Domagnano

Domagnano occupies San Marino's eastern territory, its flatter terrain making it attractive for the manufacturing and commercial activities that hillside castelli cannot accommodate. The castello demonstrates spatial division of labor within micro-states: tourist attractions concentrate on scenic heights while industry locates where transport and construction are practical. San Marino's manufacturing sector—ceramics, clothing, fabrics, furniture, paints, spirits, tiles, and wine—needs flat land and Italian border access that Domagnano provides. The castello's population growth reflects residential expansion as the republic's 33,000 citizens seek affordable housing away from the historic center. San Marino's economic model transformation—from banking (deposits collapsed from €14B to €5.2B after 2008) to manufacturing and tourism—benefits castelli like Domagnano with industrial capacity. By 2026, EU association agreement could expand market access for Domagnano's manufacturers, currently disadvantaged by customs procedures that Italian competitors avoid.