Building More Sustainable Regions: Value Co-Creation Logic (AKA Service Logic)

Today, two types of regional studies are very important to work towards for building more sustainable regions.

(1) Material Flow Analysis

(2) University Economic Impact

To become more sustainable, regions need to work towards circular economies – guided by above studies.

What is a circular economy?  Watch this video…

The logic of leasing over ownership , to improve recycling and value co-creation, is of course well illustrated in Rolls Royce’s “Power By The Hour” concept:

Regions can be viewed as five levels of nested complex systems – universities in cities in states in nations in continents.

To be more sustainable, each level must strengthen local jobs/talent and minimize costly material flows.

The regional logic must shift to rethinking “agriculture and manufacturing as a type of local recycling service” – this is a service logic or value-cocreation logic.

So a fun design for a sustainability summit might include speakers on four key topics:
(1) regional studies on: material flow analysis
(2) regional studies on: university-as-driver-of-regional-economic-impact-and-talent
(3) policy advocates for balancing circular  and import-export regional economies
(4) policy advocates for balancing winner-take-all and improve-weakest-link regional economies

This last item above is needed to accelerate learning between interconnected regions and improve four key measures of regions:
equity (competitive parity)

What are examples of improve-weakest-link policy in the real world today?

(a) Works Pretty Well: NFL Draft
The weakest team each year gets best college player.

(b) Almost Works, But Not Quite: European Union
The richest, most productive nations, give favorable loans to the weakest, least productive nations.

The planet is slowly evolving to interconnect – at all scales – sustainability regions into a nested, networked set of holistic service systems, that accelerate learning (innovativeness), while improving equity (competitive parity) with a focus on long-term sustainability and resilience of regions.
See this paper:

Regions that export natural resources, and then buy back finished products paying a 10x mark up on those goods, are not well-positioned for long-term sustainability.  Regions that export their trash and then buyback products paying a 10x mark up on those goods, are not well-positioned for long-term sustainability.   The export of natural resources and trash, incur energy costs – but more importantly in the long run, they deprive regions of needed knowledge of processes, and the talent/job/future innovations that depend on local knowledge of those processes.

Throughout most of human history, nearly all regions were very sustainable, with minimal human-driven material flows into and out of regions.  In the last two hundred years, the pendulum has swung away from local sustainability towards import-export economies in part driven by specialization (Adam Smith) and comparative advantage (Ricardo), as well as lower transportation and communication costs, but now there is evidence that the pendulum may be swinging back – restoring regions local productive capacities.

Regions that recycle material resources (local processes) and improve human capital (local talent) are well-positioned to link with other like-minded regions to accelerate improvements in measures of  innovativeness, equity (competitive parity), sustainability, and resilience.  Local material and energy supply chains and global information and talent supply chains are evolving globally.