This paper deals with the demographic and socio‐economic development in the Archipelago Sea Region in southwestern Finland in recent decades. The most important finding is that the region has fared rather well during recent decades, even during the first half of the 1990s, when the rest of Finland was hit by a severe economic crisis. Two factors seem to have influenced the relatively favourable development in the archipelago. On the one hand, the region has specific cultural, social and economic traditions that have enabled it to adapt to new challenges; and on the other hand, certain welfare, regional and other policies seem to have favoured the region to some extent. A general conclusion from the study is that there is a need for a broader theory of rural development than those theories currently being used. The most important feature of such a theory would be its use in providing general interpretations of regional development, even if each region has completely different economic foundations and its own development logic.