The concept of circular economy is new enough, variety of authors place different sense into this approach, technical issues frequently dominate over economical, finally discrete innovation solutions in tourism business are still too general to become motives and means for business every day actions and sustainable development. The CE innovation was not enough positioned in nowadays World and EU growth challenges, there are no defined connections with EU 2020 strategy for smart, sustainable and inclusive growth, same as in overall system of EU strategic initiatives.
Compilation of existing information in the internet as well as supplied by project partners (mapped in WP3) analysed giving priority rather to Circular economy technical sense and less often to tourism SME’s business innovation support with help of circular economy tools, what is the main subject of project CIRTOINNO.
Necessary for Self-assessment virtual tool (iSAT) creation qualitative scale „Linear – Circular economy” finally not formed for model as “0-1” transition process. CE 1.00 and CE 2.00 mentioned as step towards the Circular economy, but the sense, definition and main clear principle when CE will finally be formed not defined. So, why was occurred necessity to deep into overall scope of CE phenomenon and to define value of maximum circularity.
Fortunately, through extrapolation of CE cultural development trends the final stop of CE was defined by use of EU smart growth concept. Smartness is grounded on highest level of circularity, when previous human or artificial intelligence in self-regulating cycles work as feed-back loops. In nowadays practice of such innovations as smart houses, smart cars, smart devices, etc. fixed highest level of circularity. We named this smart level of CE as CE 3.00. (S. Paulauskas)
WP3 analysis of tourism SME’s business should lead to synthesis of CE principles, solutions and applications, however in current WP3 handbook is very difficult to find solutions and applications acceptable for tourism SME circular economy Self-assessment tool design and implementation principles:
- CE principles. Noted main CE principles as repair and reuse of buildings, rooms and equipment belong to everyday practice of hotels, restaurants and SPA’s, so there is no any novelty for tourism business. Remanufacturing, refurbishing, and recycling contrary are out of tourism service cycle and they should not be applied directly to tourism service business.
- CE solutions and applications. Majority of described practical solutions and applications of circular economy belongs to introduction of remanufacturing, refurbishing and recycling in tourism business principles, and less often about how to innovate everyday work of tourism service providers. Named as good practice applications often are exclusions, and can’t be applied to all tourism service providing SME. Exact innovative equipment and devices available on the market are not presented in the report.
As each innovation cycle, circular economy innovation cycle of tourism SME consists of 4 stages: basic research, applied research, development and commercialisation. Discovered in basic research stage circularity as universal feature of an existence was examined and tried to apply in everyday business as more efficient approach (Fig. 1).
Fig. 1 Tourism SME’s innovation cycle (S. Paulauskas, 2017)
Activities of Project CIRTOINNO are related to Development stage of such cycle, dedicated to preparing of circular approach for practical use in tourism service business, after which the circular approach will come into commercialisation stage.
So, special scope of principles, solutions and applications are required to design iSAT. It should be grounded on business innovation principles and be applicable to each tourism service provider. It should not make complications to businessmen and should not require from them to become researchers and designers. Development of CE in tourism service sector as everywhere should go normally trough recognition and introduction of practical innovative solutions, which lead business to rise profitability, better covering consumer’s demands and increasing wellbeing of a society.
Seeking to create attractive and useful for businessmen self-assessment tool main criteria of such synthesis were recognised as:
- CE as mean for help to rise profitability of tourism SME’s through cut off business expenses by innovations of everyday service.
- All business resources should be introduced in CE sense of tourism SME business which leads to actual business service costs reduction.
- Clear and discretely structured quantifiable circular economy growth scale „0-1“.
- Exact innovative goods, devices, services and other innovations, which are achievable on market now and could be applied into tourism service practice.
- Exact earnings in case of reduction of business costs by activities.
- Navigation of tourism SME’s business service innovation in a market and time.
- Useful achievable knowledge on support of such innovations, implemented in the most acceptable practice for nowadays businessmen: e-reading, e-learning, e-self-assessment and e-advisory forms.
The synthetic approach to tourism SME innovation support and self-assessment tool solutions are presented in this map based on such criteria.
1. Circularity as basic principle of growth
In the second decade of XXI century global economy met challenges of stagnation and slowing down of progress, which indicate reduction of temp of work productivity qualitative growth in many countries. Economic stagnation realises attraction of large communities such as USA, EU, starts decentralisation and destruction processes (Brexit, etc.), activates confrontation between countries, migration flows as well as rises danger for global peace. There is only one civilised way to stop stagnation and destruction – to turn growth of work productivity in accelerating mode by sustainable innovations.
As always, resolution of global economic growth cycle is related to necessary changes in technologies and social relations. At least two social groups of people keep resistance to the progress. Less educated employees and traditional business holders push brakes of progress, because first of them don’t want to lose manual working places and second try to keep own business and income. Neither employees nor businessmen are not directly interested to innovate own business.
Rise of human demands from biogenic to level of health and security required to change Economic paradigm to Sustainable development, which means to consider economic, ecologic and social priorities with responsibility against nowadays and future generations. GDP indicator needs to be replaced by most appropriate full-range life span and happiness index.
Significant component of global economy conflict is energy. Nowadays is evident growth conflict between combusting and not combusting energy technologies. Combusting energy is guilty for negative impact on environment and human health through cancerogenous pollution.
Civilisation is faced with global warming danger, which requires to change overall approach to relations between Humanity and environment.
Faced to stagnation and destruction challenges European Union second decade composes strategic methodologies, programmes and tools, which are targeted to increase growth and competitiveness of EU in global market. The Lisbon strategy for last decade and current European Union strategy EU2020 is targeted to become smart, sustainable and inclusive growing community, which uses innovations as sustainable development engine. These are not buzzwords, because they have deep sense and should be used as methodological tools of growth. However, here is lack of understanding of holistic system and structure of EU growth methodology in qualitative and time scales.
However, the state of Circular economy concept development is draft and partial enough, because it accents only two circles – loops of material and energy resource flow. These loops can’t be excluded from loops of other business resources, like time (human, communication, etc.), finance, legislation, knowledge and other. Practical implementation of CE solutions requires to consider also other business cycles. As an analogy: not a disease, but a person needs to be treated. Circularity is global feature of a Universe, life and business.
1.1. The Circularity as basic principle of economy
Traditionally, a circular economy is a regenerative system in which resource input and waste, emission, and energy leakage are minimised by slowing, closing, and narrowing material and energy loops. This can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling. This is contrast to a linear economy which is a 'take, make, dispose' model of production.
Really, the World is circular and developing system. Everything has the beginning and the end. In time scale a circle is a qualitative leap (Fig. 2). Life is going as qualitative spiral. Circular model of any reality is a virtual Leap. Virtualics is methodology of virtual modelling of reality. (S. Paulauskas)
Linear acceptance of circular world is simplification and reduces opportunities to use it in practice. So, circularity is a measure of efficiency of modelling of reality and practical action. So, as more of circularity, as more reality, as better.
Circular economy as business activity firstly is smart, because it is grounded on feed-back loop activity cycle. Businessman is involved in such cycle as innovator, interested to increase profitability of business. Limiting of CE sense to energy and materials is reduction of growth opportunities. All business resources could and should be reduced according to sense of economic efficiency principle.
Fig. 2. Illustration of circle and its projection in time scale. (S. Paulauskas)
Where: K’(t) – Linear economy quality; K(t) – Circular economy quality, K(t)=1-K’(t)
Deepening into sense of Circular economy gives opportunity to see its internal qualitative loops as historic paradigms of human economic activity (Fig. 3). Circular thinking is cultural phenomenon. As more developed society and person, his ability to expand circularity loops is increasing.
Fig. 3 Circularity expansion loops (S. Paulauskas, 2017)
The historical path from Linear economy to Circular economy goes through steps: Physical, Economical, Environmental (Green), Sustainable and Smart (Fig. 4).