Regions in industrial transition are generally former economic powerhouses; today they often face lower GDP per capita and higher unemployment than their country average, as well as low GDP growth. Urgent action is needed, as these regional inequalities are often growing within countries, especially in terms of economic output and income which frequently pair with social pressures and lower well-being outcomes. Long-term economic decline, poor labour market outcomes, and unequal access to quality public services – common characteristics of regions in industrial transition – contribute to territorial differences in trust in government. Low levels of institutional trust can affect policy acceptance by residents and risk weakening regional and local democratic outcomes.
Industrial transitions in regions
How do regions succeed in their transition processes? Components of successful transition include embracing experimentation, flexibility and adaptability in governance and policy making, designing balanced policy interventions across sectors, advancing in the green and digital transitions, and applying a broad definition of innovation to programming. Our work focuses on how regional policy makers can reinforce these elements to foster industrial diversification, growth, and well-being for a successful industrial transition in their region.
Key messages
Policy makers aiming for a successful industrial transition should prioritise interventions that not only advance innovation, but also support other key dimensions, such as job and skills development, SMEs and entrepreneurship, the transition to carbon neutrality, smart specialisation, and the transition to a carbon-neutral economy. This multi-sector approach ensures that the regional economy evolves towards more resilient, competitive, and sustainable models, leveraging place-based strengths while addressing pressing environmental challenges and societal needs. It also allows regions to diversify their economic base, reducing reliance on declining sectors.
Facilitating industrial transition not only requires adjusting policy frameworks to accommodate new economic and industrial models. It also benefits from a balanced and realistic approach to growth, supported by more flexible, agile and collaborative governance practices. Experimenting, co-designing and actively engaging relevant stakeholders – the private sector, academia, civil society, and citizens – can help policy makers generate new ideas, test innovative approaches, and build a strong and sustainable base to advance their transition process.
Context
Synergies between the green and the industrial transition
The share of green-task jobs differs significantly across regions, with on average 7 percentage points difference between the top and bottom regions. Capturing synergies between the green and the industrial transition could help close the gap in green-task jobs within countries.
