Unpacking Place Transformation

• September 18, 2026
• admin

The paper Unpacking Place Transformation by the OECD examines how communities can respond to economic decline, structural change and emerging challenges by reshaping their local economies, institutions and identities. It highlights persistent geographical disparities in employment, skills and economic opportunities across OECD countries, noting that traditional policies often fail because of poor targeting, weak implementation and inadequate attention to underlying structural barriers. The paper argues that economic recovery does not necessarily translate into improved well-being for all residents, making social inclusion and community prosperity central to the transformation process.

The OECD identifies several factors that influence a place’s ability to transform, including innovation capacity, economic diversification, human capital, institutional quality and connectivity. It also emphasises the importance of ‘soft infrastructure’, such as local leadership, social capital, community engagement and place identity, which supports collaboration, innovation and adaptation. Transformation can follow different pathways, including upgrading existing industries, developing new sectors, attracting external businesses and diversifying into related or unrelated activities. Examples such as the Basque Country and Pittsburgh demonstrate how investment in human capital, knowledge ecosystems and cross-sector collaboration can support economic renewal.

The paper proposes a holistic policy framework that combines local economic development with employment and skills, social inclusion, infrastructure and culture. It stresses the importance of collaboration between national, regional and local governments, businesses, educational institutions and community organisations, alongside long-term planning, anticipatory approaches and interventions tailored to the appropriate geographical scale. Looking ahead, the OECD calls for further research into how skills development, leadership, social capital and place identity influence transformation, how past lessons can inform responses to artificial intelligence, demographic change and the low-carbon transition, and how policies can ensure that the benefits of economic renewal are shared more widely.