IMPORTANT LEGAL NOTICE: The information on this site is subject to a disclaimer and a copyright notice.

Territorial competitiveness

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

[ Index ]


Chapter 2
Territorial capital and territorial project


The LEADER experience has shown that it is not possible to conceive a territorial project as either an administrative entity stemming from an “anonymous” division of the national territory, or as a set of geographically grouped economic activities, but as a multi-faceted living entity (with economic, social, institutional, cultural and other facets) that evolves over time. This is because each territorial project is the product of a relationship between the past, present and future. Far from being inevitably conditioned by its past, the territorial project is nurtured by examining the past, comparing the present situation with what is happening elsewhere, analysing successes and failures, and planning the future on the basis of a shared analysis and the willingness of the players involved.


2.1 Developing a territorial project by evaluating the “territorial capital”


How can a territorial project be shaped, defined and consolidated over the long term? How much room for manoeuvre is there? How is it possible to extract from the area’s inherent complexity the opportunities for action and for initiating a process that will inject new dynamism into or consolidate activities, institutions, or the organisational procedures of the players involved? In other words, how is it possible to move from analysing the situation to actually developing a territorial project (or vision of the future) that is designed by the players themselves and not dictated by external developments that are to a greater or lesser extent uncontrolled? How is it possible to pinpoint the key elements on which to focus efforts? An analysis of the “territorial capital” can help to answer these questions.

The “territorial capital” represents all of the elements available to the area, both tangible and intangible, which in some respects constitute assets and in others constraints.

The concept of “territorial capital” is not static but dynamic. It corresponds to the analytical description of how those seeking the room to take action see the area. It is therefore related to the territorial project concept and to the bid for territorial competitiveness. Each area endeavours to find its place by focusing on access to markets, its image, its potential to attract people and businesses, its ability to renew its governance, etc.

The territorial capital refers to the things that constitute an area’s assets (activities, landscape, heritage, know-how, etc), and are not part of an accounting inventory exercise, but are intended to identify the distinctive features of an area whose value can be enhanced. In some areas, for example, this may involve the ad-hoc restoration of elements that are falling into ruin and whose disappearance would result in even greater anonymity for the area.


In the Sousa valley of north-east Portugal, more often than not women have no source of income other than poorly-paid, small-scale handicraft activities, such as embroidery. The LEADER group, which made reviving this activity one of the linchpins of its territorial project, has engaged in a lengthy process of professionalising the embroidery sector, a process which has now been taken over by the association Casa do Risco (“fabric design” centre). It has worked on reintroducing traditional techniques, modernising patterns and computerising processes, and has organised training and promotional campaigns in high-quality markets. Beyond that, the very dignity of some 600 women is at stake. Their average pay increased by 33% between 1996 and 1999 but most importantly, the women have secured technical support and now feel they have gained professional recognition.

Territorial capital cannot therefore be evaluated purely in terms of the area’s history. The past sheds light on the present, just as the present makes it possible to pinpoint elements of the past on which it might be possible to base a strategy. There is therefore an ongoing back and forth exercise between analysing today’s capital and examining the past.

Similarly, the area’s capital depends on how people see their future: what direction should it take? What strategic form can be made of the area’s distinctive features? This gradual process of evaluation through successive experiments makes it possible to refine judgement. After ten years of LEADER, many areas have been able to progress beyond the initial stages of support for scattered projects and to gradually concentrate their support on a number of strategic areas, or unifying themes, built around specific elements and carefully integrating available resources.

Territorial projects encompass both an imaginary element and a bet on the future. In many cases a project may at first seem utopian but go on to serve as a catalyst for the future. In other cases, the point of departure for the project is the concrete situation and constraints, which may appear more realistic at the outset but is doubtless more limited. Neither of the two approaches has greater merit than the other. Both are useful and complement each other to create a territorial project that is both ambitious and realistic.


In the Maestrazgo de Teruel area (Aragon, Spain), for example, demographic weakness and the emigration of young people may have implied that the area had no future. The LEADER group therefore put together an ambitious project, built around the idea of a “cultural park-area” and the use of advanced communication technologies, whilst at the same time implementing support measures for new project promoters and for businesses still in existence.

This dual approach allows the area’s capital to be viewed with new eyes, and elements to be discovered within the area that had been forgotten or neglected, or that had formerly seemed unimportant but could suddenly become essential to the hoped-for project.

Another decisive factor in the area’s capital is the relationship between the area and the outside world. A wide range of opportunities can be identified from marketing intelligence, from the area’s exiles, from demand from nearby city-dwellers or from planned outside investment, which will also lead to a new look being cast on the area and the identification of further potential resources with promise for the future.

The territorial capital can therefore be represented by a sphere situated at the intersection of two axes (a horizontal past/future axis and a vertical internal/ external axis) which evolves, is enhanced and becomes more sharply defined using elements drawn from both the past (history) and the future (the project), from what is internal to the area and from its relations with the outside world.

As a result, many areas have discovered that statistical, sectoral information is not enough to describe their real situation. Developing a territorial project prompted them to identify relationships of interdependence between the multiple components comprising the area’s capital and to turn these relationships of interdependence into the linchpin of their strategy.


In Emilia-Romagna (Italy), the parmesan-cheese production area can be described in terms of production volume, number of jobs, number of businesses, how they are collectively organised, etc. This basis for interpretation would lead to the conclusion that this is an area with a strong and promising territorial capital. However, by adopting an integrated territorial development approach, the Apennino Parmense and Piacentino LEADER group also discovered “losses” or loss of earnings due to the poor concentration of the parmesan cheese business, notably, the inadequate development of tourism, in spite of undeniable natural and cultural assets, difficulties in transferring the know-how and knowledge amassed by the parmesan sector to other sectors or parts of the area, etc. This is why LEADER’s strategy has endeavoured, through coordination and support for emerging projects, to integrate other resources more effectively into a development dynamic. The local action group therefore looked for alternative core structuring principles that would foster new ideas.

By integrating data it is possible to gain a better understanding of what are the obstacles and the room for manoeuvre, to ascertain the feasibility of the territorial project, to decide on what strategy to adopt, and to better evaluate how to create added value through a territorial approach. Should an area’s potential strengths be “enhanced”, even if this means aggravating internal imbalances or, on the contrary, should action be taken to address its weak points by reducing gaps? Should the emphasis be placed on a particular unifying theme or field, or should measures instead be diversified? This relationship between the area’s project and its capital has led a great number of rural areas to:

  • re-evaluate neglected resources and transform them into strategic development lines;

  • highlight the area’s distinctive features or create new ones by combining different sectors;

  • encourage the discovery of little-known or neglected local resources by giving renewed value to aspects that were formerly perceived as negative.

In most rural areas today, judgement of the area’s capital differs markedly from that made only a few years ago. Elements that were formerly little known, neglected or perceived as negative are now often given a key role; it is not unusual for a former handicap to be seen as an asset today, and vice versa.

European Flag