News -
Urban and capital areas continue economic and employment dominance
Urban and capital areas have disproportionately benefitted from the digital revolution in Europe, with a high rate of knowledge and service-based jobs. By comparison, many rural areas risk being left behind, with unbalanced urban economic dominance further deepening urban-rural divides.
EU research show that of the 10 EU regions with the highest employment rates in 2022, 6 were capital regions, and 9 of these were in Nordic or Benelux countries. Moreover, these regions experienced the strongest employment growth between 2019 and 2022, notably in high-paid jobs. In capital regions, 1 in 4 workers are employed in knowledge-intensive services in the private sector, compared with just 1 in 10 in mainly rural regions.
Eurofound and the European Commission Joint Research Centre have published a new report on Regional employment change and the geography of telework in Europe looking in detail at the regional aspects of employment and economic resilience following the COVID-19 pandemic.
Almost 90% of regions across the EU had exceeded their pre-pandemic employment levels by 2022; however, significant regional disparities remain. EU regions fared differently, depending on their economic specialisation and notably on the concentration of jobs in knowledge-intensive services that can be performed remotely.
As employment and economic activity increases in urban areas, sparsely populated areas continue to face long-term economic decline and depopulation. This is despite rural areas generally having more affordable and spacious housing, less pollution and more natural amenities.
The report highlights that factors attracting employers, workers and infrastructure investment to cities – including economic dynamism, with deep labour markets, abundant business opportunities and good access to amenities and public services – are self-reinforcing and remain relatively constant over the short term.
It notes, however, that long-term regional industrial and innovation policies have the potential to change demographic and economic disparities between rural and urban areas by enabling regions to leverage their unique features and by deepening the understanding of place-specific opportunities.
While the future of rural areas in Europe relies on more than communications infrastructure, fast internet connectivity is the essential enabling technology for telework. Efforts to achieve policy targets on internet connectivity in both urban and rural areas have taken on a new urgency and impetus since the COVID-19 pandemic.
It is noteworthy that by 2022, rural areas on average were enjoying faster internet speeds than cities had done only three years previously. However, internet speeds in cities have improved even faster, further widening the urban–rural gap. Increased action is required on closing this urban-rural gap, as foreseen in the EU Digital Decade policy programme 2030.
