Regional Value Added

 

Definition of "Regional Value Added"

Economy → Sustainability → Endogenous Potential → Product and Service Chains

The term "regional value added" is originally used as an economic term and is defined as the difference between the total revenues of the factors of production located in a specific region and their total purchases. In recent years, the term has also been also used with respect to other properties of sustainability within a region. The term is here also used in this latter sense as the additional benefit for a region generated through a sustainable process.

The added value can be composed of:
  • economic benefits: e.g. number of employees and revenues,
  • social benefits: e.g. know-how, networking, education, cultural values, or
  • ecological benefits, i.e., ecosystem services.

Economy → Sustainability → Endogenous Potential → Product and Service Chains

Regional value added is closely linked to the term of "regional sustainable development". Thereby, economic, social and ecological processes are interrelated, and should be considered equally by public and private stakeholders.


Economy → Sustainability → Endogenous Potential → Product and Service Chains

Beispiel Beispiel Beispiel
Water and agricultural products are a natural resource with endogenous potentia, just as well as human skills
(Source: K. Conradin / CIPRA / CIPRA).
Sustainable regional development requires regional innovation ability and the capability of a region to learn and to react flexibly to new challenges. In this regard, the endogenous potential of a region plays an important role for an innovative, sustainable development.
Endogenous potential can be defined as the total of development opportunities in a limited space and time; they include natural resources as well as human skills and social abilities (MÜHLINGHAUS & WÄLTY 2001). Examples for the Alpine regions are:
  • natural resources: water, wood and landscape
  • human skills: agricultural production, handicraft based on traditional/cultural knowledge; these skills differ from region to region.
  • regional identity: identification with the region people live and/or work in creates the motivation to become involved in the region's activities.

To increase the added value of alpine regions based on the endogenous potential, it is necessary to mobilise the resources and to build up valuable product and service chains within the region.


Economy → Sustainability → Endogenous Potential → Product and Service Chains

To increase the added value of alpine regions based on the endogenous potential, it is necessary to mobilise the resources and to build up valuable product and service chains within the region.
Yet, the use of endogenous resources is only one necessary criteria, but not sufficient by itself - all resources must be regarded in a holistic and sustainable way. The extraction of raw materials, as an example, presents significant environmental problems, even though their utilisation creates regional value added.

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Further Readings & Links

BUSER (2005)
Regional economic cycles and regional growth policy. A Doctoral Thesis at the Swiss Federal Technical Institute of Technology in Zurich dealing with economic development in the Swiss Alpine Region.

CENSIS (2002)
Il valore della montagna: This synthesis report presents the research results of Censis concerning the capacities of the individual mountaineous territories in Italy to contribute to the gross domestic product (in Italian).