The Urban-Rural Divide and Regionally Inclusive Growth in the Digital Age

By Christian Kastrop, Dominic Ponattu, Julia Schmidt, and Sylvia Schmidt

Abstract

The current debate on global inequality and social cohesion has also recognized growing differences in living standards between urban and rural areas. This policy brief discusses factors contributing to the urban-rural divide and recommends policies to facilitate the process of catching up. It stresses the megatrends of globalisation and digitalisation in explaining agglomeration in urban areas. Digitalisation and weak connectivity can further exacerbate urban-rural disparities. The policy brief concludes with a set of measures that helps rural areas catch up and contributes to inclusive economic growth. The proposed policies emphasize the need to foster social cohesion in the digital transformation.