The OECD functional urban area definition
As a response to this challenge, the OECD, in collaboration with the EC, has developed a new approach for classifying functional urban areas with the aim of comparing the key functional areas among OECD countries in terms of economic activity. These metropolitan regions are made up of both urban and rural territory. By applying a uniform definition and criteria, international comparability is assured and monitoring and comparing urban development within and across OECD countries is enhanced (see Box 1.3 and Annex 1.A3). It also differentiates functional urban areas of different sizes, providing new tools for better understanding urban dynamics for different sized metropolitan regions. This work is developing at a time when the urban agenda is at the heart of policy debate in many OECD countries. Thus, redefining what is urban responds to a need of governments for evidence to design better policies for different types of urban areas (OECD, 2012).
According to the functional urban area (FUA) definition, there are 26 FUAs in Chile, home to 12.1 million inhabitants in 2010 corresponding to 73.2% of the national population. This leaves 26.8% of the population outside a major urban area. When comparing this figure to that of other OECD member countries, Chile has a higher metropolitan share than the OECD average, only surpassed by Korea, Luxemburg, Turkey, Japan, the United Kingdom and the Netherlands.
Box 1.3. Methodology for defining functional urban areas
The OECD-EU identifies functional urban areas (FUAs) beyond city boundaries, to reflect the economic geography of where people live and work. Functional urban areas are relatively self- contained economic units, characterised by high levels of labour linkages and other economic interactions. Cities are widely accepted as important generators of wealth, employment and productivity gains. Moreover, large agglomerations are key players of transnational flows and work as essential spatial nodes of the global economy. Thus, often metropolitan areas are essential interconnected units in the global economy.
Defining urban areas as functional economic units can better guide the way national and city governments plan infrastructure, transport, housing and schools, space for culture and recreation. Improved planning will make these urban areas more competitive to support job creation, and more attractive for its residents.
The methodology identifies urban areas as functional economic units, characterised by densely inhabited “urban cores” and “hinterlands” whose labour market is highly integrated with the “cores”. This methodology is a clear example of how geographic/morphologic information from geographic sources and census data can be used together to get a better understanding of how urbanisation develops. Information on the distribution of the population at a fine level of spatial disaggregation - 1 km2 - are used to identify more precisely the centres or “cores” of the urban space, defined as contiguous aggregations (“urban clusters”) of highly densely inhabited areas (grid cells). The hinterlands of these internationally comparable urban cores are defined using information on commuting flows from the surrounding regions.
Such a definition is applied to 30 OECD countries and identifies 1 179 functional urban areas with at least 50 000 inhabitants. Functional urban areas have been identified beyond their administrative boundaries in 30 OECD countries. They are characterised by densely populated urban cores and hinterlands with high levels of commuting towards the urban cores. The share of national population in FUAs ranges from 87% in Korea to less than 40% in Slovenia and the Slovak Republic.
Box 1.3. Methodology for defining functional urban areas (cont.) Percent of national population living in functional urban areas, 2012
Source: OECD (2013), OECD Regions at a Glance 2013, OECD Publishing, Paris, http://dx.doi.org/10.l787/reg glance-2013-en.
Among the 1 179 OECD functional urban areas, 77 have more than 1.5 million people, 198 between 500 000 and 1.5 million people, both groups concentrate almost 75% of the total urban population. Additionally, 406 were identified between 200 000 and 500 000 people, and 498 are small functional urban areas with a population below 200 000 and above 50 000 people (see figure below).
Number of functional urban areas (FUA) and population share by FUA size, 2012
Source: OECD (2013), “Metropolitan regions”, OECD Regional Statistics (database),
http://dx.doi.org/10.1787/data-00531-en (accessed on 15 December 2013).
Figure 1.2. Location of functional urban areas in Chile
Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.
Source: OECD (2013), OECD Urban Policy Reviews: Chile 2013, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264191808-en.
The FUA definition and the OECD regional taxonomy are based on two different methodologies and measure different realties: the former captures the integration of urban and rural territories into a single local labour market based on commuting patterns. It includes both an urban core and a peri-urban hinterland containing strong urban and rural interactions. By contrast, the regional taxonomy is based on administrative boundaries and captures the wider context in which urban and rural development takes place. Predominantly rural regions can contain urban cores if the share of the population living outside the urban cores exceeds 50%. Each definition conveys different information.
Despite the different dimensions that both OECD definitions measure, the share of the national population living in rural areas differs significantly to the figure provided in Chile’s official definition (see Table 1.3).
For the case of Chile, the current official definition delimiting urban and rural areas could benefit from some of these recent advancements and better capture the urban and rural realities, recognise and define areas with strong urban and rural interactions, and differentiate among different types of rural areas for the case of Chile. These are discussed in the next section.
Table 1.2. Functional urban areas in OECD member countries
Source: Based on OECD (2013), Redefining "Urban”: A New Way to Measure Metropolitan Areas, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264174108-en.
Table 1.3. Share of the national population in Chile living in rural areas, 2012
Note: The FUA figure does not include the share of rural population in FUAs, therefore it underestimates the total rural population.