The Role of Regional Development Agencies within an Ecosystem in the Circular Transition

Christopher Kronenberg^1,3,* Franziska Nemmer^1**, Stefan Blachfellner^2,3***,

¹University of Applied Sciences BFI Vienna; ²University of Applied Sciences Burgenland, ³Bertalanffy Center for the Study of Systems Science

* [email protected]

** [email protected]

***[email protected]

Summary

In recent years, more and more organizations are focusing on a circular economy rather than the predominant economic models based on a take-make-waste approach. However, despite of great potential for a more sustainable future and support from initiatives and policies such as the European Green Deal, Europe, like most of the rest of the world, is only at the very beginning of the transformation towards more circularity. To achieve a true transformation, it is important to turn away from this linear, firm-centric view in favour of a broader, systems or ecosystem view in which value is being co-created. As an effect, a collaborative approach is needed.

In Austria, regional development agencies play a special role in fostering collaboration and bringing organisations and relevant actors together. They are considered innovation engines and are well connected to the regional and national organisations as well as political and industrial decision makers. As an effect, they are a central element of ecosystems in the promotion and implementation process of circular economy aspects and therefore crucial in orchestrating this transformation process. To learn more about their methods, best practice approaches and challenges, we conduct comparative case studies of four regional development agencies in Austria. We analyse the organisations’ activities, conduct interviews with relevant actors and aim to draw conclusions about its potential for replication and scalability in other regions. In summary, the analysis of the Austrian regional development agencies as experts in connecting economy, science, politics, and society aims to make a further contribution to understand the role of ecosystems in the circular transition.

Extended abstract

Introduction and Problem Description

The goal of the circular economy is to keep resources in use for as long as possible, extracting the maximum value before regenerating them or recovering the resources. This contrasts with the traditional linear economy, in which resources are extracted, used, and then discarded as waste. The circular economy therefore aims to reduce waste and pollution, increase resource efficiency, and create economic growth (Moreau et al., 2017).

The circular economy has its roots in industrial ecology and similar foundations and is as a concept not quite new (Blomsma & Brennan, 2017). Various initiatives and policies, such as the European Green Deal, have been put in place to support the transition, which will highly depend on strategic decisions of both, policy makers and businesses (Lewandowski, 2006), to a circular economy. The European business landscape has made significant progress in implementing circular economy principles in recent years, with more and more companies adopting circular business models. According to a report by the European Commission, the circular economy could bring economic benefits of up to €1.8 trillion per year by 2030 in the EU, and create 2.8 million new jobs (McKinsey, 2015). However, the level of circular businesses in Europe varies across different sectors and countries, but still can be considered as quite low (Circle Economy, 2023).

Previous contributions in the broader field of circular strategy and circular business models often use insights from the traditional literature within these fields. Traditional strategic management as well as business model literature usually adopt a single firm view to understand mainly firm-internal decisions, interests and change management processes. However, this view can be limited for a comprehensive understanding of the business adoption of circular economy principles (Evans et al., 2017). The transformation towards a circular economy requires to move away from this firm-centric view in favour of a broader, systems or ecosystem view in which value is being co-created (Laszlo et al., 2023). Ecosystems, therefore, including their actors, players and networks interact, influence and impact each other to create on a more general level environmental, social but also monetary value and on a more precise level, circular structures. To do so, ecosystems need to consider current sustainable developments and have to adapt their structures, policies and boundaries (Stam, 2015; Audretsch et al., 2019). In addition, the challenges we face in this transition are in size and scale at a point, where a collaborative approach is needed for a successful transformation of the current linear system.

In this context we argue that a successful transition of an ecosystem from a linear to a circular system cannot take place without considering an institutional level (Veyssière et al, 2022). Institutions have been accepted as an essential part of the development of industrial structures and ecosystems (Henrysson and Nuur, 2021). Thus, in this project we investigate the role of regional development agencies in Austria, as a central element of ecosystems in the promotion and implementation process of circular economy aspects within their ecosystem and therefore as a central element in orchestrating this transformation process.

Method and Research Design

Our aim is to get an accurate picture of the role of regional development agencies in Austria in the transformation towards more circularity. Thereby, we want to show which best practice approaches but also challenges exist in the connection of the actors in business, society, institutions, and politics regarding circular economy.

In our research, we conduct comparative case studies of four regional development agencies in Austria and their role in the transition towards more circularity. In this context we explore and compare the regional development agencies, so-called “Standortagenturen” of four Austrian provinces, each of which aims to sustainably strengthen the business and science location of their respective region and provide support for innovative projects.

The following organisations are at the core of our research:

• "Business Agency Burgenland”: Burgenland government’s business agency (Business Agency Burgenland, 2023)

• “Business Upper Austria”: Upper Austrian government’s regional development agency (Business Upper Austria, 2023)

• “WISTO Vorarlberg”: Regional development agency in the Austrian province of Vorarlberg (WISTO, 2023)

• Vienna Business Agency: Regional development agency in the Austrian capital Vienna (Vienna Business Agency, 2023)

These four regional development agencies are representative for business support in Austria and bring together firms, research institutions, and government agencies to promote circular and sustainable innovations. We analyse the organisations’ activities, successes, and challenges, as well as its potential for replication and scalability in other regions. In addition to an analysis of their current offers, projects and funding programmes in relation to sustainability.

Expected Results

We build our research on the assumption that regional development agencies can play an important role in promoting the circular transition by bringing together actors from different sectors and fostering collaboration and innovation. In Austria, the regional development agencies play a special role, as they are the innovation engine and the first point of contact for companies from Austria and abroad. They have a wide network of relevant actors and are well connected to political and industrial decision makers. For this reason, they are ideal objects for our research, and we expect that the projects and solution approaches to be investigated can also be considered best practice approaches beyond Austria. However, more research is needed to understand the specific conditions under which these regional development agencies are most effective, as well as the potential barriers to their success. However, we will also analyse the ownership structures of these regional development agencies and shed light on the role as well as the influence of local political interest groups in the strategy and alignment of these agencies.

Preliminary Conclusions

In order to achieve a meaningful step towards more circularity, it is necessary to look beyond the boundaries of companies and to involve multiple actors. The role of regional development agencies as a nexus of many relevant actors plays a special role in this, as the thematic connection and consolidation of actors is in their DNA. Intensive research is therefore crucial in order to understand their many years of experience in bringing together stakeholders and to find approaches to solutions for the Circular Economy.

This abstract will contribute to the following theme: Track 1.2 Ecosystems in support of sustainability

Keywords

Circular Economy, Regional Development Agencies, Ecosystems, Circular Society, Institutional Level

References

Audretsch, Cunningham, J. A., Kuratko, D. F., Lehmann, E. E. & Menter, M. (2019) Entrepreneurial ecosystems: economic, technological, and societal impacts. Journal of Technology Transfer. 44(2), 313-325.

Blomsma, F. & Brennan, G. (2017) The emergence of circular economy: A new framing around prolonging resource productivity. Journal of Industrial Ecology. 21(3), 603–614.

Business Agency Burgenland (2023) Business Agency Burgenland. Available at: https://wirtschaftsagentur-burgenland.at/ [Accessed 30.01.2023].

Business Upper Austria (2023) Business Upper Austria. Available at: https://www.biz-up.at/en/ [Accessed 27.01.2023].

Circle Economy (2023) The Circularity Gap Report 2023. Available at: https://www.circularity-gap.world/2023 [Accessed 19.01.2023].

Evans, S., Vladimirova, D., Holgado, M., Van Fossen, K., Yang, M., Silva, E. A. & Barlow, C. Y. (2017) Business model innovation for sustainability: Towards a unified perspective for creation of sustainable business models. Business Strategy and the Environment. 26(5), 597–608.

Henrysson, M. & Nuur, C. (2021) The Role of Institutions in Creating Circular Economy Pathways for Regional Development. Journal of Environment & Development. 30(2), 149-171.

Laszlo, A., Huber-Heim, K., Blachfellner, S. & Luksha, P. (2023) Systemic Innovation for Thrivable Cities. In Brears, C. (ed.) The Palgrave Encyclopedia of Urban and Regional Futures. Cham, Palgrave.

Lewandowski, M. (2016). Designing the business models for circular economy – Towards the conceptual framework. Sustainability. 8(43), 1-28.

McKinsey (2015) Europe’s Circular Economy Opportunity. Available at: https://www.mckinsey.com/capabilities/sustainability/our-insights/europes-circular-economy-opportunity [Accessed 26.01.2023]

Moreau, V., Sahakian, M., van Griethuysen, P. & Vuille, F. (2017) Coming Full Circle: Why Social and Institutional Dimensions Matter for the Circular Economy. Journal of Industrial Ecology. 21(3), 497-506.

Stam, E. (2015) Entrepreneurial Ecosystems and Regional Policy: A Sympathetic Critique. European Planning Studies. 23(9), 1759-1769.

Veyssière, S., Laperche, B. & Blanquart, C. (2022) Territorial development process based on the circular economy: a systematic literature review. European Planning Studies. 30(7), 1192-1211.

Vienna Business Agency (2023) Let's talk business. Let's talk Vienna. Available at: https://viennabusinessagency.at/about-us/the-company/organisation/ [Accessed 27.01.2023]

WISTO (2023) Wirtschafts-Standort Vorarlberg GmbH. Available at https://www.wisto.at/en/home/ [Accessed 29.01.2023]