Building resilient Regions and Cities Brussels, October 10th, 2017 Jerzy Hausner Department of Economics and Public Administration Cracow University of Economics Jerzy Hausner Department of Economics and Public Administration University of Economics in Krakow

The value in a linear economy

A Closed-Circuit Economy

An elegant solution … (by Jonathan Cullen 2017) The circular economy, is a simple elegant concept … ... we take out current linear, take-make-dispose model for industry, and shift it to a circular model. The materials now go round and round, waste is eliminated, and business makes more and money as products get sold over and over again. Resource loops are closed, and econmic development is magically decoupled from environmental impacts. Easy right … if only we had thought of this earlier!!! Perpetual motion ....

… the current reality (by Jonathan Cullen 2017) The circular economy, is a simple elegant concept … ... we take out current linear, take-make-dispose model for industry, and shift it to a circular model. The materials now go round and round, waste is eliminated, and business makes more and money as products get sold over and over again. Resource loops are closed, and econmic development is magically decoupled from environmental impacts. Easy right … if only we had thought of this earlier!!! Perpetual motion ....

Specific characteristics of the Closed-Circuit Economy It is more labour intensive than the raw material exploitation Remuneration is lower on average It is energy intensive The costs are often higher than the economic benefits It is profitable mainly to large corporations The profits gained by one party (in one area) is often due to the loss of another party (in other areas) Economic growth cannot be founded on it as there is not enough waste

Closed-Circuit Economy - Conclusions Occurrence of short and long loops Need to shift from the process design to the system design Linear and closed-circuit economies will co-exists Closed-circuit management mitigates consequences of linear management and opportunistic market game but it does not overcome them Expectations towards closed-circuit economy are exaggerated and naive – it can be the means not the goal And, as all the means, it has to be used with attention and moderation

City circular economy - a special Krakow example What we have so far? Expanded university structure Very high number of students Many off shore business service centres Growing number of relatively well-paid jobs. But still far away from circularity. Exploitation of existing resources, but minor level of their multiplication and improvement

City circular economy - a special Krakow example What we should aim? Missing links of value-creation spiral: Business R+D centres Their collobaration with universities in this area Shared creation of knowledge Better university education – higher human capital Upgrading of manufacturing and service processes Much higher city development potential.

Triple helix – a linear economy perception Public authority Business University + People Źródło: Lombardi 2015

Triple helix – a circular economy perception

A developmental circularity Time dimension appears here Spirality creates new opportunities for operations as the developmental spiral means creating new social relations that have not been observed so far It is not a loop; it is an irreversible developmental change THE DEVELOPMENTAL SPIRAL

Three approaches to time in the Greek thought aion chronos kairos

THE OPEN EYES ECONOMY SUMMIT 14-15 NOVEMBER 2017 ICE KRAKOW