such as train stations, airports, bus terminals, and freight terminals that facilitate cross-border and regional mobility. This infrastructure enables the smooth flows of goods and people between regions. At the same time, these intermediary cities play a vital supporting role in ensuring regional accessibility. By providing public transport systems, road networks, and logistic services, they enhance access to jobs and essential services, while also strengthening regional and rural tourism.

Box 2.1. Gateway cities

Gateway cities, while they vary considerably in size, are distinguished by their function as connectors between local places and inter-regional or global markets. They act as entry points to broader economic networks, for instance by linking peripheral areas with larger, often international, economies. This gateway function is expected to enhance the flow of goods, services, and people (often in terms of migration), bridging local economies with inter-regional markets, and integrating regional resources into the world economy (Burghardt, 1971[17]; Scholvin, 2021[18]). They are essential in today’s globalised society, since they provide connections with inter-regional and global markets (Scholvin, Breul and Diez, 2021[19]). Gateway cities are also sometimes referred to as “basing points” of capital, integrating peripheral places into global economic flows (Friedman, 1986[11]; Surborg, 2011[20]). In addition to economic connectivity, gateway cities serve as connections to other destinations and access points to significant tourist destinations, such as national parks, historic sites, or areas of natural beauty. Typically, this connectivity is due to the presence of an international airport, major transportation hubs, or rail connections. These cities may draw visitors to regions rich in cultural heritage, quaint rural communities, or notable locations tied to famous historical figures (Rabbiosi and Ioannides, 2022[21]). Unlike global cities that are centres of corporate control and international finance, gateway cities primarily function as spatial intermediaries, facilitating connections without necessarily hosting major corporate services or headquarters (Phelps, 2017[22]; Sigler, 2013[23]). Their intermediary role underscores the unique value of gateway cities in economic, spatial, and cultural networks, making them indispensable for regional integration within globalised systems.

Source: (Burghardt, 1971[17]; Scholvin, 2021[18]); (Scholvin, Breul and Diez, 2021[19]); (Friedman, 1986[11]; Surborg, 2011[20]); (Rabbiosi and Ioannides, 2022[21]); (Phelps, 2017[22]; Sigler, 2013[23]).

Housing

Intermediary cities play an important housing function by accommodating residents who work outside their boundaries,5 thereby complementing larger urban centres and helping to ease housing pressure in more densely populated areas. By offering a diverse mix of housing options, such as social housing, worker housing, rental units for young professionals, housing with working space, and housing that brings urban amenities and design into rural areas, intermediary cities help ensure equitable and affordable access to housing that meets the varied needs of the regional workforce.

Satellite cities are typically defined by both their spatial proximity to large urban centres and their functional role within broader metropolitan systems. Located within commuting distance of major cities, they often emerge in response to population growth, urban sprawl, and shifting industrial dynamics. Satellite cities are frequently conceived as “developments or major expansions to existing settlements that are separated from the metropolitan core by belts of rural land” (Sorensen, 2001, p. 10[24]). These cities primarily function as “feeder” cities, offering more affordable housing for people who work in nearby metropolitan areas but seek a lower cost of living. In doing so, they help ease housing pressures in larger cities by absorbing population overflow. While economically dependent on their proximity to major urban hubs, satellite cities retain a degree of administrative autonomy and often provide essential services such as healthcare, education, and government functions. Some satellite cities, particularly planned “new towns”, have been purposefully developed to address challenges related to urban congestion and over-concentration. They may include mixed-use zones that integrate residential, commercial, and recreational spaces to create self-sufficiency and reduce commuting needs. In some cases, satellite cities evolve beyond their residential function to become innovation hubs or special economic zones, attracting businesses through targeted infrastructure and supportive policies (Van Leynseele and Bontje, 2019[25]). As extensions of the main city’s functional area, satellite cities play a vital role in regional urban networks, contributing to population management, and economic diversification and more balanced territorial development.

Culture

In intermediary cities, an emphasis on culture can drive urban revitalisation, enhancing the city's image, and improving residents' quality of life. The culture function of intermediary cities encompasses the provision of cultural services, cultural amenities (e.g., libraries, museums, theatres, galleries) as well as more generally supporting cultural and creative ecosystems (e.g. the production, dissemination and consumption of cultural and creative goods, services and experiences). The concept of the “creative city” has been given much policy attention over the past two decades (Scott, 2006[26]; Evans, 2009[27]). Here it is argued that strong cultural and creative ecosystems within cities foster innovation and economic growth. Moreover, there is strong evidence that cultural participation (such as visiting a museum, or going to the cinema) has a significant positive impact on health and wellbeing (Fancourt and Finn, 2019[28]) and can support community cohesion. Recent work has also highlighted the important role of culture in urban regeneration (OECD, 2025[29]). Culture-led regeneration strategies can include an emphasis on large-scale physical cultural infrastructure, grassroots and community-based cultural infrastructure, cultural and creative districts, and cultural events and festivals

While culture is an important aspect of all urban locations, for intermediary cities it can play a distinct role. In general, cultural and creative sectors6 are highly concentrated in large urban centres (OECD, 2022[30]). For example, in 2024, cultural and creative employment made up 9.5% of total employment in capital regions such as Berlin, compared to only 1% in some more rural regions (Eurostat, 2025[31]). However, smaller “micro-clusters” of cultural and creative organisations can be found in smaller urban and more rural settings, and many “secondary cities” have strong creative clusters and thriving cultural scenes (Siepel et al., 2020[32]). Moreover, as many creatives seek to leave capital cities due to increasing living costs and poorer quality of life, many are moving to peripheral locations and intermediary cities. Consequently, intermediary cities can bridge networks of creatives, from larger cities through to rural locations.

Culture is therefore important for intermediary cities in two ways. First, they can support regional cultural and creative ecosystems by forming a bridge between creative networks in larger cities and micro-clusters in more rural locations. Secondly, culture is important for the city itself, by making it more attractive to workers and tourists, and improving quality of life for residents.

Retail

Intermediary cities with a strong retail function play a complementary role in expanding the spatial reach of commercial activities by providing distributed access points. This reduces the need for consumers to travel to large cities, alleviates pressure on commercial spaces in metropolitan areas, and, over time, helps stabilise or reduce commercial real estate prices. Beyond their complementary role, retail-oriented spaces in intermediary cities anchor local economies and serve as important social infrastructure where residents gather, interact, and access essential goods and services. Local, independent retailers are particularly central to this function as anchors of community life: they generate daily footfall, animate public spaces and help creating a unique local identity (OECD, 2026[33]).

Market cities (or towns) offer goods and services to surrounding localities, such as access to essential services including healthcare, education, and other vital amenities that might not be available in more isolated areas. Despite their modest size, they are essential to the economic and social fabric of rural regions. Traditionally hosting regular markets for agricultural products, market towns enable local farmers and producers to sell their goods, fostering economic stability and supporting the livelihoods of rural communities. This role of market towns as local trading centres ensures that rural residents have access to a range of goods and services, reducing the need to travel to larger urban centres for necessities (Powe, Hart and Shaw, 2007[34]). In addition to economic functions, market towns often play a social and cultural role within their regions. They serve as gathering points for local populations, offering spaces for community interaction and cultural activities – thereby contributing to fostering social cohesion and helping provide residents a “right to stay” (See section 3.2.1). Market towns can also exhibit distinct architectural and cultural heritage, thereby supporting rural tourism.

Health

Providing high-quality healthcare, medical, and welfare services is essential for maintaining healthy populations, reducing productivity losses, and preventing the need for costly treatments of advanced diseases. Intermediary cities with the health function can play a crucial role in supporting these objectives by providing specialised medical services (e.g. emergency care, laboratory testing, rehabilitation, mental health support, long-term care, and primary care) that cannot be efficiently provided in every settlement. They also complement more advanced medical facilities concentrated in larger urban centres. Through this bridging function, these cities can enhance well-being, support population retention in rural and depopulating areas, and reduce inequalities in healthcare service provision across regions. Strengthening the commercial and service sectors linked to healthcare can also stimulate job creation, helping mitigate workforce shortages. Furthermore, ensuring the inclusivity of digital transformation through investments in digital health skills (e.g. using digital tools, securing patient data, and preparing for future models of care) for both patients and healthcare professionals can enhance the resilience and efficiency of healthcare systems.

These functions are becoming increasingly important in the context of demographic ageing and rising healthcare needs. In many OECD countries, population ageing is expected to exacerbate labour shortages in the healthcare sector. Promoting healthy ageing could help reduce future demand for doctors and nurses. For example, current projections indicate that the EU workforce in these professions would need to expand by 30-33% to meet demand in scenarios where healthy ageing is not prioritised (Bernini, 2024[35]). In addition, one in six people in the EU suffers from mental health issues, imposing an economic burden equivalent to 4% of GDP (European Parliament, 2023[36]). In this context, the health function of intermediary cities can generate wider economic benefits.

Government

Intermediary cities with a government function complement larger administrative centres by hosting regional offices of national ministries and agencies, as well as providing key governmental and judicial services (e.g. government offices, regional courts). In their supporting role, they serve as regional administrative hubs, co‑ordinating public service delivery, infrastructure provision, and fostering inter-municipal co‑operation within functional urban areas (FUAs) and between FUAs and surrounding rural areas. By decentralising administrative functions, they contribute to polycentric development and reduce regional disparities.

The main public administration functions typically found in intermediary cities include judicial and legal administration (e.g. municipal courts, regional courts and tribunals, public prosecutor’s office, administrative tribunal), local law enforcement and security services (e.g. municipal police, national/regional police, fire and emergency services), civil registry and citizen services, deconcentrated and decentralised tax administration and financial services, urban planning and land use regulation offices and various sectoral administrations (e.g. education, healthcare, environment). When inter-municipal co‑operation exists, it is often hosted in one of the core municipalities, co-ordinating services across multiple municipalities and acting as a governance hub. Unlike small towns, intermediary cities have a wider range of public functions, but they do not have the same level of administrative autonomy or complexity as larger metropolitan areas.

Intermediary cities with a government function have a crucial role in enhancing citizen access to administrative services. This can also strengthen institutional trust, with regional and local authorities.7 The proximity to citizens fosters greater participation, enabling residents to voice their needs and concerns, thereby reinforcing democracy. A lack of strong institutional connections between local and national governments can contribute to “geographies of discontent”.8 Ensuring a robust presence of administrative services in intermediary cities can help bridge this gap, fostering a more inclusive and trusted governance structure across all regions.

2.2. Mapping existing definitions of intermediary cities

In addition to the literature review outlined in the previous subsection, the OECD has conducted a survey on intermediary cities to map existing national definitions of intermediary cities or related concepts, as well as policy instruments to unlock the potential of intermediary cities for regional development through their “bridging” role, across the OECD and EU countries (Box 1.1).9 Key findings from the survey are presented below.

2.2.1. Definitions by size: diverse population thresholds

The OECD survey on intermediary cities has revealed that 17 OECD countries out of the 32 respondent countries (15 EU countries out of 19 respondent countries) have set criteria to identify intermediary cities. Among them, 12 OECD countries (9 EU countries) have used population thresholds (Table 2.1).

The identified population thresholds extend from 3 500 (island municipalities in Greece) to 200 000 (Finland) in EU countries, or to 1 million (Colombia) in Non-EU OECD countries. Countries like Belgium, Czechia, Estonia, Greece and Poland consider relatively small settlements (e.g. less than 15 000 inhabitants) as intermediary cities, implying that such smaller settlements are expected to perform “bridging” roles as intermediary cities in their national urban systems. In contrast, Colombia and Korea use relatively large settlements (e.g. above 500 000 inhabitants) as intermediary cities. Overall, data suggests that more populous countries tend to set higher population thresholds, though a more detailed analysis may be needed to confirm this trend.

These findings highlight the need to recognise the varied country-specific contexts regarding urban systems. To gain a better understanding and address the complexities involved, the policy pillar can examine a few country cases to further explore influence of country context on intermediary cities’ roles (e.g. cities with relatively modest populations can play the bridging role of intermediary cities in countries with smaller population size).

Table 2.1. Population thresholds to define intermediary cities, identified by the OECD survey

Country (12)	Population (thousands, 2022)	Indicated population threshold used to define intermediary cities (or related concepts)
EU countries (9)
Belgium	11 641	12 000 - 50 000 inhabitants (in case of Wallonia region)
Czechia	10 760	15 000 - 100 000 inhabitants
Estonia	1 349	Above 5 000 inhabitants in intact clusters of 500m2 grids with population between 200 - 1 000 inhabitants per km2
Finland	5 556	50 000 - 200 000 inhabitants
Greece	10 361	10 000 - 25 000 inhabitants, or above 3 500 in case of Large and Medium Island Municipalities
Ireland	5 100	Above 50 000 inhabitants
Lithuania	2 833	Above 50 000 inhabitants (6 cities), or below 50 000 inhabitants (4 cities)
Poland	37 827	20 000 - 100 000 inhabitants (excluding provincial cities), or 15 000 - 100 000 if the city is a seat of a county
Sweden	10 487	Bigger cities/towns: above 50 000, or above 40 000 in case of the biggest city/town in a municipality) Smaller towns: above 15 000
Non-EU OECD countries (3)
Australia	25 979	Above 10 000 inhabitants
Colombia	51 683	100 000 - 1 000 000 inhabitants
Korea	51 628	Below 500 000 inhabitants (excluding Seoul Special City, metropolitan areas and special self-governing cities)

Source: Author’s own elaboration based on the OECD’s Historical Population Data and the results of the OECD survey on Intermediary Cities.

2.2.2. Definitions by hierarchy

Out of the 17 OECD countries (15 EU countries) that responded to the OECD survey with criteria to identify intermediary cities, 13 OECD countries (11 EU countries) use hierarchies to define cities and settlements in their countries:

• Portugal, as mentioned at National Programme for Spatial Planning Policies (PNPOT), classifies settlements into three spatial typologies10:

  • Urban centres, which structure the organisation of the territory and ensure a diverse range of urban functions;

  • Territorial subsystems, which facilitate local relationships and support territorial equity in the provision of services of general interest; and

  • Polar corridor networks, which promote the development of axes favourable to co‑operation and integration between different territories.

• Romania sorts its settlements into six ranks: a) rank 0 – the capital of Romania; b) rank I – major cities at the national level; c) rank II – important cities at the county level; d) rank III - cities; e) rank IV - villages that represent communes’ seats; f) rank V - villages belonging to communes or cities.

2.2.3. Definitions by function

Out of the 17 OECD countries (15 EU countries) that responded to the OECD survey with criteria to identify intermediary cities, 9 OECD countries (8 EU countries) apply functional criteria to define intermediary cities (or related concepts). Some of them combine such function criteria with population criteria. Examples include:

• Czechia defines intermediary cities as urban centres playing a bridging role between larger cities and rural areas. On top of recognising that these cities typically have populations ranging from 15 000 to 100 000, the country underlines that they serve as regional hubs for services, business, and cultural activities.

• Finland combines a size-based definition of intermediary cities (between 50 000 and 200 000 inhabitants, as mentioned above) with criteria related to their function and administrative role as “regional centres (regional hubs)”.

• Ireland defines intermediary cities (calling them “regional cities”) as “accessible centres of employment and services that can be a focal point for investment and have the widest possible regional influence”.

Other classifications are based on the economic contributions of cities to the territorial system. For instance, in Belgium, the Wallonia Region identifies four types of hubs (anchor hubs, regional hubs, regional capitals, and major hubs). Out of the four types, anchor hubs provide and strengthen services for the area served, consolidating the development of economic activities that are not directly linked to the provision of services. In addition, regional hubs consolidate and develop higher-level services and facilities, as well as complementary economic activities, including those with high added value, strong regional interconnections and many jobs.

While many survey respondents cited legal frameworks outlining the competencies and responsibilities of local governments, no legal framework – or specific provisions – was identified as being explicitly designed to promote the role of “intermediary cities” or similarly defined urban areas. One relevant example is France’s law of 12 July 1999, concerning the reinforcement and simplification of intermunicipal co-operation. This law allows for the creation of agglomeration communities (communautés d’agglomération) for urban centres with at least 50 000 inhabitants. These inter-municipal structures are assigned a set of mandatory competencies, including economic development, spatial planning, housing policy, management of aquatic environments and flood prevention, waste collection and treatment, and water and sanitation services. While not specifically targeted at intermediary cities, such a framework can provide institutional support to them.

2.3. Defining and identifying intermediary cities

2.3.1. Definition

Building on the findings of the literature review and the analysis of existing country definitions based on the OECD survey, this report defines and identifies intermediary cities by adopting a multi-criteria approach combining size, hierarchy, and function criteria (Figure 2.3):

• Geographical coverage: The OECD and EU countries, although the subsequent analysis in the report focuses on cities within the EU-27.

• Unit of analysis: Functional Urban Areas (FUAs) serve as the primary unit of analysis, as they more accurately capture integrated labour markets and enable consistency and comparability across cities and countries. Throughout this report, unless otherwise specified, the term intermediary cities refers to FUAs which meet the criteria outlined in this subsection.

• Size: The initial selection includes small and medium-sized FUAs with population between 50 000 and 250 000 inhabitants. The lower threshold of 50 000 is consistent with the DEGURBA level 1, which sets minimum population size threshold of cities as 50 000. The reference year is 2010, using the most recent available data when 2010 data was unavailable. FUAs with fewer than 50 000 inhabitants are excluded from this experimental definition, although the OECD survey demonstrates that some of them may play the role of intermediary cities in some countries.

• Hierarchy: The largest FUAs in a country and the FUAs hosting a country’s capital are excluded from the selection above as intermediary cities.11

• Function: The eight functions (business, knowledge, transport, housing, culture, retail, health, and government) provide an aspirational definition of intermediary cities. The term “aspirational definition” indicates that these functions are not intended to serve as rigid or prescriptive selection criteria, but rather as a framework to better understand and capture the diverse roles that intermediary cities play, or are expected to play, within national urban systems. This approach reflects the continuing lack of clarity regarding how intermediary cities should be defined, delineated, or assessed in functional terms. Instead of relying on fixed thresholds or checklist-based classification, the framework recognises that intermediary cities occupy a dynamic position between large cities and rural areas. Moreover, the relevance and expression of these functions vary significantly across different geographical contexts (see Chapter 3).

Figure 2.3. Definition of intermediary cities used in this report

Note: The function dimension is used in this report to understand the diverse functions played by intermediary cities, rather than narrowing down the selection of cities.

Source: Authors’ own elaboration.

2.3.2. Intermediary cities at a glance

Applying the definition proposed above, 555 out of 1 213 cities (46%) are identified as intermediary cities within 38 OECD countries. Within 27 EU countries, 365 out of 616 cities (59%) are identified. The share of intermediary cities in the EU countries (59%) is significantly higher than that in non-EU OECD countries (36%). Greece (86%), Latvia (75%), Portugal (75%) and Slovak Republic (75%) are among the countries with the highest share of intermediary cities relative to the total number of cities in the country. Italy has the highest number (59) of intermediary cities among EU countries, followed by Spain (55), Germany (44) and Poland (37) (Table 2.2). Intermediary cities in the EU tend to be relatively small, with more than half having populations below 150 000 inhabitants (Figure 2.4).

For reference, Table 2.2 additionally reports the number of towns and semi-dense areas outside both large and intermediary cities. Towns and semi-dense areas are identified according to DEGURBA, as settlements where less than 50% of the population lives in an urban centre and at least 50% of the population lives in an urban cluster (Lecomte and Dijkstra, 2013[37]). Some of these settlements may play a similar role as intermediary cities, especially in countries such as Denmark, Ireland and Slovenia.

Table 2.2. Number and share of intermediary cities in the EU and OECD countries

Number of cities and intermediary cities by country (based on FUAs), number of towns and semi-dense areas outside cities, and share of intermediary cities (number, population)

Country	Cities total	Large cities	Intermediary cities	Towns and semi-dense areas outside cities	Share of intermediary cities (of cities total)	Share of population in intermediary cites (of total population) 2024 or latest
Austria	6	5	1	80	16.7%	2.9%
Belgium	14	6	8	79	57.1%	11.3%
Czechia	15	4	11	145	73.3%	14.5%
Denmark	4	4	0	63	0.0%	0.0%
Estonia	3	1	2	16	66.7%	15.8%
Finland	7	3	4	49	57.1%	14.7%
France	69	45	24	371	34.8%	6.6%
Germany	98	54	44	779	44.9%	8.7%
Greece	14	2	12	92	85.7%	14.8%
Hungary	19	5	14	110	73.7%	21.7%
Ireland	5	4	1	30	20.0%	1.8%
Italy	83	24	59	816	71.1%	14.7%
Latvia	4	1	3	22	75.0%	15.4%
Lithuania	6	2	4	36	66.7%	15.3%
Luxembourg	1	1	0	0	0.0%	0.0%
Netherlands	35	16	19	82	54.3%	15.6%
Poland	58	21	37	349	63.8%	12.5%
Portugal	12	3	9	91	75.0%	12.6%
Slovak Republic	8	2	6	96	75.0%	15.8%
Slovenia	2	2	0	32	0%	0%
Spain	81	26	55	522	67.9%	15.3%
Sweden	12	4	8	125	66.7%	14.5%
22 EU OECD Total	556	235	321	3 985	57.7%	11.4%
Bulgaria	17	4	13	80	76.5%	19.2%
Croatia	7	2	5	44	71.4%	16.7%
Cyprus	data not available	data not available	data not available	data not available	data not available	data not available
Malta	1	1	0	data not available	0%	0%
Romania	35	9	26	229	74.3%	15.8%
EU-27 Total	616	251	365	4 338	59.3%	11.7%
Australia	18	10	8	data not available	44.4%	5.8%
Canada	26	15	11	data not available	42.3%	5.6%
Chile	26	8	18	data not available	69.2%	15.3%
Colombia	53	21	32	data not available	60.4%	8.8%
Costa Rica	data not available	data not available	data not available	data not available	data not available	data not available
Iceland	1	1	0	data not available	0.0%	0.0%
Israel	10	4	6	data not available	60.0%	14.9%
Japan	61	54	7	data not available	11.5%	1.2%
Korea	22	19	3	data not available	13.6%	1.2%
Mexico	91	60	31	data not available	34.1%	4.9%
New Zealand	14	3	11	data not available	78.6%	23.2%
Norway	4	3	1	data not available	25.0%	5.6%
Switzerland	10	5	5	data not available	50.0%	9.1%
Türkiye	26	20	6	data not available	23.1%	1.7%
United Kingdom	84	43	41	data not available	48.8%	9.8%
United States	211	157	54	data not available	25.6%	3.1%
16 Non-EU OECD Total	657	423	234	-	35.6%	4.3%
OECD-38 Total	1213	658	555	-	45.8%	6.5%

Note: Intermediary cities are defined as FUAs that have a population size in 2010 between 50 000 and 250 000 inhabitants and are neither capitals nor the largest city in a country. Costa Rica’s FUAs are yet to be defined. For Cyprus, population data to calculate their FUAs is not available. Computations are based on population data from National Statistical Offices for all countries except for Greece, where we use data from the Global Human Settlement Layer. Towns are reported only for EU-27 countries, based on DEGURBA classification of municipalities. Population shares are computed using the latest available population data for each country. Population shares for groups of countries (EU-27, OECD, etc.) are based on the combination of the latest available data for each country.

Source: OECD Regions, Cities and Local Areas database http://oe.cd/geostats and Global Human Settlement Layer.

Figure 2.4. Over half of EU intermediary cities have a population below 150k inhabitants

Distribution of intermediary city size in the EU-27, 2010

Note: Histogram displays number of ICs by city size population (in 2010, EU-27 cities only).

Source: OECD Regions, Cities and Local Areas database http://oe.cd/geostats.

Intermediary cities are home to a sizeable share of the urban population and constitute an integral part of life for the population outside cites. Intermediary cities collectively account for 9% of the OECD’s urban population and 19% of the EU's urban population. In Slovak Republic, intermediary cities host the highest share of the national urban population among EU countries at 44%, followed by Romania (39%) and Hungary (34%) (Figure 2.5). The role of intermediary cities role extends beyond their boundaries, as residents of surrounding municipalities may access services or education located in intermediary cities. To approximate the population living in close proximity to intermediary cities, a 10 km buffer is applied to identify municipalities whose boundaries fall within 10 km of an intermediary city. Based on this simple measure, half of EU residents living outside of larger cities reside in or close to an intermediary city. In the OECD, this share is 38% (Table 2.3).

Figure 2.5. Almost a fifth of the EU’s urban population lives in intermediary cities

Share of urban population living in an intermediary city in the EU (%), 2024 or latest

Note: Urban population refers to the population living in intermediary and larger cities.

Source: OECD Regions, Cities and Local Areas database http://oe.cd/geostats.

Table 2.3. Half of EU residents living outside larger cities live in or close to an intermediary city

Share of population within or near an intermediary city, 2025 or latest

Indicator	OECD	EU
A. Population within an IC, out of total population	7%	12%
B. Population near an IC, out of total population	8%	12%
C. Population outside larger cities, out of total population	37%	49%
Population within or near an IC, out of population outside of larger cities (= (A + B) / C)	38%	49%

Note: All indicators except the last one are expressed as shares of the total population. The last indicator is expressed as a share of the population living outside larger cities. Calculations are based on 2025 data or the latest year available. Coverage includes 25 of 27 EU countries (excluding Cyprus and Malta) and 37 of 38 OECD countries (excluding Costa Rica). Within each country, municipalities located outside larger cities are identified, where larger cities refer to FUAs that are not intermediary cities. The population living in municipalities that either belong to an intermediary city or are located within 10 km (Euclidean distance, measured border-to-border) of an intermediary city is then summed and divided by the total population living outside larger cities. The resulting indicator measures the share of residents outside larger cities who live in or near an intermediary city.

Source: OECD Regions, Cities and Local Areas database http://oe.cd/geostats.

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Notes

Notes

← 1.  The EU-OECD definition of FUAs (Dijkstra, 2019[38]) capture meaningful connections between cities and their surrounding areas, by expanding city boundaries to include areas economically connected through workplace commuting. As therefore consist of a densely inhabited city and a less densely populated commuting zone whose labour market is highly integrated with the city (Eurostat, Methodological manual on territorial typologies, online publication, 2024 update; and based on OECD, 2012). The EU-OECD definition of FUA is linked to the “degree of urbanisation” (DEGURBA). Both use the identical city definition, but the degree of urbanisation classifies the remaining local units into towns & suburbs, and rural areas (Dijkstra, 2019[38]) (Eurostat, 2024[39]) (OECD, 2012[40]). DEGURBA identifies three types of settlements based on a combination of geographical contiguity and population density: 1) cities, which have a population of at least 50 000 inhabitants in contiguous dense grid cell (>1 500 inhabitants per km²), 2) towns and semi-dense areas, where less than 50% of the population lives in an urban centre and at least 50% of the population lives in an urban cluster, and 3) rural areas as those with population under 5 000 inhabitants, where more than 50% of the population lives in rural grid cells (Lecomte and Dijkstra, 2013[37]). These settlements serve primarily localised functions, providing essential services for their immediate surroundings. They often rely on a narrow economic base, frequently centred on small-scale retail, agriculture, or locally focused services. Residents of these areas often travel to nearby larger cities for specialised services, higher education, and employment opportunities that are not available locally (OECD, 2020[41]; ESPON, 2014[42]).

← 2.  Although mainly defined by size, intermediate cities are often discussed from the function point of view. For instance, intermediate cities are expected to function as industrial and advanced service hubs for their countries (Fritsch and Wyrwich, 2021[44]), by providing essential markets for rural products, and by offering transit hubs for larger metropolitan areas (Satterthwaite and Tacoli, 2003[43]). Moreover, intermediate cities hold considerable advantages, in particular, for poverty reduction and as more efficient ecosystems in which to live and work (Rodríguez‐Pose and Griffiths, 2021[8]).

← 3.  For instance, the Cuenca Declaration on Intermediate Cities underlines their function as intermediaries within territorial systems, facilitating interactions between larger cities, towns, and other human settlements while strengthening urban-rural linkages (United Nations, 2015[45]).

← 4.  For instance, the Cuenca Declaration on Intermediate Cities mentions their key role of service provision related to education, housing, culture, health and government (United Nations, 2015[45]).

← 5.  At the same time, they also provide housing for residents who both live and work locally.

← 6.  While definitions vary across countries, cultural and creative sectors typically include: Advertising; Architecture; Artistic crafts; Books and press; Audiovisual and multimedia (including computer games publishing, film and cinema, television, radio and parts of music); Cultural education; Heritage (including libraries, museums, historic sites, natural and intangible heritage); Performing arts (including theatre, danse, music, festivals), Visual arts (including design, photography and visual arts). For a full review of definitions see (OECD, 2022[48]).

← 7.  In the EU, regional and local authorities enjoy the trust of 53% of residents, compared to only 32% who trust national governments (European Union, 2023[46]).

← 8.  For example, Eurosceptic parties receive 34% of votes in less developed and transition regions, compared to just 22% in more developed regions (Rodríguez-Pose, 2023[47]).

← 9.  This report presents the results of the definition part of the survey, while the results of the policy part of the survey will feed into the other outputs of this project (i.e. case studies and a toolkit).

← 10.  Based on the response from Portugal to the OECD Survey on Intermediary Cities. National Programme for Spatial Planning Policies (PNPOT): https://pnpot.dgterritorio.gov.pt/pcat/ficheiros/V01_Ingl_DRE_EstratPNPOT_2020.pdf

← 11.  No FUAs in the EU fall into this category. In OECD countries, this criterion applies to Reykjavik (Iceland). It is the only first-tier city in the sample with a population under 250 000 inhabitants.