The Socio-Economic Development of Small and Medium-Sized Towns (SMSTs): Factors, Dominant Profiles and Evolution Patterns

Based on a literature review on territorial development and urban and regional growth, this paper argues that, among the many factors that may influence the development of small and medium-sized towns (SMSTs), geography and institutions count. Following an introduction, section 2 shows that geographic factors exert an influence on the economic development of SMSTs, by the importance of connectivity, or of the position in urban hierarchy. In section 3, we argue that the institutional settings, public policies and regulations impact the socio-economic development profiles of SMSTs. Regarding the local economic dynamics, we propose to explore three main perspectives (section 4). The ‘residential economy’ comprises the activities addressing mainly a local demand of the population. The productive economy is about manufacturing and tertiary productions that can be exported. This economy is strongly affected by international economic change. We emphasize the possibilities of finding SMSTs which are specialised, while others have a diversified profile. Finally, we underline the importance of placing the socio-economic dynamics of SMSTs in relation to knowledge and innovation processes that can become a lever for creation and development of new local potentials.