The share of population with at least basic digital skills is lower in rural areas than in cities and this gap has not changed since 2015, which may hinder the use of online services and the capacity for teleworking.

The growing share of working age women with a tertiary education in rural areas may reduce the gender employment gap over time. However, if some of the young women in rural areas with a tertiary education cannot find quality jobs and do not have access to social services including early childhood education and care facilities in rural areas, they will move elsewhere to find a job which fits their qualifications. Remote working possibilities might represent new opportunities also to women, accessing more easily high quality jobs while living in rural areas.

The educational divide between cities and rural areas is large and has grown over time. Although the share of population aged 25-64 with a tertiary education has increased in rural areas, it increased more in cities where the share is almost double (41% in cities vs 22% rural areas). The educational divide depends not only on access to tertiary education, but also to jobs that demand these types of qualifications. If more specialised jobs become available in rural areas, for example through teleworking, this divide may shrink. If specialised jobs remain or become more concentrated in (large) cities, the divide may well grow over time. Moreover, the percentage of young people without a job, not in education or training is higher in rural areas than elsewhere.

At EU level, the rural employment rate was the same as in cities, albeit with clear differences at Member State level, while the rural unemployment rate was even lower than in cities in 2019. The reduction of active age population impacts also the employment rates, with some areas, also rural ones, facing more lack of workforce than unemployment problems. At the same time, the gap between male and female employment rates is larger in rural areas than in cities in the EU, has barely changed since 2012 and is very high in some Member States.

As with tertiary education, the gap between rural areas and cities is wide and present in virtually all Member States. In the EU, the share of rural residents that have at least basic digital skills is 14 pp lower than of city residents (48% vs 62%) in 2019. This gap has furthermore not changed since 2015. The lower level of digital skills in rural areas may limit the uptake of e-services and the potential to work remotely. This also depends on the availability and affordability of high-speed infrastructure.

About half of the EU rural population has at least basic digital skills. There is a big variation between Member States. The highest rate – recorded in the Netherlands – is more than four times bigger than the lowest rate recorded in Bulgaria.

Of the women aged 25-34 in rural areas, 35% have a tertiary education compared to 22% for men that age in 2019. In cities, women of that age group are also more likely to have a tertiary education compared to men of that age, but the difference is smaller: 55% vs 45%, a gap of 10 pp vs 13 pp.

Since the increase was even higher in cities, the gap between rural areas and cities increased from 17 pp in 2012 to 19 pp in 2019. Also at the Member State level, most experience a stable or a growing gap in terms of tertiary education between rural areas and cities.

The share of population aged 25-64 in rural areas with a tertiary education has increased over time from 18% in 2012 to 22% in 2019. The same pattern can be observed in all Member States, with all rural areas showing increase in the share of tertiary educated. The size of the increase however varied with big increases in Austria, Malta and Lithuania compared to very small increases in rural areas in Germany, Bulgaria and Romania. Despite these increases, however, the share of the tertiary educated is still significantly lower than in cities (where the share is 41%).

The share of young people aged 15-29 years neither in employment nor in education or training (NEET) was highest in rural areas (13.6%) and lowest in cities in 2019 (11.7%). In 18 Member States the lowest rate was registered in cities; these figures may reflect, to some degree, the concentration of educational establishments and job opportunities in cities.

At the EU level, the early leaving rate was higher in rural areas (10.7%) and towns (11.2%) than in cities (9.1%) in 2019. The gap is significant in Romania (where it reaches 18.1 pp), Bulgaria, Hungary and Latvia. In a few Member States the gap is negative, for instance, in Austria (-7.3 pp) and Belgium, which means that more young people in these Member States leave education prematurely in cities than in rural areas.

In 2019, 10.7% of young people (aged 18-24) in EU rural areas were early leavers from education and training, in other words, they had completed at most a lower secondary education and were not in further education or training during the four weeks preceding the survey. Among the EU Member States, the proportion of early leavers in rural areas in 2019 ranged from 4.4% in Austria to 24.5% in Bulgaria. Since 2012 the rate has decreased in almost all Member States, with the largest decreases in Greece, Spain, Portugal and Romania.

Note: 40 score points in PISA test is equivalent to about one year of schooling. Data for ES not available. Countries are marked by * when the urban-rural gap is statistically significant.

The OECD Programme for International Student Assessment (PISA) 2018 shows that the reading performance of 15-year-olds students attending schools in rural areas is significantly lower than in cities. The gap is rather large in many Member States. In Hungary, Bulgaria, Romania, Slovakia and Portugal it even exceeds 100 PISA score points, corresponding to approximately 2-3 years of schooling.

-Early leavers and young people neither in employment nor in education or training are more in rural areas than in cities

Despite overall increases in employment rates, this difference between the gender employment gap in cities and rural areas has not changed since 2012.

In 2019, the employment rate of city residents (for people aged 20-64) was 68% for women and 78% for men which translates to a gender employment gap of 10 pp. The gender employment gap in cities was smaller than in rural areas because women are more likely to work in cities than in rural areas, while the opposite holds for men. Most Member States have a wider gender employment gap in rural areas than cities.

The EU rural employment rate (for people aged 20-64) was 67% for women and 80% for men in 2019, which translates to a gender employment gap of 13 percentage points (pp). The gap was above 20 pp in Malta, Romania, Greece and Italy. The smallest gap was registered in Baltic and northern Member States. Since 2012, this gap has remained fairly stable at the EU level, but the trend at the Member State level varies with significant increases in the gap in Bulgaria, Hungary and Romania. By contrast, the gap shrunk especially in Belgium, Luxembourg, Malta, Slovakia and Germany.

These favourable overall dynamics mask different realities, notably a very diverse situation in the Member States and the situation of young people, who have a higher unemployment rate compared to the general working age population, also in rural areas. Unemployment for young people (15-24) in rural areas was 13.4% for 2019, while the EU-27 rural unemployment rate (15-74) was 5.7%.

At the EU level, the unemployment rate (15-74) was lower in rural areas than in cities in 2019. Eleven Member States showed a moderate to high rural advantage in comparison to cities in terms of unemployment rates, while only 6 Member States showed a moderate to high rural disadvantage. This rural advantage has increased slightly since 2012. This aggregate picture, however, hides changes in both directions. For example, Romania switched from a rural advantage in 2012 to a rural disadvantage in 2019.

At EU level, there was no difference in the employment rates (20–64) in rural areas and cities in 2019 (both 73%). This is a result of very diverse situations in the Member States. The biggest rural advantage was registered in Belgium, followed by Austria; while the largest rural disadvantage was registered in Bulgaria, followed by Lithuania. This situation has been relatively stable at the EU level since 2012, but in some Member States, rural areas improved relative to cities while in others they deteriorated (in particular in Romania and Croatia).

Since 2012, the employment rate for the population aged 20-64 in rural areas increased in all Member States. At the EU level, it increased from 68% to 73% in 2019. At the same time, the unemployment rate in rural areas dropped in all Member States. At the EU level, it dropped from 10.4% to 5.7%.

This section describes the situation of rural regions with regard to employment, unemployment, education and training, including a comparison with urban areas and analysis of gender.

Rural regions will have to develop policies that manage population changes and ensure that they do not affect their quality of life or hurt their economy and social systems. Innovative technological and organisational solutions in terms of digitalisation or green mobility may help regions to manage demographic changes, while contributing to perspectives for people to stay in rural areas or discover them as attractive living spaces, to minimise disruptions to their economy and to maintain a high quality of life or improve it.

The EU population is expected to continue to age and to start shrinking during the next decade. Rural regions today already have an older population than the other regions do and are more likely to have a shrinking population, due to (higher) negative natural change in population and a less positive net migration rate. Remote rural regions face a particularly difficult situation. In many ways, rural regions are ahead of the demographic curve at the EU level because over the next decades more and more other regions will also experience ageing and population decreases.

The consequences of these EU level changes can be seen in all three types of regions with a steady increase over time of the share of people living in a shrinking region. Up to 2060, rural regions maintain the highest share of population in regions with a shrinking population and in depopulating regions.

The EU population is projected to shrink from 2026 onwards. As a result the share of the EU population living in a region that lost population in the five preceding years will increase from around 40% in 2020 to 75% in 2060. ( Figure 16).

These different demographic trends will lead to a lower rural population share in 2060 (-2 pp), lower intermediate population share (-1 pp) and higher urban population share (+3 pp) ( Table 9 ). These small changes in the urban and rural population shares over a period forty years show the continuation of a slow process of urbanisation in the EU.

The most recent Eurostat population projections ( Table 8 ) indicate that the EU population is roughly stable and is likely to start shrinking from 2025 onwards. This general trend will in turn affect rural, intermediate and urban regions. Rural regions were already losing population during the last two decades and are projected to continue to do so for at least the next forty years. The population in intermediate regions is still growing, but it is projected to start shrinking from 2025 onwards. The population of urban regions is last to start shrinking, with reductions occurring from 2045 onwards. Remote intermediate and rural regions are shrinking faster than regions close to a city and these differences are projected to continue.

Of the population in rural regions, 17% lives in regions with a growing working age population, compared to 56% in urban regions and 32% in intermediate regions. The growth of working age population is primarily due to the positive effect of migration; a positive impact of the age structure is quite rare.

In urban, intermediate and rural regions, a reduction of the working age population is mostly due to the negative impact of the age structure and much less due a negative effect of migration. Remoteness again comes into the picture as in the remote regions with a shrinking working age population, more people live in a region with a negative effect of both migration and the age structure compared to the non-remote regions. A bigger share of the rural population lives in a region where the working age population shrinks due to the negative impact of both the age structure and migration (20%) as compared to intermediate (12%) and urban regions (10%).

The working age population has been shrinking at the EU level for a decade. As a result, the majority (61%) of the EU population lives in a region that experienced a reduction in its working age population between 2015 and 2019 ( Table 7 ). The rural population, however, is almost twice as likely to live in a region with shrinking working age population as the urban population (83% vs 44%).

Note: Local depopulation is defined as average annual percentage difference between 2018 and 2011 lower than -1%. The Degree of Urbanisation and remoteness are defined according to the 2011 classification. The 2020 data is estimated on the basis of demographic projections at high spatial resolution starting from the Census data of 2011.

The type of population change has an impact on several key demographic indicators. For example, remote rural areas that are depopulating have a lower median share of children, of working age population and a higher median share of elderly and old age dependency ratio compared to remote rural areas that have a slowly shrinking population or a (rapidly) growing one. This pattern can also be seen in the other areas ( Figure 15 ). This underlines that demographic changes affect all areas.

At the local level, the same pattern can be observed. Remote areas are more likely to experience population reductions and depopulation ( Figure 14 ). Of the remote rural area population, 25% lives in a depopulating area. The risk of depopulation for remote towns and suburbs and rural areas close to a city is similar ( Figure 14 ), but remote towns and suburbs are slightly more like to lose population. At the same time, ‘rurality’ also plays a role as the depopulation phenomena is stronger in remote rural areas than in remote towns and suburbs and, likewise, stronger in rural areas close to a city than in towns and suburbs close to a city (as well as cities).

Rapid population growth, i.e. of more than 7.5 per 1000 residents a year, is more prevalent in urban regions (30% of the urban population), but is also affects rural regions close to a city (9%), albeit clearly less than all other categories of regions.

Remote rural regions and remote intermediate regions are far more likely to experience a reduction in population and depopulation. Around 70% of the population in a remote region lives in a shrinking region and around 25% lives in a depopulating region. In the EU as a whole, 39% of the population lives in a shrinking region and 7% lives in a depopulating region. At the same time, ‘rurality’ also plays a role as the depopulation phenomena is similar in remote rural and intermediate regions, but stronger in rural regions close to a city than in intermediate regions close to a city (and in all cases stronger than in urban regions).

To identify a region that is depopulating, in the sense of experiencing a sustained and substantial reduction of its population, this document uses the threshold of an average annual crude population change per 1000 residents of -7.5 for the period 1/1/2014 to 1/1/2019. This level ensures that only regions that have lost population every year during that five year period are defined as depopulating. To identify local administrative units (LAU) that are depopulating, this document uses an average annual crude population change per 1000 residents of -10.0 for the period 1/1/2011 to 1/1/2018 .

The European Commission report on the impact of demographic change highlighted that slow changes in population are less costly to adapt to than fast changes. It also highlighted that rapid population reductions were more common in (poor) rural regions than in other regions.

Measuring the impact of remoteness at the local level reveals an even greater impact. The population in rural areas close to a city saw a small reduction of 0.03% a year between 2011 and 2018, while population in remote rural areas reduced by 0.49% a year ( Figure 12 ). Remoteness also had a clear impact on towns and suburbs, with population growth of 0.29% a year in the ones close to a city compared to a reduction of 0.13% a year in the remote ones.

The median age in remote rural regions (45.9) is 1.5 years higher than in rural regions close to a city (44.4) and 3.2 years higher than in urban regions (42.7). Changes in the median age in the two types of rural regions have been similar (1.7) and remote intermediate regions experience a similar increase (1.8).

In rural regions close to a city, net-migration is positive (0.8) but not high enough to offset the negative natural change (-1.9). By contrast, net-migration (2.4) in the intermediate regions close to a city is high enough to offset negative natural change (-1.1).

The population reductions in remote regions between 2014 and 2019 are mainly due to negative natural changes. In remote rural regions, annual average natural change is -3.4 per thousand and -0.1 for net migration. In both cases this is clearly less favourable than for urban or intermediate regions. In remote intermediate regions is the impact of natural change (-1.6) is also bigger than of net-migration (-0.6).

Between 2014 and 2019, population in remote rural regions reduced faster than in rural regions close to a city did (-0.3% a year compared to -0.1%). Intermediate regions close to a city gained population over this period, while remote intermediate regions saw their population shrink ( Figure 11 ).

Note: ranked on rural, if not available on intermediate, if not available on urban value

Between 2014 and 2019, rural regions lost more population due to natural change and gained less population through net migration compared to urban ones. Rural regions lost population because positive net-migration was not high enough to offset the negative natural change ( Figure 10 ). On the national level, it is often the same Member States whose rural regions face negative natural change and negative net migration at the same time. Intermediate regions gained population because their net migration was higher and their natural population change was less negative as compared to rural regions. Urban regions experience the highest population growth through a combination of positive natural change and positive net migration.

Note: ranked on rural, if not available on intermediate, if not available on urban value

Net migration presents a different picture ( Figure 9 ). Between 2014 and 2019, average annual net migration was positive in all three types of regions, but was lower in rural regions (0.6 per 1000 residents) than in urban regions (3.4). Net outmigration in rural regions occurred in 12 Member States (9 eastern Member States, Spain, Portugal and Finland), which among other factors, may be due to gap in GDP per head between urban and rural regions in those eastern Member States. Net outmigration was also quite common in intermediate regions, affecting 10 Member States, while relatively rare for urban regions affecting only 3 Member States (France, Greece and Latvia).

Note: ranked on rural, if not available on intermediate, if not available on urban value.

Between 2014 and 2019, average annual natural population change in rural regions was -2.3 per 1000 residents compared to -1.2 in intermediate regions and +1.0 in urban ones ( Figure 8 ). In all the Member States, except Poland, natural population growth was lower in rural regions than in urban ones. Between 2014 and 2019, natural change was positive in rural regions in only three Member States compared to 10 Member States for intermediate regions and 13 Member States for urban regions.

Note: ranked on rural, if not available on intermediate, if not available on urban value

The higher number of men aged 20 to 44 per 100 women of that age in rural regions as compared to urban region can be observed in all Member States, but the intensity varies. In Ireland, the difference between the rural and urban region for this ratio is just one man, while in Estonia it is 19 men ( Figure 7 ).

Women aged between 20 and 44 are more likely to move out of rural regions and intermediate regions than men are ( Table 5 ). As a result, per 100 women in that age group there were 106 men in rural regions and 104 men in intermediate regions. Remote intermediate regions have slightly more men in that age group relative to women compared to intermediate regions close to a city. For rural regions, remoteness does not seem to affect the balance between men and women in this age group. Since 2014, this skewed distribution of young men and women has become more pronounced. In both intermediate and rural regions, for every 100 women aged 20-44, the number of men grew by one, while in urban regions number of men in this age group remained equal to the number of women ( Table 5 ).

Regional data confirms the rural population is significantly older than the urban population. In 2019, the median age in rural regions was 45 years, two years higher than in urban regions in the EU ( Figure 6 ). Within almost all Member States, rural regions had a higher median age than urban regions in 2019. Eurostat projections suggest that the median age will increase almost by four years in all the types of regions between 2020 and 2040.

All the types of area also show a clear bulge in the population distribution with much higher shares of population in their 30s and 40s compared to younger age groups. This means that as the population ages, it will shrink because the younger cohorts are smaller. However, taking into account the population structure ( Figure 5 ), this is likely to affect remote rural areas relatively more than other areas.

Towns and suburbs occupy an intermediate position between cities and rural areas with one clear exception. The population share of people in their 40s is the highest in towns and suburbs close to a city, which may be due to the appeal of suburban living for households with children.

The share of people in their 20s in rural areas is lower than the share of people in their 10s or 30s. This is likely due to people leaving rural areas to find their first job, explore different opportunities to pursue their career or to gain a tertiary education.

In the EU, rural areas have on average a significantly older population than towns and suburbs and especially cities. Cities in the EU have a higher share of the age classes 0 to 40, while rural areas have a higher share among the age classes of 50 and higher ( Figure 5 ). This is even more pronounced in remote rural areas, which have lower shares of population below 50 than rural areas close to the city and higher shares of population of 50 and over.

Rural areas are traditionally characterised as the places of natural resources, where they can be collected, pre-treated and pre-processed, and finally transported to major urban centers. This has put significant pressure on natural resources in rural areas where the (land-use) competition between the production of food, feed, timber and (bio)energy, together with urbanisation processes and environmental services, is considerably high. The urban pressure also increases the consumption of the rural landscape, primarily by the housing sector but also by new economic activities, tourism/recreational or transport sectors. All these sectors claim rural space and might be a threat for the quality and identity of rural landscapes in some particular places (RURBAN project).

By 2040, built-up land is expected to grow by 3.4% in rural areas close to cities and by 1.7% in remote rural areas.

By 2040, forest and natural areas are projected to increase by almost 1% at EU level (Map 5). The fastest increase is expected in rural areas close to a city (about 2%). Forest lands and natural areas will increase in most of the regions in Portugal, central and eastern part of Spain, France and central European countries as well as northern and eastern countries; however, north and south of Italy along with Croatia, south of Greece, Latvia and more disperse regions in Romania, western Germany and Belgium will experience a decline in forest and natural areas.

Rural areas landscapes covered by forests and natural areas help regulate water flows, capture carbon and air pollutants from the atmosphere, prevent soil erosion and provide recreational services. Landscapes where open water and wetlands predominate are evidently important providers of water and water regulating services, mainly located in rural areas.

In the next two decades, agricultural land is expected to decrease in most of the EU regions (NUTS-3). At EU level, the decrease is expected to be of 1.6%. However, agricultural land is projected to increase slightly in some regions, e.g. in Sweden, Spain, the South of Italy, Greece and Finland as well as Latvia and Croatia ( Map 4 ).

Changes in management practices such as agricultural intensification and specialisation might lead to high productivity in more fertile areas, while producing marginalisation and abandonment in some others. Agricultural intensification can also lead to higher pressure on biodiversity and natural resources, as well as transforming landscapes to become more uniform, less diverse and less nature- rich. On the other hand, a sustainable agriculture can help to safe-guard ecological systems in danger and contribute to the development of rich varieties of wetlands or woodlands. Sustainable agricultural management practices can play an important role in protecting the environment.

As agricultural land is concentrated in rural areas, one of the functions of rural areas is food production, ensuring food security. Dependency on land can bring about different challenges for rural areas and the agricultural sector. In high valuable areas, availability of agricultural land and high land prices (in addition to difficult access to credit) affects young farmers in accessing land for agricultural production. Other areas, however, are facing land abandonment that can lead to multiple negative ecological, economic and social consequences. Loss of biodiversity and important bird habitats, rural landscape degradation and increased risks of soil erosion and wildfires are a few examples. Negative economic outcomes include the destruction of drainage systems, a decrease in agriculture land value, loss in profits from agriculture activities, loss of cash flow through the local economy, and a lack of employment and recreational tourism. Especially in rural areas located in remote regions, land abandonment might also occur where ageing and the lack of economic and social opportunities lead to population decline.

Agricultural land, forest and natural areas account for 90% of the territory of rural areas . Agricultural land is the dominant land use in rural areas close to a city (52.5%) whereas in remote rural areas, most of the territory is composed of forest and natural areas (53.6%). The ‘Other land-use’ class plays an important role in rural areas, especially in the remote ones, mainly due to the presence of water bodies, wetlands and other natural open spaces.

Besides remoteness, rural areas are very diverse depending whether they are located in mountain areas, in islands, in outermost regions, in border regions, in coastal areas or in inland regions. These geographical factors play an important role in the land use, in population movements and policy interventions.

Rural areas account for 341 million hectares (m ha), which represent 83% of the total EU land area. More than half of this rural land area is remote, meaning that it is located far from cities. Cities, towns and suburbs account all together for 17% of the EU land area (70.3 m ha).

As a starting point for the analysis of EU rural areas, this chapter describes their importance in terms of EU land area, the different land uses that mark them, and the challenges and opportunities that rural areas are facing in this regard.

A Z score with an absolute value above 1 is considered high, a Z score with an absolute value between 1 and 0.5 is considered moderate. A Z score with an absolute value between 0.5 and 0 is considered neutral.

Then the distributions of scores are analysed. The gap of each Member State is assessed and classified on the basis of the resulting z-scores against pre-defined thresholds.

For each Member State (MS) we calculated a Z score. This was done according to the following formula:

We calculated the gap as the difference between the indicator value recorded for cities and the value recorded for rural areas.

Some of the graphs presented in this document classify rural areas depending on their advantage or disadvantage compared to cities.

Some issues are influenced by how far rural areas or regions are located from the nearest city. Both the degree of urbanisation and the urban-rural regional typology can incorporate this dimension of remoteness ( Map 2 , Map 3 ). The criterion is simple and identical for both definitions: if the majority of the population in an area or a region live more than a 45-minute drive by car from the nearest city, it is classified as remote. Other areas and regions are classified as close to a city. Cities and predominantly urban regions are by definition close to a city.

Note: The 2011 population grid is the most recent official grid. The official grid for 2021 will be published in early 2023.

Note: The 2011 population grid is the most recent official grid. The official grid for 2021 will be published in early 2023.

As an example, Map 1 shows the three geographical levels for Spain and Portugal. From these three maps, it is clear that the amount of land classified as ‘rural’ will differ significantly between the three geographical scales. In Spain, the share of land covered by rural grid cells is 98%, by rural areas is 90% and 17% by predominantly rural regions. The impact on population is more limited, but still significant. It changes from 17% of the Spanish population in rural grid cells, to 27% in rural areas and 4% in predominantly rural regions.

The analysis in this document hence uses data which mainly relate to two geographical levels: rural areas (a classification of the LAU level) and of a predominantly rural region (a classification of NUTS-3 level regions). Both rural areas and predominantly rural regions are defined in the same way: they have the majority of their population living in rural grid cells. The classification of LAUs is called the Degree of Urbanisation and the classification of NUTS-3 level regions refers to the Urban-Rural regional typology.

This document indeed investigates rurality at three geographical levels. The most detailed geographical level consists of 1 km square grid cells, followed by the local administrative unit (LAU) or municipality level and finally the NUTS-3 level regions. Depending on the aspect that is analysed, one level can be more relevant than another. The lowest level at which administrative decisions are taken is the municipality or LAU level. Moreover, certain indicators are only available for one of these geographical levels so that not all thematic aspects can be analysed at the same (desired) degree of granularity. For instance, detailed data on demography, economy (gross domestic product per capita, gross value added per capita, employment by sector), and accessibility to fixed-line broadband are not available at LAU level. As a result, a combination of information from these levels is needed to provide a comprehensive picture of rurality in the EU.

When people speak of ‘rural areas’ they usually refer to different geographical entities depending on their own perception. But also for statistical and analytical purposes there is not one single understanding what ‘rurality’ means.

The Commission Communication takes into account the outcomes of these work streams as a basis for short and long-term actions and policy development. Further details are provided in this Staff Working Document as well as on the Synopsis report of the public consultation, accompanying the Communication.

- A dedicated inter-service group of representatives of the relevant Directorates-Generals of the European Commission under the umbrella of the already existing Inter-Service Steering Group on Demography was also established to ensure that the long-term Vision takes on board all inputs from the different EU policies relevant for rural areas.

- Since it will be a long-term vision, foresight is indispensable to help identifying how rural areas might evolve and the trends and drivers of change that will shape European rural areas in 2040. This exercise was built on ongoing Horizon2020 (H2020) research projects and on contributions from the Commission’s Joint Research Centre, prepared in conjunction with the work of the ENRD Thematic Group on the Long Term Rural Vision including experts from all around the EU. Further details are provided in chapter 5.

- Analytical work has been carried out in 2020 and in the first quarter of 2021 regarding challenges and opportunities of rural areas and actions taken at EU/National/Regional level, including governance aspects (e.g. rural proofing). The analysis considered relevant evaluation studies, the latest statistical information available as well as the outcomes of related research projects and the thematic work by the European Network for Rural Development (ENRD). Further details are provided in chapter 3 of the Staff Working Document.

- A public consultation with citizens, especially people living in rural areas, as well as local and regional authorities. The Commission also ensured consistency and explored links with other consultation activities. Events with the European Parliament, the Committee of the Regions, or the European Economic and Social Committee have also taken place, and synergies found with the ongoing corporate communication campaign on rural areas. The Commission has made the most of the Rural network(s) and their membership as a platform for exchanges and discussions in order to benefit from the long experience and direct contacts with stakeholders at local level throughout the EU. A conference (Rural Vision Week) took place at the end of the consultation process, with a view of taking stock on the outcomes of the public consultation, commenting and complementing its results and making additional input to the Communication. Further details about the public consultation are included in the Synopsis report accompanying the Communication.

- A joint letter to the Member States by the Vice-President and the two Commissioners has kicked off the exercise. It followed the adoption of the Report on demographic change. The objective was to draw attention to rural areas in the ongoing phase of preparation of the CAP Strategic plans and the Cohesion and Regional programmes.

In the mission letters to Vice-President Šuica, Commissioner Wojciechowski and Commissioner Ferreira , there was a specific request to ensure that people living in rural areas, as well as local and regional authorities, are consulted in the development of the vision and for this reason the Commission paid particular attention to public consultation activities.

Rural areas can offer a range of social and economic opportunities to rural dwellers and the society as a whole, with a unique quality of life, job opportunities in many and diverse business areas. In addition to their role in food security, they have a special role to play in the transition to a green and sustainable Europe, by mitigating climate change, providing alternatives to fossil fuels, reversing the biodiversity crisis, using resources sustainably and developing the circular economy. In addition, the COVID-19 crisis could lead to significant changes to society, which rural areas could benefit from and in which they are implicated.

According to the mandate, the vision should contribute to enable rural areas to make the most of their potential and support them in facing up to their own unique set of issues, from demographic change to connectivity, from the risk of poverty to limited access to services but also their potential to deliver innovative, inclusive and sustainable solutions.

The vision belongs to the Democracy and Demography work strand and follows the Report on the impact of demographic change and the Green paper on ageing. However, the rural vision is much broader than demography issues; it embraces all the aspects that are relevant for the future of rural areas. Therefore, links with other key Commission policies and initiatives are also ensured, including the European Green Deal and the related Farm to Fork strategy, a Europe Fit for the Digital Age, the European Pillar of Social Rights and the Conference on the future of Europe. The vision should also build on the “Next Generation EU” Recovery Plan.

Various EU policies currently support and play important roles in rural areas, and are therefore key in developing the long-term vision for rural areas. Those include the Common Agricultural Policy, Regional, Cohesion and Social policies and a number of other EU policies such as those dealing with energy, transport, connectivity, employment, environment or climate.

President Von der Leyen’s political guidelines highlight that rural areas are a core part of our identity and our economic potential and that we will cherish and preserve our rural areas and invest in their future. The mission letters to Vice-President Šuica , Commissioner Wojciechowski and Commissioner Ferreira underline the need for designing a long term Vision for rural areas.

-Rural areas are affected by climate change, the depletion of natural resources and biodiversity decline and are part of the solution

-The EU bioeconomy offers many opportunities – it could reach up to EUR 3 trillion by 2050 - but there is a need to better integrate primary producers

-Rural residents are less satisfied with their national democracy and less likely to vote in national elections

-The proximity to a large number of people, which is among the factors influencing access to services and infrastructure, varies among types of areas and Member States

-The risk of poverty or social exclusion in rural areas is slightly higher than in towns and suburbs and cities

-Early leavers and young people neither in employment nor in education or training are more in rural areas than in cities

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions

For rural women this will mean to find adequate responses to the challenges and take advantage of the opportunities driven by the current transition processes including climate change and demographic transformation. The automation and digitalisation have the potential to speed-up the development of rural areas for the benefit of the whole rural population. This will require up- and reskilling of rural population, in particular women, to acquire the necessary skills to meet the digitalisation demands in the relevant sectors of rural economies. Technology, for example, can facilitate the access to telemedicine, distance learning or other services and thus bridge the gap in the provision of services and create employment opportunities in rural and remote areas.

This implies promoting equal opportunities to thrive for rural women on equal footing with rural men by closing the gender gaps that still persist in the rural areas.

Gender equality is a core value of the EU, a fundamental right and a key principle of the European Pillar of Social Rights. Equality is also an essential condition for an innovative, competitive and inclusive European economy as it brings more jobs and higher productivity.

In general, the provision of incentives and enabling conditions to enhance women engagement in entrepreneurial activities in rural regions could contribute to closing employment, social exclusion and poverty gaps between rural men and women.

Climate change adaptation and mitigation and the need to preserve natural resources can provide opportunities for women to become active in nature-based solutions and the bio-economy. Here a number of job opportunities may arise in the sphere of organic farming, or innovative start-ups in the circular economy. Targeted tailor made programmes to encourage rural women entrepreneurs and women in decision making, including politics, should be supported.

Social enterprises and non-profit organisations have the potential to deliver health and social care services, including for older people, while they could also create excellent employment opportunities for women benefiting from their local roots and their knowledge of the specific community needs.

In general, the share of older people in the EU-27 living in predominantly rural regions and intermediate regions is higher than in predominantly urban regions. Older people living in rural areas are more prone to the insufficient provision of social and health services. The growing number of older people in rural areas coupled with the absence of the provision of services, brings new opportunities in the ‘silver’ and care economies creating new jobs in rural areas. At the same time, better availability of formal long-term care and support for informal carers can enable more women to enter and remain in the labour market and find opportunities in rural areas.

The shift to distance working and learning stimulated by the COVID-19 outbreak has shown that digital technology can be very powerful. It has manifested that it is possible to link teachers/trainers and learners from different geographical locations and thus open up opportunities for providing better and higher quality education in rural and remote areas. This is conditional upon the access to broadband and technologies. Digital technologies have potential to increase the participation of rural women in education and training.

As the EU’s working age population has been shrinking for a decade and this is projected to continue,it is becoming inevitable to attract and retain women in work longer and improve attractiveness of working places and productivity. There are a number of opportunities for rural women to increase labour market participation, to formalise their employment status, enhance their social security rights, improve their quality of life and prevent their out migration from rural regions.

The various challenges faced by rural women referred to above very often lead to women migrating out of rural territory seeking better educational and professional opportunities in cities and urban areas. It has become evident that young and well-educated women are becoming the most likely to leave peripheral regions. This trend negatively impacts the attractiveness of rural regions.

In 2019, the mean and median income level was higher for rural men than for rural women in all Member States. The countries with the widest mean and median income gender gap between rural women and rural men included Belgium, Denmark, Austria, Sweden and Italy. Lower income levels translate into lower pension entitlements for women. Women’s pensions in the EU are on average 28% lower than men’s.

Furthermore, the unequal impact of parenthood and caring responsibilities on women remains one of the main drivers of their lower employment rates, with inflexible work-life-balance options and underdeveloped care and social services, particularly in rural areas, presenting major barriers to female employment. The unequal sharing of the care burden leads to a higher incidence of career disruptions among women, resulting in greater risks of poverty and financial dependency.

There are different drivers of rural gender inequality. Women living in rural areas are typically engaged in informal employment, taking role of carers in their families and in their rural communities (17.8% of women in rural areas provided informal care or assistance compared to 12.9% of men in rural areas). Many of them are involved in agricultural work, but do not receive a separate income from their husband or other male members of the household. By assisting their employed spouses, they are not entitled to social security in their own right and often do not hold property rights to land or farms.

In the majority of EU Member States, the activity rate of rural women tends to be lower than the activity rate for rural men. The average activity rate gap between rural women and men amounted in 2019 to 12.5 pp for EU-27. The EU countries with the widest gender activity rate gap between rural women and men in 2019 included Malta (24.6 pp), Romania (23.4 pp), Italy (21 pp), Greece (19 pp) and Poland (17.8 pp).

The employment rate of rural women in 2019 was lower than the employment rate of rural men in most Member States with the highest employment rate gap between rural women and men attained in Italy (21 pp), Romania (20.9 pp), Bulgaria (19.9pp), Malta (18.5 pp) and Greece (17.8 pp). In 2019, 29.2% of all employed women in rural areas worked part-time compared to 6.7% of employed men in rural areas.

The employment rate of rural women was lower than the employment rate of urban women in 2019 in the majority of EU Member States. The countries recording the highest employment rate gap between rural and urban women, included Bulgaria (15.6 percentage points pp), Croatia (13.5 pp), Romania (12.2 pp), Poland (10.5 pp) and Lithuania (10.1 pp).

This section looks at the situation of women in rural areas highlighting the challenges and opportunities across different thematic aspects.

In recognition of the importance of rural areas for urban areas, a growing number of cities are including rural territories in the scope of their “Sustainable urban development strategies”. Opportunities arise from the emergence of a functional area approach in the design of urban strategies to include more municipalities and rural territories in their scope. This marks a huge step out from traditional urban strategies at the scale of urban municipal boundaries or the neighbourhood, and facilitates pooling resources and establishing inter-municipal cooperation, as exemplified by the JRC in metropolitan areas (e.g. Brno, CZ), medium-size cities (e.g. Goteborg, SE) and small towns and settlements in rural regions (e.g. Plasencia, ES). Although with limited effect for remote areas, this appetite for a more integrated approach between cities and hinterlands can bring opportunities for rural people, who are eager to improve their access to urban services, if it translates into efficient and equitable governance arrangements where urban and rural citizens have an equitable voice and that lead to equitable benefits: a key condition for sustainable rural-urban partnerships. These arrangements develop with either a territorial focus (Community-led local development, Integrated Territorial Investments) or a thematic one (food procurement, regional mobility plans –e.g. Flanders- etc.) mainly in the context of proximity relations. However, they can benefit rural areas only if designed in partnership and respecting a number of conditions, such as a balanced representation of rural and urban parties and support for municipalities with smaller teams to take part and voice their needs, for example via bodies acting as facilitators. More in general, in this context, it will be important to pay attention to the specific situation and needs of remote areas by considering - in line with the suggestion by the OECD – to differentiate policy approaches for rural areas close to cities and for remote areas.

Improving the governance of territorial interactions is one of the ways forward to improve future rural prospects. Governance arrangements that facilitate cooperation and networks between authorities and/or other actors (citizens, NGOs, businesses etc.) are needed to better govern these linkages with adequate scales and formats depending on the issues at stake. These must consider the functional role, importance, challenges, and opportunities of each territory and enhance synergies, economic local or regional spill overs and the feeling of all citizens that they are included and have access to positive prospects. Territorial development also needs to be integrated across policy sectors and across levels of administration.

Cross-border cooperation offers many opportunities to EU rural areas. The development of cross-border cooperation is likely to improve service provision as well as economic opportunities for rural border areas and people who live and work on both sides of these borders. Cross-border cooperation over time generally leads to more stable partnerships and cooperation tends to become deeper and spill over to new areas. As people interact more across the border they become aware of various obstacles. These can be for instance legal, administrative, infrastructural or cultural. In cross-border areas with intensive interaction obstacles tend to be addressed and opportunities tend to be explored to a greater extent than in cross-border areas with a lower interaction intensity. This includes the provision of cross-border services. The macro-regional strategies offer a comparatively new framework for cooperation activities involving actors from the local and regional level, that is likely to further enhance cross-border cooperation benefits.

Governance arrangements that foster integrated cooperation across borders at the macro-regional or transnational scale are also developing, in the EU context and outside of it. More and more regions are interested in participating in different cooperation formats, thus opening new possibilities for rural regions to actively contribute. These new networks are not implemented top-down but derive from and are implemented in strong connection with the regional and local level.

The OECD has worked on rural-urban partnerships in the context of networks of small towns. However, the intensity of linkages between cities and remote areas and what they can provide is harder to evidence. Thus, the OECD suggests differentiating policy approaches for rural areas close to cities and for remote areas. Another challenge in the representation and analysis of urban-rural functional linkages is to have access to appropriate data. Especially when the functional area is not corresponding to administrative supra-municipal entities, it is difficult to retrieve comparable and homogeneous data across multiple municipalities, with possible different areas of interest.

New approaches to territorial development are on the rise that place a greater emphasis on social and environmental objectives and on the territorial anchorage of economies, including a concern on resilience. The ROBUST project identified five domains where innovative approaches have the potential to enhance rural-urban synergies: social services (focus on social welfare, services, accessibility); social and spatial proximity relations (reduction of physical and social distancing through e.g. short value chains; circularity (closing loops); green economy (rewarding beneficial ways to deliver ecosystem services) and culture and heritage. Innovations around procurement, short value chains, smarter ways to reward the provision of ecosystem services, regional branding, for instance, if managed in specific ways, can improve the recognition of the value of rural areas for urban citizens, the understanding of the specific needs of rural populations and the business models and governance arrangements. These opportunities are mostly demonstrated in city-hinterland relations or at regional levels. They are less evident in the case of rural areas that are further away from the urban centres. Innovations that celebrate cultural heritage (food, historical routes, pilgrimage etc.) and seek to create value from it can bring benefits to rural areas in both close to city and remote areas. New trends such as multi-locality living whereby people choose to distribute their lifetime between various places, sometimes far away from each other, also brings rural-urban relations within a much larger scale. Digital as a distance remover and a way of engagement may also be an opportunity to invigorate multi-level governance of these territorial interactions and participatory processes.

Joint identified challenges for rural populations under macro-regional strategies include access to public services, connectivity, preservation of natural habitats, increasing competitiveness and innovative capacity. Rural regions exhibit notably lower transnational cooperation. This can indicate lower capacities to absorb European Structural and Investment Funds (ESIF) in the rural regions, or a weakly institutionalised cooperation in the rural areas. The rates of participation get higher where longer cooperation formats exist. Building networks comprising local actors from wide territories across administrative and linguistic borders demands investments in time and staff.

Rural border regions often have weaker transport connections, both across the border and within the national border regions. On average, rural border regions have lower road and rail performance compared to other rural regions. Furthermore, people living in rural border regions have to drive further to access public services such as healthcare and education. For example, the distance to the nearest primary or secondary school or hospital is greater in rural border regions than in other rural regions. In addition, interaction across the border is limited by legal and administrative border obstacles. Moreover, the COVID crisis added a further layer of obstacles to border regions with the temporary closure of borders.

In addition, challenges arise from the governance of these rural-urban relations. These include a lack of coordination between authorities (in space and across administrative departments e.g. spatial planning), a mismatch between administrative boundaries and the challenge to address, lower power of rural citizens in decision-making bodies, vested or incompatible interests, rigid regulations, high transaction costs, lack of continuity or inconsistencies in policy frameworks or property rights, uncoordinated urban planning and wider spatial planning; lack of synergies in economic development and constraints on resources and infrastructures. Moreover, obstacles derive from possible power conflict, the defensive attitude of actors involved, wide disparities in growth, employment and living conditions between areas, lack of data able to represent the urban-rural region, or simply rejection of additional administrative burden.

Other challenges include urban services not being designed to meet needs of rural residents who need to access services in the city (e.g. mobility), unsustainable transport and logistics, lack of connections between producers and consumers. While some of these challenges are being addressed in the context of functional urban areas, rural areas that are not included in these functional approaches, remote from the main decision centres and uneasily accessible are unlikely to benefit. Preconceived ideas and images of urban and rural areas, such as for example considering urban areas as engines of growth and rural areas as lagging behind, can be counterproductive.

Challenges for rural-urban relations include the tendency for urban areas to expand (urban sprawl in areas close to cities) and gentrification (in close to city or remote areas with high amenities), that leads to the loss of productive, recreational and biodiversity space and can compromise long-term development prospects or push away rural residents (housing and land), and can trigger conflicts over land-use. In the context of COVID-19, the unplanned move of urban people to rural areas has put pressure on service provision capacity to non-permanent residents.

Rural areas are also playing a key role in the governance of macro-regions. Currently, there are four macro-regional strategies in place where rural areas are actively involved in defining joint challenges, be it in sea basins, along river shores or mountain ranges, in which the various rural areas are connected, ecologically (e.g., Alpine range, Baltic sea), economically (tourism), or historically (e.g., Balkans). Especially two of these strategies cover a relatively high share of population living in rural areas: the Baltic (27 %) and the Danube (32 %) strategies.

Border regions are more likely to be rural regions. One third of the population of rural regions, lives in a border region (35%) compared to 21% of the total EU population. As a result, the rural population is more likely to live close to a national border. In many cases, the rural border regions are also remote, located far from capitals and other cities.

Urban-rural linkages refer to the complex set of bi-directional links (e.g. demographic flows, labour market, economy and tax flows, public service provision (e.g. health, education), mobility, environmental or ecosystem and cultural services, leisure assets, food and bio-based products, land-use planning etc.) that connect places. They shape up in a space where urban and rural dimensions are physically and/or functionally integrated, blurring the distinction between urban and rural, and crossing traditional administrative boundaries. These linkages can express themselves between a city with an urbanised core and a peri-urban area or within a wider functional area covering a central city and adjacent rural hinterland, as exemplified by the JRC in metropolitan areas (e.g. Brno, CZ), medium-size cities (e.g. Goteborg, SE) and small towns and settlements in rural regions (e.g. Plasencia, ES). Although with limited effect for remote areas, they can also connect geographically distant places through functional links (e.g. linking agricultural production areas to urban markets, river basins etc.).

Administrative boundaries do not reflect well territorial realities, connections, and functional linkages. Communities interact in many ways and the geography and intensity of these interactions depend on the area looked at (close to metropolitan area, within a network of small towns, cross-border, remote, coastal, mountain). It also depends on the issue looked at (catchment area or sea basin for pollution or water supply, commuting zone/mobility area for labour market or access to services, ecological corridors for biodiversity protection etc.). Rural areas are thus interdependent with one another and with urban areas in multiple ways and at multiple scales, within a country and across boundaries.

This section deals with relationships between different types of rural and urban areas beyond administrative borders looking at challenges and opportunities for rural areas.

The implementation of an ambitious climate and nature restoration agenda through integrated systems thinking, including reform of economic and fiscal incentives, and effective multi-level governance, and valorising Copernicus Earth Observation data and applications, will enable rural communities to seize new opportunities and to move to an environmentally sustainable rural future.

The transition to a safe green future for all also has to be people centred, leaving no-one behind, and recognising that rural communities have an important role to play in preserving and protecting the natural resources upon which our societal wellbeing depends. Implementing a just transition implies working with rural communities, establishing social dialogue and seeking consensus on how to mitigate the cost of measures, ensuring that those least able to pay do not bear disproportionate costs. It also requires adequate support, helping the most vulnerable to make the most of opportunities offered by the greening of the economy.

The focus in settlements should be on converting/reusing existing buildings, using brownfield sites, and ensuring that all new housing is climate neutral, both in construction and in use. Effective and coordinated planning systems, working with local communities, will be needed.

Currently, the main policy measures encouraging environmentally beneficial land management are designed to compensate for costs incurred and income foregone, principally for compliance with WTO green box rules. If take-up on the scale required to meet the targets of the Green Deal is to be achieved, mechanisms are needed which reward the value of provision of public goods, not simply the cost of providing them. This must include the development of market-based mechanisms and the use of fiscal measures, since public funds are unlikely to be sufficient to meet needs. It is important to identify and promote win-win solutions that maintain and enhance natural capital without exploitation or degradation, whilst generating economic opportunities.

Pollution from agriculture negatively affects a wide range of habitats and species. Changing agricultural practices to improve sustainability, in particular by reintroducing appropriate grassland management and reducing fertiliser use is recognised as one of the key actions needed to reduce pressure on the environment.

The increasing incidence of flooding, droughts and wildfires presents particular difficulties for agriculture and forestry, with a need to adapt management practices and/or enterprises to increase resilience (e.g. growing more drought resistant crop varieties, improving soil health and avoiding soil erosion, planting trees for water management, increased fire prevention management such as grazing forest undergrowth).

The gravity of the climate crisis and ecological emergency must not be underestimated. These intrinsically linked issues, and the policy instruments designed to address them, have significant impacts on the social and economic wellbeing of rural areas and will continue to do so during the period up to 2040 and beyond.

·Water scarcity and increasing cost will affect economic activities requiring water, such as tourism and agriculture, driving shifts to systems requiring less water. Water scarcity will also increase environmental degradation such as wildfires in forests, moorland and peatland.

·Population shift to some rural communities will increase pressure on housing (both to provide for newcomers and to avoid existing community members, especially the young, being priced out of market).

A range of other drivers linked to climate change and biodiversity will affect rural communities in the period up to 2040:

Global biodiversity loss is projected to increase to 38-46% by 2050. The interaction of many factors leads to the decline of biodiversity and the degradation of ecosystems, including habitat and land use change, over-exploitation of natural resources, pollution and climate change.

Even if current climate pledges are fully honoured by all parties, climate change is still heading far from the 1.5oC pathway. Scientists consider an increase of 2oC, compared to the temperature in pre-industrial times, as the threshold beyond which there is a much higher risk that dangerous and potentially catastrophic changes in the global environment will occur. There is only a very short time left to avoid reaching irreversible tipping points.

Achieving these climate and environment benefits is expected to generate jobs and economic opportunities for rural areas. This will include clean and affordable energy, the circular economy, sustainable and smart mobility, a pollution-free environment, thriving ecosystems and sustainable food systems, which will benefit both rural and urban citizens alike.

The cost of reducing GHG emissions has been decreasing thanks to technological developments. Renewable energy costs have plunged in the last decade, becoming cheaper than fossil fuels in many countries, spurring a boom in clean power, for example solar and wind farms. Electric cars and domestic heating that is not dependent on fossil fuels could soon be cheaper than current fossil-fuel based energy and help to address energy poverty, especially when combined with measures to improve the energy efficiency of homes.

As the wider importance of nature conservation for a functioning economy, and its contribution to GDP and well-being, become more widely recognised, so the willingness of both public and private entities to make climate and environmentally beneficial investments should increase. Wise and effective investments are not “either-or”, but “both”, where the economy and the environment are not conflicting objectives, but complementary.

There are many win-win solutions, which combine climate, environment and socio-economic benefits. For example, restoring soil health and natural landscapes damaged by human exploitation can be one of the most effective and cheapest ways to combat the climate crisis . Nature-based solutions can generate significant business and employment opportunities . Natural ecosystems, which are self-regenerating, can be a springboard for new integrated, resilient wealth-creating systems. The appeal of beautiful countryside, landscapes, wildlife and rural heritage to tourists is well known and many rural regions of the EU benefit from this. The benefits of NATURA 2000 have been valued at between EUR 200-300 billion per year.

The green transition to a climate neutral future with flourishing biodiversity presents a wide range of potential opportunities for rural communities to thrive, provided that there is an adequate enabling framework. Communities should be encouraged to identify opportunities and be empowered to seize them.

Techniques and methods recognised as beneficial may not be widely implemented due to lack of widespread knowledge and skills. For example, the transition to more sustainable agricultural systems such as agro-ecology or organic farming requires a high level of management and specialist understanding of ecological systems and processes.

Even though many climate and environment-friendly investments and system changes are cost-effective in the longer term, short-term competition for resources and/or a long lead-in before a positive cash-flow is generated inhibit uptake of beneficial changes. Similarly, even where public support is provided, uncertainty over its long-term continuity can constrain uptake (e.g. for rewetting carbon-rich drained farmland). Providing appropriate incentives, pump-priming, and eliminating barriers for the take-up of nature-based solutions is a challenge that must be overcome in order to ensure wider implementation of beneficial approaches.

The increasing incidence of flooding, droughts and wildfires presents particular difficulties for agriculture and forestry. Some of the problems such as soil degradation, water pollution, pollinator decline, invasive species, nutrient run-off, droughts and floods are already incurring economic costs, either through reduced yields/lost production, or the cost of addressing the resulting problems such as algal blooms. These costs make it harder for businesses and communities to find funds to invest in improved systems with higher environmental performance.

The climate and environment transition will lead to reduction or closure of many current resource extraction industries typically based in rural areas, such as coal mines and mineral extraction. Sustainable and climate friendly ways to use these former sites could include forestry or renewable energy, aiming to generate economic, social and environmental benefits.

Paradoxically, whilst being the source of climate and environment solutions that benefit society as a whole, rural communities are also potentially exposed to greater costs associated with the climate and environment transition. For example, longer travelling distances to access services such as hospitals, schools, shops and banks, coupled with greater dependency on private cars due to poor public transport, incurs higher travel costs.

Many of the public goods essential for mitigating and adapting to climate change, and addressing biodiversity decline, originate in rural areas. For example, water supplies for urban areas are purified as they filter through forests and soils upstream in the catchment area; riverside water meadows protect towns from seasonal flooding; afforestation, reforestation, sustainable forest management and restoration of wetlands sequester carbon from the atmosphere and protect existing carbon stocks.

It is important to ensure the future diversity of land use, rural-urban balance, biodiversity and the use of space for living and working, while minimising impact on existing natural habitats or to avoid fragmenting ecosystems, since it is hard to restore them once damaged.

Land cover change, including loss of traditional farming landscapes and land and soil degradation are key causes of the loss of ecosystem services. Around 25-30% of agricultural soils in the EU are currently losing organic carbon, receiving more nutrients than they need, are eroding, compacted or suffer secondary salinization.

Competition for land use is a perpetual challenge, and one which is likely to intensify post-COVID-19 with increased scope for remote working and interest in moving to rural areas for a better quality of life. Whilst this can bring benefits in terms of revitalising rural communities, the balanced use of land and other resources should be taken into account, not only as regards agriculture, but also housing, roads, bioeconomy activities or renewable energy.

Another challenge is linked to public perceptions of countryside and what constitutes valuable or acceptable landscapes. For example, wetland reedbeds may be perceived as less valuable than trees planted on drained land, or semi-natural scrub-rich extensive pasture may be considered “untidy” or “unproductive” compared to improved grassland. This can also affect farmers’ willingness to change land use in favour of more healthy ecosystems.

Rural land management contributes to both climate change and biodiversity decline but can also be highly instrumental in addressing them. Rural areas contribute to GHG emissions and climate change, particularly through land use management (emissions from fertilisers, livestock, soil carbon release, drainage of organic soils, deforestation). For example, 53% of the EU’s anthropogenic methane emissions come from agriculture, and nitrogen values in 65-75% of agricultural soils exceed critical levels beyond which eutrophication can be expected. Land management can also contribute positively, for example raising the water table in peatland areas reduces GHG emissions, and high nature value farming systems support many rare species of plants and insects, and raising the water table in peatland areas reduces GHG emissions. Housing and mobility characteristics of rural communities also contribute to climate change differently from urban settlements (lower density housing in rural areas, longer distances travelled to reach services).

Well-functioning ecosystems are essential for a healthy and sustainable environment, necessary to provide food, water and clean air, but also make an invaluable contribution to economic output. Over half of global GDP depends on nature and the services it provides; construction, agriculture, and food and drink are the main three dependent sectors. Well-functioning ecosystems also increase resilience, for example against pandemics such as COVID-19 pandemic. Investment in natural capital is recognised as offering high economic returns and positive climate impact.

Biodiversity is declining faster than at any time in human history. Over the past 40 years, global wildlife populations have fallen by 60% . Pollinators, on which 75% of global food crops rely , are in steep decline. Water scarcity is an increasing problem in some areas of the EU, and the quality of freshwater also raises concerns.

Despite the Paris Agreement, current predicted global greenhouse gas (GHG) emissions trends are well above those consistent with a 2oC pathway. If current trends continue , global warming is already likely to reach 1.5oC between 2030 and 2050, with multiple effects including increasing the frequency of floods, droughts, wildfires, heatwaves and extreme weather events, shifting species distribution and the resilience of invasive species, causing sea levels to rise, and impacts on freshwater availability. Whilst the specific impacts may vary across the highly diverse rural areas of the EU, the consequences of climate change represent a common challenge.

-Rural areas are affected by climate change, the depletion of natural resources and biodiversity decline and are part of the solution

This section deals with challenges and opportunities of rural areas in the context of climate change, the need to look after natural resources and the potential of the sustainable bioeconomy, ecosystem services and nature-based solutions.

To enhance their innovative activities, rural innovators need to benefit from an enhanced and supportive enabling environment or “innovation ecosystem” that guarantees access to physical and digital infrastructure and services, improved access to knowledge (including through dedicated rural research), advice and business development support, cooperation around collective projects, and improved connections and networking to source inspiration from good examples, foster entrepreneurship and build links with science. To build such a supportive environment or “innovation ecosystem” requires the full recognition of rural innovation potential and performance. This includes improved indicators that capture the specifics of rural innovation, and integrated strategies to enhance rural knowledge and innovation systems or use of tools and concepts for driving innovation, investments, talent attraction and generation of business opportunities such as living labs, smart villages or start-up villages.

But the innovation potential remains only partially tapped due to weaker enabling conditions than those enjoyed by urban counterparts, and socio-economic situations that limit the capacity to take risks or the capacity to access finance.

Innovation is already happening to various degrees in different places, in all forms (from technological to social innovations) and in all sectors of rural life and economy, with incremental, challenge-driven, bottom-up innovation powered by cooperation and collective action playing a key role.

There is a wide need and potential for rural innovation to address the challenges rural communities are facing, help them seize opportunities and develop novel tailored solutions to improve the well-being of rural people while bringing social, environmental and economic progress for EU society as a whole, in particular with regard to the green transition.

Education levels should improve overall and are likely to increase faster in rural areas that will be able to benefit from the post-COVID-19 pandemic attraction to rural areas. However, trends in the development of human and social capital are likely to be highly place-dependent. Counter-urbanisation is predicted by some foresight experts while scientists observe increasing trends of “multi-locality living” that should also favour knowledge flows to rural areas. The possibility to attract people looking for a high quality of life in a more peaceful and healthy environment than in major cities may offer development paths for strengthening human and social capital, hence innovation and residential economies in rural regions, including those with disadvantages.

Digitalisation is likely to accelerate as a result of the COVID-19 pandemic and of ambitious policy agendas. Financial capacity to upgrade the infrastructure alongside action to address the digital skills divide and other key elements to support digitalisation will be key determinants of the situation in 2040.

The “4th industrial revolution is however also expected to accelerate territorial differences”. Following current developments in the technology sectors such as artificial intelligence, nanotechologies, decentralised computing and robotics, the innovations will be far-reaching. This could prove problematic as most of the rural areas with demographic challenges may lack the skilled human capital or the infrastructure to develop competitive industrial centres, thus potentially creating “regions left behind”. Trends in the intensity of trade and in business model development will also impact rural innovation, as many activities are included in international trade flows that frame their economic conditions and the means they have to invest in research and innovation.

The paradigm shift to a green and circular economy is a driver for a high level of technological and social innovation, which may give areas currently leading in these fields a clear head start. Regions and communities taking ownership of their economic development by using their local assets and designing their own economic model will benefit from the increased autonomy and the flexibility their approach provides them, notably in associated domains such as social development or environmental preservation. Innovation in business models that are able to create and retain value in rural areas will be key. Beyond developments in farming, forestry, food and bio-based sectors, developments in smart mobility and the use of technologies to better match supply and demand in ways that specifically answer rural needs (e.g. ride sharing and e-hitchhiking apps ) are important for the green transition.

The key drivers of rural change are, according to OECD, i) additive and distributive manufacturing; ii) digital connectivity; iii) cloud computing and the internet of things; iv) drones; v) driverless cars; vi) the future of education; vii) the future of health; viii) shifting values and preferences; ix) decentralised energy systems; and x) the future of food. Technologies that create more deconcentrated and network-based distributive production systems have the potential to reshape the geography of economic activity in favour of rural areas. Innovation will be critical for rural areas to benefit from these key drivers of change as will key infrastructures (transport, connectivity etc.). OECD also posits that “rural areas will play a central role in meeting the major global opportunities and challenges of the 21st century around climate change, new energy sources, circular and bioeconomy, food and nutrition security for a growing global population, reducing poverty and ensuring the sustainable provision of natural resources that will support the next production revolution”.

It is very hard to predict the impact that current trends will have on rural innovation, cooperation and networks. Several megatrends are rather positive for the innovation potential of rural areas (increased interest in the sustainable bio-based sector and circular economy, evolution of working patterns with e.g. more telework, raising interest in healthy food and sustainable diets) and are likely to improve some of the enabling factors (digitalisation). However, these trends express themselves in very variable ways in different rural areas in Europe and are likely to lead to varying results by 2040. The way innovation develops in different territorial contexts is very variable and the various dimensions of rural innovation are still largely under-researched. The outcome will depend on the pace of change and the capacity of rural territories to keep up with that pace depending on their local conditions.

Opportunities for cooperation and networking stem from the sense of community that is common to many rural villages. This strong community spirit comes from the smaller size of the communities, common challenges faced, tradition, culture and values. This is embedded in the notion of social capital, recognised in literature as playing a key role in rural development and in rural innovation. The COVID-19 pandemic has seen multiple examples (e.g. organising local food supplies, compensating for labour shortages on farm, caring for the elderly) of local rural communities coming forward with their own solutions to tackle challenges that emerged during the COVID-19 pandemic in a spirit of community solidarity, and a strong interest for sharing this knowledge and experiences facilitated also by digitalisation.

The improvement of social capital (i.e. collective norms, trust and networks) and the diversification of rural populations through rural newcomers (educated pensioners, remote workers, new entrants into farming etc.) is an opportunity to increase the average education levels of rural populations. This is likely to accelerate with COVID-19 pandemic in the most attractive and well-connected areas. The need to cope with the impact of the COVID-19 pandemic brings opportunities around evolution in working methods, distance learning and telework that could trigger skilled people to relocate in rural areas, especially in the most accessible rural areas. COVID-19 pandemic also triggered a renewed interest for rural tourism at the expense of destinations abroad or in denser places, which could prove interesting for innovation in this sector.

Public service decline, or specific shocks such as those experienced during the COVID-19 pandemic, can increase pressure for rural businesses to be more innovative or for rural people to find solutions themselves, especially through social innovation. This has been observed e.g. in catering, child and health care, education and business development support . In some cases, innovation triggered by rural challenges develops at the interface of rural and urban areas and in partnership. Innovative approaches providing benefits for rural and urban citizens alike have been observed for example for local food procurement, or integrated mobility systems organised through inter-municipal collaboration.

Improved connectivity and digitalisation are an opportunity to address many of the weaknesses linked to low density of people and businesses that hinder the emergence of rural innovation: they could improve skills, education, training, knowledge and information flows, opportunities for cooperation and networking, access to employment, access to services and access to markets and enabling technologies. This is true in the primary and secondary sectors, where digital innovation plays a central role in improving productivity, reducing environmental impact and connecting producers and consumers (digital farming, sensors in agri-food processes, modelling to optimise resource use and production and processing methods, web platforms for marketing and traceability). This also holds for the service sector, where digital technologies can help develop e-services (education, health, bank, mobility), and e-governance and participatory processes, as explored in smart villages . Technology is transforming in particular the provision of health and care services. When used correctly, the latest technologies can improve both the quality of care and social cohesion. However, digitalisation can be beneficial for rural areas and communities only if the basic conditions in terms of infrastructure, skills and accessibility are met quickly enough to enable rural businesses to remain competitive, especially in remote areas, if the potential labour-saving effects of digitalisation are mitigated with the creation of new rural jobs and adequate training or re-skilling for workers, where necessary. A further condition is that relevant applications matching the specific needs of rural actors are developed through participatory and place-based approaches. Important opportunities come from developing digital innovation hubs, local technology hubs, brokers or intermediaries (e.g. local fablabs, smart villages etc.) that ease access to digital tools and needed skills for community actors or small entrepreneurs and SMEs that have no direct digital production process or activity. Many actors of the social economy, for example social entrepreneurs, are involved in such programmes (open food networks, local taxi platform cooperatives, coops/community organising delivery, mobility, sustainable tourism like fairbnb) which help them use digital technologies to optimise profitability.

There is a renewed dynamism of research and innovation in the resource-based economy and the natural resources on which such innovation depends are mainly located in rural areas. Public investments in agricultural research and development for example are raising since 2016 after a period of stagnation or decline. This direction is further pushed by major policy objectives responding to increasing concerns over dependence on fossil fuels, resource scarcity, climate change and biodiversity loss. The sectors linked to the resource-based economy include the bio-based economy, the circular economy, renewable energies, food, farming and forestry. Rural areas provide space for the development of renewables, which could turn into an important source of income for rural communities. Ecosystem services and innovation around their valuation and valorisation through recreational activities is also an important field for rural innovation. A majority of local innovation projects (53%) funded under the agricultural European innovation partnership (EIP-AGRI) focus on alternative types of farming such as organic farming, agroecology, adapting circularity principles to farming, and bio-based production, in close connection with increasing investments in research activities on more sustainable farming. A significant proportion of them also address wider value chain innovation needs around food quality, processing and nutrition (22%) alongside circularity and bio-based sectors with e.g. projects on waste and by-products (9%) or energy management (5%).

Opportunities for rural innovation come mostly from i) dynamic developments in some sectors or technologies, ii) the challenges related to rural difficulties that can act as triggering factors for innovation; and iii) the efforts needed in response to the COVID crisis.

Challenges to cooperation and networking include, for joint projects carried by beneficiaries located in different regions or eligible under different programmes, administrative and legal obstacles, difficulties in accessing finance for cooperation (lack of alignment and coordination between various support programmes, or for the timing of calls for projects), distance, insufficient skills (including language in cross-border cooperation and networking or between different types of actors (e.g. scientists and businesses), in particular when it comes to facilitating interactive bottom-up innovation projects that are best suited to fit the needs of rural people and businesses). There can be also difficulties in identifying connectors or innovation intermediaries that can help link businesses across borders.

The European investment bank (EIB) explored key characteristics of innovation in the agri-food and bio-based sectors, both of which they identify as important drivers of employment in rural areas. In agri-food, they identified a risk-adverse behaviour and low innovation rates. Less than 50% of all agri-food companies in the EU undertook innovation activities over the three years preceding the study, while only 9% innovated in core areas such as technology, products and processes. This figure contrasts with the need for innovation to help the sector respond to a raising food demand and sustainability challenges. For the EIB, this behaviour is driven mostly by market characteristics, competition that is generally more on price than on quality, innovation or environmental impact. Price competition, in combination with low margins and long payback periods, limits the appetite and possibilities for innovation and risk-taking. This also reduces the financing of agri-food innovation, which suffers from a fragmented landscape and lack of specialised investors with sufficient knowledge and willingness to take risks. The most frequently mentioned reason that finance was not obtained was an unclear or unproven business model. Other reasons were poor commercial outlook, limited financial track record and regulatory uncertainty. A visible financing gap exists regarding the scale-up of smaller agri-food innovators that earn EUR250 000 to EUR5 million per year. The agri-food innovators that reported difficulties in accessing finance were looking for loans of EUR 250 000 to EUR 1.5 million. The EIB equally identified a financing gap in the bio-based industries sector, in particular for funding the scaling-up of innovation from pilots to demonstration or industrial scale plant, with uncertainties on regulation and demand development also playing a key role. Access to finance is also highlighted as one of the key concerns of new entrants into farming, who tend to be promoters of green and social innovation.

Limited infrastructure and low accessibility and digital connectivity also act as barriers to cooperation, networking and sourcing of knowledge from outside for innovation, as they limit access of people and businesses to new markets and services (including innovation support services) and educational opportunities. This can also limit the attractiveness of rural areas as places to live and work for innovative people and businesses. As shown in this document’s chapter on infrastructure, access to digital infrastructure still bears challenges for rural regions. Beyond the infrastructure challenges, there are barriers in rural areas around digital skills and uptake of digital technologies by both people and businesses which need to be lifted simultaneously as the infrastructure is provided.

The effect of education levels in the area seems important for innovation capacity in a majority of sectors, although firms may source an important proportion of knowledge from within or from distant networks. Education levels of people living in rural areas, in particular tertiary education, are improving but lower than the EU average, as mentioned in this document’s chapter on education, and several elements of human and social capital (e.g. skills, willingness to cooperate) can be weaker, depending on the regions. A critical mass of innovation actors is also important, in particular research centres. The capacity to profit economically from knowledge creation and exploitation varies greatly across Europe, with regions in west and north of Europe, being more advanced than eastern and northern Europe regions. Compared to urban areas, the rural innovation eco-systems have fewer higher education institutions and specialised research facilities, resulting in fewer highly skilled researchers that can provide innovation input and interact with local businesses, via local clusters for example. Similarly, SMEs and entrepreneurs, who are generally smaller and with limited individual capacity to invest in R&D, may face less developed business and innovation support infrastructure and services, and less technology transfer or knowledge exchange actors. Innovation support services may be accessible but not designed to support the kind of innovations and innovation actors that are in rural areas. Rural areas are often left out of innovation chains and with limited access to innovation capacities in the cities.

Challenges to rural innovation mostly relate to weaker enabling conditions and environments that prevent the full expression of rural innovation potential. These differ depending on the specific institutional, economic, social and environmental conditions of each area, which vary greatly across Europe.

·Cooperation and networking are essential: as rural areas are less dense in people, businesses and knowledge creation facilities, people need to cooperate with one another internally as much as possible, and also to cooperate and network to source knowledge from people and institutions outside their local area, whether from urban centres or by exchanges with other rural areas, within the country, across borders or transnationally. Research has shown that active cooperation (including cross-border and international cooperation) can compensate for the lack of resources inside the rural area.

·Social innovation typically plays a great role alongside technical or technological innovation, as solving many of the rural challenges requires inventing new ways of doing things, new ways of delivering services, new business models, and new ways of cooperating coming bottom-up from rural community members.

·Innovation tends to be more incremental: it is more about repurposing, adapting, using differently existing knowledge or technology than about inventing brand new knowledge.

·Innovation is initially sparked by internal and external challenges (e.g. withdrawal of the public sector from service provision, tougher environmental regulations) rather than by the creation of knowledge inside the rural area (as research centres are usually less numerous in rural areas).

All forms of innovation happen in all rural sectors and fields of community life. Examples include resource-efficiency driven innovations in farming, process optimisation in food and bio-based industries, social innovation changing value chain organisation, service provision or valorisation of cultural heritage. Technical and technological innovations in the sectors related to the management of natural resources also mostly happen in rural areas. A range of scientific publications have found rural innovation to have some or all of the following characteristics :

The OECD highlights that rural and urban regions alike have the potential to innovate and grow, while United Kingdom’s innovation agency NESTA stressed in a key report on rural innovation that many innovations in health, housing and transport have emerged primarily in response to growing demand in the primary sectors in rural areas (such as the need to transport materials or manage land-use that led to the development of geographic information systems widely used by drivers today) and that some rural areas have shown extraordinary success in transforming themselves into global centres of innovation (e.g. the technology park of Sophia-Antipolis (FR)). NESTA further argue that there is an important relationship between rural natural resources and innovation. They add that the growing strategic importance of sustainable technologies that rely on rural resources has enhanced this relationship and triggers a renewed political interest in the role of rural areas in the wider economy.

Rural areas are commonly assumed to be less innovative than urban areas, because of their lower density of people and businesses, lower connectivity and accessibility, and a more limited presence of highly educated people, universities and research centres, criteria that are considered as key conditions for innovation. Several studies nuance or contradict this assumption and highlight that innovation types, patterns and enablers vary across countries, regions and rural and urban localities. This is something that current ways to measure innovation (including European innovation scoreboards and indicators for Sustainable Development Goals ) insufficiently capture because they are applied at a too-wide geographical scale (NUTS-2), focused on forms of innovation that are more typical of dense regions and less well adapted to capture process, market, organisational or social forms of innovation that do not result in patents or science publications.

Institutional capacity is a key factor. Redirecting action and investment from current practices into fully-fledged circular development pathways in rural regions requires a cultural change and a new mix of skills in rural communities, coupled with proper incentives for local governments. Rural communities should be supported through training and education, both on the technical aspects as well as business models and management, so as to create new employment opportunities during the transition to a low carbon economy.

However, its implementation in terms of research and innovation capabilities needs further efforts to accelerate the transformation by bringing innovations faster into the market.

The sustainable bioeconomy has also the potential to support primary producers in creating additional outlets for higher value added products, improving the resource efficiency of their activities and spurring innovation in the primary sector. Primary producers should play a more central role into the value creation of the sustainable bioeconomy supply chain, which should be achieved by increasing awareness and knowledge through targeted advisory services as well as supporting new business and cooperation models.

The bioeconomy is considered as a major tool for reviving rural areas, creating more innovative jobs in primary production and processing, contributing to generational renewal and fighting de-population of rural areas. It can help rural regions to identify place-based, cross-cutting initiatives that enhance environmental conservation and regeneration while creating new jobs, improving food and water security, and promoting a transition to a climate-neutral and circular economy. There are also opportunities in terms of implementation of synergies in new biobased value chains across regions based on their smart specialisations.

Global challenges such as climate change, land and marine ecosystem degradation, coupled with a growing population and the COVID-19 crisis impose seeking new ways of producing and consuming resources that respect our planetary boundaries, moving away from a linear economy based on extensive use of fossil and mineral resources. To tackle these challenges, the way natural resources are managed needs to be improved and healthy ecosystems need to be maintained through a sustainable, regenerative and circular bioeconomy that will also have an important role in mitigating EU emissions and reaching climate neutrality in 2050.

Regarding employment, the further development of urban, coastal and rural areas across Europe is expected to lead to the creation of 400,000 new highly skilled jobs by 2035 in the bio-based sector and up to 700,000 by 2050, mostly in these areas.

Regarding the EU bioeconomy turnover trends until 2050, different scenarios exist. In a low growth scenario, the primary production sectors (agriculture, forestry, fisheries) show a stable evolution over time. The food industry is also growing steadily while other traditional biobased sectors (paper, wood production, textiles) continue their decreasing trends in the EU, mainly due to increasing imports from more cost-competitive regions such as China. In a high growth scenario, the primary production sectors also show a stable evolution over time but other sectors are estimated to grow. In this case, the total annual turnover of the EU bi