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Territorial competitiveness

Creating a territorial development strategy
in light of the LEADER experience
[Part 1]

[ Index ]


Chapter 1
The territorial approach in rural areas -
lessons learned from LEADER


1.2 The territorial approach: emergence and development


The emergence of the territorial approach was fostered by changing consumer expectations and markets, the introduction of new communication technologies and gradual changes in institutions.

  • Urbanisation provided rural players with the opportunity to satisfy the need of city-dwellers to escape to the countryside by supplying quality provision in terms of accommodation, leisure and cultural activities, etc. This led to the development of multiple forms of rural tourism.

  • Consumer demand for “regional” or “local” produce also represents an economic opportunity for less productive agricultural areas: it encourages local producers to process quality products on a small scale on site and to regain a level of competitiveness by highlighting the distinctive qualities of their own products.

  • New communication technologies are helping to make rural areas seem less remote by facilitating access to information, and thereby creating the prerequisites for setting up new businesses.

  • Local, regional, national and European institutions are becoming increasingly aware of territorial development approaches, even though the problems of distributing powers among the various decision-making levels are far from resolved.

These changes will no doubt intensify still further. According to a number of sources, demand for quality products, which currently represents around 10% of the food product market, is set to rise substantially. In Denmark for example, it is estimated that, between now and the year 2010, quality products in all categories will account for nearly 30% of the agri-food market.

Combined with economic globalisation, these changes will prompt rural areas - especially those where agriculture is no longer the main activity - to increase their competitiveness by capitalising on their distinctive assets in terms of natural resources, heritage, knowledge and know-how.

Moreover, in parallel with the likely increase in competition between areas, it is also likely that there will be greater emphasis on networking and collaboration. This has already been heralded by the increased cooperation between LEADER groups and the emergence of regional, national and transnational networks.


“Paralelo 40” is a network created in 1996 by nine LEADER groups (five Spanish and four Portuguese) operating on or close to the 40th parallel, with the aim of jointly promoting their tourism resources.

A joint Internet site has been set up to promote their craft and tourist products. The network included 147 business firms in 1999 and a further 667 were planning to join. This instrument should enable these remote firms to improve their market competitiveness.

The territorial approach will doubtless become ever more complex: in addition to economic globalisation, information is tending to become global, completely overturning notions of space and distance. It has led to the formation of a multitude of virtual, thematic areas, for which some types of link with physical areas and real living environments will need to be found.

In other words, the links between each rural area and the outside world will be considerably enhanced. However, although there are ever greater possibilities for accessing new markets (it is, for example, relatively easy for rural producers to market their products on the Internet as it can be accessed from anywhere on the planet), the distance factor will provide less and less protection against competition.

What attitude should rural areas adopt in this context? How should they respond to such changes, to the relocation of activities, the emergence of networks, etc? How can rural areas cope with the ever faster breakdown of traditional forms of organisation due to market globalisation, and how can they offset the decline in activities that do not form part of this dynamic? How can such areas, which are already facing restructuring or even depopulation, rediscover their own dynamic in a global context that itself is undergoing far- reaching change? In short, how can they regain their competitiveness as areas?

The crux of the issue is, more than ever, to:

  • “understand what is happening by gaining a deeper knowledge of territorial approaches that offer the key to grasping contextual changes, globalisation, networks, the new area ‘geography’, etc;

  • turn the area (hitherto the result of unconscious development) into a project to pool knowledge and languages and create a sense of identity, enabling the men and women living in the area to discover the reasons and advantages of their physical environment and to actively develop their collective intelligence” (according to E. Rullani, “Trasformazioni produttive e trasformazione delle istituzioni”, in Sviluppo locale, vol. V, no. 8, 1998).

As the territorial approach spreads and becomes the subject of a growing consensus, the concept takes a broader and more open form. It no longer corresponds to the strictly endogenous development approach that it was saddled with in the early 1990s. Relations with the outside world are playing an increasing role, and partnership of “variable geometry” networks and links with a multitude of virtual areas are becoming essential elements of territorial development strategies.

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