3.1 Opportunities for security of supply, resilience and strengthening the region

Why adopting a circular economy helps secure our quality of life

To ensure high urban quality of life and economic stability in the future, Vienna, as an economic and innovation location, must develop solutions to central challenges such as safeguarding our natural foundations of life, population growth and geopolitical uncertainties.

Key actors in Vienna’s economy include not only the manufacturing sector, the service sector, retail, small and medium-sized enterprises, industry and start-ups, but also employees, the social economy, research institutions, public administration at all levels of government, the social partners and civil society. The economy - that is all of us.

Vienna’s economy is predominantly characterised by services (tertiary sector, around 85 per cent). Only around 15 per cent of gross value added is generated through urban manufacturing (secondary sector), and the primary extraction of resources within the city boundaries is negligible. As a result, Vienna depends to a large extent on raw material imports from the rest of the country, the EU and the global market (see Figure 8).

Resilience through the circular economy

Circular economic practices offer opportunities on several levels. On the one hand, companies are positioned to be resilient in the face of uncertainties along global supply chains, as the circular economy is more strongly oriented towards the reconditioning, reuse and further use of resources that have already been utilised. This results in reduced demand for primary raw materials and products from abroad and decreases the environmental impacts that arise from extraction, production and transport. On the other hand, a well-functioning circular economy strengthens domestic production and service sectors. The increased use of secondary resources generated within the region boosts regional value creation.

These advantages are currently offset by higher costs and by organisational and regulatory hurdles. However, these hurdles apply only to the immediate transition to a circular economy: once the environmental consequences of linear economic practices are factored in, circular alternatives are not more expensive. Organisational hurdles to circular solutions currently arise because processes are still geared towards the linear economy. In the long term, the circular economy is the more meaningful approach, but in the short term it is structurally disadvantaged. The entrepreneurial transformation towards the circular economy can be regarded as successful when economic success and the achievement of social and environmental objectives are mutually reinforcing.

Rooted in the region yet internationally connected, Vienna positions itself as a pioneer and European role model for sustainable, resource-saving, and circular economic practices. As numerous studies on Austria’s labour and economic policies show, none of this is an end in itself. Investments in climate protection, climate adaptation and the circular economy create and secure jobs, ease the pressure on public budgets in the medium term and reduce the cost of living in private households. Technological change offers enormous opportunities in the transition to a circular economy, but it must be actively shaped: for a just and sustainable transformation, technological innovations must go hand in hand with social and organisational innovations.

Cooperation within the metropolitan region

The Vienna metropolitan region, with its diverse business locations and suitable areas, is becoming increasingly important for the provision of products and services compared with Vienna alone. Together, the metropolitan region can strengthen its independence in international competition.

Establishing the circular economy requires a shared understanding of regional economic development that extends beyond Vienna’s provincial borders. This calls for close coordination between political decision-makers, organisations and associations, an attractive range of sites and locations, and good infrastructure within the city.

To expand regional production and market segments in a targeted manner, companies and territorial authorities must work together. The spaces for cooperation differ across the various market segments and supply chains (for example in the food, construction and energy sectors). They range from small-scale cooperation in the immediate urban fringe to the wider metropolitan region (see Figure 9).

Resource exchange and marketplaces (both virtual and physical) for trading regionally generated secondary resources or used materials can only be developed step by step and with the involvement of all relevant stakeholders. The City of Vienna can provide support by working with the stakeholders mentioned to develop a step-by-step strategy and to advance individual pilot projects. Together with industrial operators, manufacturing companies, service providers, logistics operators and even landowners, robust, target-group-specific digital solutions must be developed and integrated into the market. By networking sectors, companies and actors, and by regionalising supply and demand, the circular economy can be successfully established in the Vienna metropolitan region.

Through targeted cooperation with the business community, the City of Vienna and its companies can make use of their role as contracting authorities in the interest of saving resources and of the circular economy. Furthermore, targeted cooperation with socio-economic enterprises (for example repair businesses) generates substantial added value by linking social objectives with environmental priorities.

“The Vienna approach makes the circular economy a driving force behind innovation and growth at Vienna as a business location. Through sustainable resource management, we create jobs, strengthen local companies and make our city fit for the future. The circular economy is an opportunity for a strong economy that brings together environmental protection and quality of life. Now is the time to position Vienna as a pioneer of a sustainable and competitive economy!”

The 10-R principles as a basis for action

Many people still associate the circular economy primarily with waste. Closing resource loops in the sense of classic recycling at the end of a product’s life cycle is, however, only one part of the concept. The 10-R principles describe the various aspects of a comprehensive and ecologically sustainable way of living and doing business.

The 10-R principles guide the development of instruments and measures of the circular economy. Their hierarchical sequence reflects their relative significance. They apply to short-lived products (food, packaging, textiles) as well as to long-lived products and capital goods (infrastructure, buildings).

Refuse, Rethink and Reduce

The first three Rs have the strongest impact and require a fundamental rethinking of our economic and consumption behaviour. On the demand side, this includes questioning the necessity of purchasing products in the first place or pursuing alternative ways of product use (Refuse). Instead of ownership, shared use also moves into focus – for example through sharing rather than individual possession (Rethink). New services help increase the utility of goods that are designed to be circular from the outset (circular design) and produced as efficiently as possible while saving resources (Reduce).

Reuse, Repair, Refurbish, Remanufacture and Repurpose

These five Rs aim to extend the useful life of products at the highest possible value level and offer a wide range of new services. Reusing (Reuse) and repairing (Repair) products play a major role here. Refurbishing older products and bringing them up to date (Refurbish) is just as much a part of this as using intact components either for products with the same functions (Remanufacture) or for products with different functions (Repurpose).

Recycle and Recover

If none of the other Rs are possible, materials should be returned to the material cycle as far as possible through recycling. Unavoidable waste should be used for energy generation (electricity, district heating), as is done for example in waste incineration plants (Recover).