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Findings from European research: securing a strong and sustainable economic future for Small and Medium Sized Towns

09 September 2014

As mentioned in an earlier blog post, the Royal Town Planning Institute (RTPI), working in collaboration with European research partners, has been investigating resilience in small and medium sized towns (SMSTs) during the recent economic downturn.

Research delivered by ESPON (the European Observation Network for Territorial Development and Cohesion), shows that many European regions haven’t fully recovered from the economic downturn, and how regional economic resilience has varied widely during the crisis in geographical terms. In this research, ‘resilience’ is understood as the ability to resist or to recover from economic shocks. It is a place-based capacity shaped both by areas’ inherited resources and structures, as well as their people, businesses and institutions. The diagram below, analysed at NUTS 3 level (upper tier and unitary authorities and districts in the United Kingdom), shows the 2014 economic position of European Union regions. Measured in terms of employment rate; red regions are those that suffered declining employment rates during the crisis and have yet to recover; yellow regions suffered a decline in employment rate, have started to recover, but have not yet returned to pre-crisis levels; green areas suffered a decline but have since returned to pre-crisis levels or better; whilst blue areas were successfully resilient to any drops in the employment rate at all.

 resilience map

The RTPI is organising a free seminar on Wednesday 17th September in Colwyn Bay in Wales focusing on how can planners and policy makers help SMSTs secure a strong and sustainable economic future. Indeed, the vast majority of current research on successful places is focused on cities, however half the UK's population still lives outside the main urban conurbations. The event will provide an opportunity to interact with experts in planning, economic development, and regeneration about the challenges facing SMSTs across the UK. For further details about the event and the book a place click here.

In addition the RTPI has prepared two briefings aimed at practitioners and policy makers. The first briefing, 'Economic resilience in small and medium sized towns', looks at the varying levels of economic resilience in European regions after the financial crisis. The briefing shows that the key factors for local economic resilience and development are history of long-term stable growth, diverse local economies (including high-tech or knowledge intensive industries, and high shares of employment in service industries), local business innovation and skills, the accessibility of areas, capital investment, and the availability of reliable high-speed broadband. Regions that are closer to urban centres also tend to be more resilient.

This suggests towns will have to do more to understand and invest in their own capabilities and assets in order to strengthen their economic resilience for future shocks. This could include increasing the ability of local economies and institutions to adapt to change, for example through support for business innovation, workforce development, local networks and social capital. Strong, more autonomous local government can be critical, although the way in which fiscal autonomy is used may be more significant than simply the presence of powers. Wider regional visions and collaborations between towns on shared projects or services can also be important. Two SMSTs case studies from Wales are illustrating findings from the research.

The second briefing, ‘Hidden potential of small and medium sized towns’, is part of a series of European briefings that look at the characteristics of SMSTs and their development potential in different European regions. It focuses on the ESPON Western Europe region - UK, Ireland, Luxembourg and Belgium where SMSTs are still the prevailing population settlement type in several regions. The briefing focuses on the characteristics which make towns different from cities, for instance the fact that the industry sector has a greater proportion of employment. However, despite some common characteristics, SMSTs show a diverse range of economic profiles. As towns get larger, their employment profiles tend to become more diverse relative to economic sectors. Given the great diversity among SMSTs in Western Europe, place-based approaches to individual SMSTs always require a detailed analysis of the specific place before developing a bundle of policy interventions.

The RTPI is doing research on how planning can promote and support sustainable economic growth, development and regeneration over the long-term. This includes a policy paper on Fostering Growth, published in June 2014, and a research paper on Creating Economically Successful Places to be published in November 2014 as part of the Planning Horizons series. In addition the Value of Planning strand of work looks at the relationship between planning and economic growth.