Photo: Miia Itänen

Suggested policy action for smart adaptation

This policy brief presents action points for seven policy areas for smart adaptation to population shrinkage in the Nordic region. The policy action points are based on a series of eleven workshops bringing together municipal, regional and national planners, rural development officials, policymakers and experts from Sweden, Finland, Norway, Iceland and Denmark. The discussions were aimed at informing policy recommendations and culminated in an onsite Nordic workshop. While the project did not identify established or tested cohesive smart adaptation strategies

With the exception of the Regional Strategic Programme of North Karelia 2022-2025, which has adopted a smart adaptation approach: https://pohjois-karjala.fi/wp-content/uploads/2023/02/Brochure-POKAT2025-21x21-web.pdf

, the policy action points offer valuable insights for exploring future adaptive pathways to population shrinkage in the Nordic Region and beyond.

Reframing the narrative on shrinkage
Developing knowledge on shrinkage, demographic changes and their effects
Communicative planning and the benefits of being small
Social infrastructure and land use planning
Multi-level governance and collaborative approaches
Funding for long-term adaptation and future-oriented planning
Policy responses to shrinkage coupled with the green and digital transitions

Photo: Laura Karlin/norden.org

1. Reframing the narrative on shrinkage

Shrinkage is often stigmatised, leading to reluctance to address demographic decline openly. Many municipalities still prioritise policies oriented around population growth, fearing that acknowledgement of population decline will undermine their attractiveness or political support. Shifting the focus from population growth as the key measure of success towards well-being, resilience and quality of life can help municipalities develop forward-looking strategies that align with demographic realities of shrinkage. Municipalities that emphasise the benefits of being small – such as closer-knit communities, greater governance flexibility and easier citizen engagement – can build local confidence in adaptation measures.

Actions for local and regional policymakers:

Acknowledge demographic changes in strategic policies and ensure transparency about the challenges and trade-offs of shrinkage.
Complement mitigation efforts with adaptive solutions that focus on sustaining liveability and economic resilience.
Engage citizens and local stakeholders in cross-sectoral and future-oriented governance to ensure legitimacy and democratic support for adaptation measures.

Actions for national policymakers:

Provide guidance for municipalities and regions on how to integrate smart adaptation into long-term planning.
Support awareness campaigns to normalise discussions around shrinkage and adaptation in public policy.

Photo: Mads Schmidt Rasmussen/norden.org

2. Developing knowledge on shrinkage, demographic changes and their effects

Municipalities often lack the detailed demographic data and comparative insights needed to plan for shrinkage effectively. Strengthening data collection, scenario planning and interdisciplinary collaboration can equip regions and municipalities better to anticipate demographic changes and develop tailored strategies.

Actions for local and regional policymakers:

Improve demographic monitoring and scenario planning at local and regional levels.
Participate in learning networks to exchange insights with other municipalities and regions facing similar challenges.

Actions for national policymakers:

Ensure fine-grained demographic and territorial statistics are readily available to municipalities. Comparative systems and analytical methods across municipal and regional borders are also needed, as shrinkage often has cross-border implications across municipalities and regional boundaries.
Establish cross-municipal data-sharing platforms to enhance knowledge exchange.
Support municipalities and regions in developing expertise in demographic analysis to ensure that data can be better translated into practice.

Photo: Miia Itänen

3. Communicative planning and the benefits of being small

Shrinkage is often framed negatively in public discourse, leading to resistance to adaptation strategies. This can also reduce community engagement and limit opportunities for proactive planning and adaptation. Citizens can also offer important insights on how locations undergoing shrinkage are valued, used and experienced and potential ways forward.

Actions for local and regional policymakers:

Strengthen participatory planning processes to engage residents in shaping and fostering a sense of ownership and pride in local and regional adaptation efforts.
Leverage small-scale advantages, such as community cohesion, quality of life etc.

Actions for national policymakers:

Support capacity-building programmes that train municipalities in effective public engagement and communicative planning.

Photo: Miia Itänen

4. Social infrastructure and land use planning

Many shrinking municipalities struggle with oversized infrastructure and declining service accessibility, resulting in inefficiencies and financial burdens. At the same time, poorly planned reductions in services can negatively impact quality of life and community cohesion. A strategic approach to land use and service planning – such as multi-functional service hubs and repurposed spaces – can optimise resource allocation while ensuring accessibility is maintained. Investing in public spaces, housing and community facilities helps sustain liveability in shrinking areas.

Actions for local and regional policymakers:

Adapt land-use and infrastructure plans to align with changing population needs.
Invest in multi-functional service hubs that improve accessibility while reducing costs.
Develop strategic housing and public space policies that enhance quality of life.
Map the locally accessible services needed by vulnerable groups living in remote locations, including solutions such as mobility and transport services.

Actions for national policymakers:

Provide funding mechanisms to support municipalities and regions in repurposing infrastructure.
Ensure that national planning frameworks allow flexibility for municipalities and regions to adapt services and land use to demographic realities.

Photo: Miia Itänen

5. Multi-level governance and collaborative approaches

Shrinkage does not align with administrative boundaries, yet municipalities often compete rather than cooperate when it comes to attracting residents and investments. Many also lack the institutional capacity to manage long-term adaptation strategies effectively. Stronger inter-municipal and regional cooperation can improve service efficiency, enhance policy coordination and create economies of scale. National governments play a key role in removing legislative barriers to cooperation and incentivising collaboration.

Actions for local and regional policymakers:

Develop cooperative solutions to share resources, services and administrative capacity at the local and regional level.
Establish joint strategic planning frameworks between municipalities (and regions) to address common challenges.

Actions for national policymakers:

Ensure legislative frameworks that facilitate inter-municipal and regional cooperation, while respecting specific local and regional characteristics and perspectives.
Provide authorities/agencies in charge of regional development with support to help municipalities implement adaptive strategies.

Photo: Elin Cedergren

6. Funding for long-term adaptation and future-oriented planning

Funding mechanisms often prioritise population growth, making it difficult for municipalities to secure financial support for adaptive measures. Flexible funding structures that support adaptation – rather than being tied to growth metrics – can enable municipalities to invest in sustainable solutions. National policies should encourage planning based on long-term scenarios in order to future-proof local development strategies.

Actions for local and regional policymakers:

Ensure local budgets reflect long-term adaptation needs rather than short-term fixes.
Leverage regional cooperation to secure joint funding for shared services and infrastructure.

Actions for national policymakers:

Establish long-term adaptation-oriented funding schemes to support municipalities and regions transitioning away from population growth-based models.
Provide seed funding for Smart Adaptation Living Labs, enabling municipalities to test and implement innovative adaptation strategies at scale.
Ensure national financial equalisation systems consider the specific challenges of shrinking municipalities and regions.

Photo: Miia Itänen

7. Policy responses to shrinkage coupled with the green and digital transitions

Smart adaptation needs to be closely integrated with other significant transitions facing Nordic municipalities and regions today, such as the green and digital transitions. Aligning smart adaptation with sustainable development policies can create synergies that strengthen both initiatives. For example, for those remaining in the shrinking area it can make a significant difference to see that the municipality is actively participating in future-oriented action, even if it is not growth-oriented. Participation in activities related to the green transition and digital transition may also help diversify the job and education possibilities offered in the area. However, smart adaptation aligned with the green and digital transitions depends on an inclusive design and ensuring place-based benefits can be captured.

Actions for local and regional policymakers:

Sustainably leverage local natural resources for local and regional development and explore local-level tax options to retain more benefits from investments and new developments.
Engage in new networks and opportunities related to the green transition to foster a sense of planning for the future

Actions for national policymakers:

Provide guidance and support for municipalities and regions that helps them to integrate smart adaptation with digital and green transitions in their long-term planning.
Promote policies that ensure that local resources better benefit municipalities, enhancing local economic resilience and liveability.
Ensure policies that facilitate inclusive digital connectivity and decentralised employment opportunities, allowing residents to remain in rural areas.