How can we improve sustainability and efficiency when we offer products and services to our citizens within our region? Is it possible to increase the wellbeing of our citizens when we work together starting from the grassroots level? Can a municipality or a city be seen as a partner and an enabler rather than as a regulator?

These are questions that are vital for any public authority to consider as goods and services are designed in the region. It is a necessity to not only create social and economic wellbeing in the region but to also take environmental aspects into account. Normally, this means improvements in energy efficiency or reducing consumption. Sustainable actions might also include local procurement or implementing an environmental management system. As great as these steps are, public authorities will, nevertheless, constantly need to juggle between prioritizing the local economy, social wellbeing and environment. This issue is the most common of hurdles between just talking about sustainable development and actually doing things sustainably.

For a region, the steps that are needed for sustainability involve multiple stakeholders and a seamless cooperation between public, private and third party organizations. One can say that every region is made up of multiple chains that lead to wellbeing for citizens in terms of services, goods and, fundamentally, income. This brings us to the idea that supporting these chains and maximizing their value will lead to greater sustainability while not sacrificing local socio-economic conditions. We like to call this Resource Wisdom value chains.

For especially the many economists out there, the concept of value chains is not a new marvel. Value chain thinking was originally developed by the prestigious Harvard University Professor Michael Porter in the ‘80s. The idea is rather simple: value chains are a set of interrelated activities that a company would use to create value along the supply chain to, more often than not, create a tangible product. In every step of the process, the product in question would increase in value due to the correct procedures that have taken place during each step in the value chain. In very simplified terms, a value chain is an advanced concept to a traditional supply chain where each step is seen more as an ordinary process and meeting purchasers’ requirements.

So how do value chains relate to Resource Wisdom? Though the concept of value chains was originally created to create competitive advantage for companies, the same approach can be transferred to a regional cluster of partners acting in unison for regional competitive advantage and sustainability. The fundamental idea behind this approach is to recognize local synergies that various parties have but are not utilized or even realized.

To describe this in practical steps, it is important to first define the three cornerstone rings in the value chains of regional economies: (1) resources, (2) production/refinement/service design, and (3) end product consumption. Resource Wisdom is to map the value of the resources that a region has. Then we can look at how to maximize their value sustainably. Moreover, who are the key players in the region to create sustainable services, products and organizations? Questions such as these will be answered as the first ring in the value chain is plotted out. Furthermore, as we are moving from the first ring to the second, it is also important to plan the correct extraction and handling of these resources including leaving the extraction area intact for natural resources.

For the second cornerstone ring in the value chain, we need to understand how the available resources are being used. For the production of goods and utility services, efficiency is the key to sustainable practices. How thoroughly are the resources being utilized? Can we discover side streams within the manufacturing system that can be harnessed for additional value? We can also look at the human side of service production. For instance, what are the qualifications and training level of our local human resources to provide excellent recreation or tourism services?

The third and final ring in the value chain is dedicated to the consumer and the grassroots level. This, as the name would suggest, is the level where the products and services meet their end due to their consumption. Or this would at least be the result in traditional upstream-downstream thinking. However, resource wise value chain thinking can also be realized at the end of the lifecycle. A common preferable mindset would be to adjust to the idea that one’s waste is someone else’s resource. Hence, the lifecycle of resources is not a line with a beginning and an end but more like a circle with a start and a restart. Therefore, a grand goal of value chains in Resource Wisdom is to create a circular economy where regions can strive for self-sufficiency and sustainability.

With recognized and developed value chains, regions can now act more sustainably due to increased efficiency and with better understanding of the value of natural and human resources. Ultimately, creating value chains will bring multiple stakeholders closer to each other: researchers, governments, companies, the non-profit sector, citizens etc. With smoother internal operations (think, for instance, logistics, communications, waste management, recreation etc.) and environmental thinking, the region will be more viable, resilient to external changes and competitive on a larger scale. This is the result of value chain thinking as Professor Porter intended – only with a sustainable spin to it!