In a world of rapidly changing economic and social dynamics, understanding territorial impact has become essential.
This rich and complex concept plays a crucial role in the sustainable development of territories.
This article defines territorial impact and explores its importance in contemporary society.
What is territorial impact?
Territorial impact can be defined as all the spin-offs generated by an activity or project in a given area. This includes economic, social, fiscal and environmental aspects. The territorial impact approach makes it possible to analyse how the actions of companies, governments and other entities influence the well-being and development of local communities.
Importance of territorial impact
- Economic and social development: Territorial impact is crucial for assessing how local initiatives can stimulate economic development and improve the quality of life of local residents. By measuring the impact of projects on local communities, decision-makers can optimise resources and direct investments more effectively.
For example, knowing the impact that a factory has on a locality can encourage decision-makers to grant subsidies more easily, with the aim of reinforcing this beneficial effect on the community (via job creation, taxes generated, etc.).
- Sustainability and the environment: In the context of climate change and pressure on natural resources, it is vital to understand the environmental impact of companies' activities on the territory. Territorial impact analysis enables us to identify the main sources of carbon emissions linked to a company's activities. This assessment is crucial in helping the company to reduce excessive emissions or, on the contrary, to promote its effective ecological practices.
- Strategic planning: for companies and organisations, territorial impact assessment is a strategic tool for planning and decision-making. It helps to identify opportunities for growth and minimise potential risks. For example, if a company realises that 70% of its expenditure takes place outside its territory or country, it can develop strategies to reduce this rate and thus improve its local territorial impact. The aim of this approach is to strengthen the positive impact of its activities on a given territory.
Case studies and applications
Various case studies show how territorial impact analysis has been used successfully in different contexts. For example, an urban development project can be assessed for its impact on local employment, economic growth and the environment. Similarly, a company can use this analysis to measure the effectiveness of its corporate social responsibility (CSR) initiatives.
Let's take the example of an imaginary hotel group in Malta. With a strong presence on the island, the group has a significant impact on the local economy.
Their network of hotels supports a local purchasing policy, with a large proportion of purchases made within the island, thereby promoting the local economy.
In 2022, the group created thousands of full-time jobs, divided between direct, indirect and induced employment, reflecting its influence on local economies.
Every euro spent in their establishments generates a significant contribution to the wage bill and creates several jobs per hotel per year.
Fiscally, the group contributed a significant amount in 2022, around a percentage of their sales.
These tax contributions and job creation underline the group's key role in the Maltese regional economy.
Territorial impact analysis is fundamental to the modern economy, offering a holistic perspective on the effects of companies and projects on territories. It helps to guide sustainable development, optimise economic and environmental strategies, and strengthen corporate social responsibility. Concrete examples, such as that of the hotel group in Malta, illustrate the importance of this approach to assessing and improving local impact. Territorial impact thus becomes a key indicator for measuring the effective contribution of entities to the well-being and prosperity of local communities.
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