The COVID-19 pandemic has negatively impacted consumption and production levels and patterns all over the world. European regions and cities were confronted by the shock of this pandemic at a time when digitisation, the growth of the Knowledge Economy (KE), demographic changes and globalisation have transformed labour markets.

Despite various negative impacts of the pandemic on people’s lives and the functioning of cities and regions, the COVID-19 disruption may result in long-term innovation effects as the digital transition could be accelerated and the provision of digital services has been reinforced. These developments will continue to shape the way people live and work as telework and ICT-based mobile working arrangements may provide more flexibility, job autonomy, improved work-life balance and reduced commuting time. While these shifts can provide new development opportunities for disadvantaged territories, they also have the potential to increase socioeconomic and territorial discrepancies for regions with poor or no broadband access and digital skills.

Regional socioeconomic convergence is the main aim of Cohesion Policy. Post-2020 Cohesion Policy will have to address the socioeconomic and territorial challenges associated with the acceleration of digitisation and the increasing role of the KE.

Against this backdrop, this ESPON policy brief updates the evidence provided in the EMPLOY (Geography of new employment dynamics in Europe) study (ESPON, 2018) and focuses on the effects of the COVID-19 pandemic, and institutional and policy developments dealing with current and future challenges.