**3. Balanced reginal economy**

Another a very powerful tool of the economic analysis that has to be mentioned here is the analysis of the national economy by the structure of the national employment. The proportionate number of people employed by different sectors of an economy is based on the productivity of labour in these sectors and the gross

output by each of the sectors. Next step after the employment structure analysis would be the input–output matrices and planned economy, but this is not the initial purpose of the analysis. The employment structure analysis is a very powerful tool for finding bottle necks by productivity in the economy and justification of the investments for the improvement of productivity by sectors of the economy. This tool also is very handy when the economy is not based on the free market money for goods transactions, but goods for goods exchange. For example, if a local community owns a query and this a community in a developing country, then a financial payment will not increase the well-being of the community as much as for example building a school, a hospital or alike.

The employment structure analysis allows to estimate the number of people needed by sectors before the investments in the subsidiary industries are done. Proper investments can be vital for the successful development of the enterprise. Possible fields of investments: education of labour and procurement of the means of production, professional organizations and certification, protection of the industries and provision of supplies of the input materials. It is about trades people in the service of the local community and the enterprise. One of the possible ways to support the local tradesmen is the provision of facilities where the small industries can be successfully located, supported and function. It is very important that financial adjudication services are provided in addition. The European history knows plenty of successful examples of the organization of this type.

From the start it is necessary to decide if unions should take place in the organizational and social life of the future enterprise, should unions be a part of the local regional economy or not. Unions can be a very important factor of labour organization for the purposes of the self-identification and solution of the local problems, problems associated with the labour itself as well as technical problems on the production site [3]. Unions can be the cementing factor for the local community. Unions can keep the moral of the working force high. On the other hand, unions can be a tyrant that will drive the production costs high and force the acceptance by the enterprise of the inefficient solutions in all of the aspects of the industrial organization.

Should there be unions or not is an open question. The modern trend in the global economy and especially in the USA is to avoid unions in the economic life. Such organizations as Walmart succeeded at keeping unions at bay. The managers in the company are trained to counteract any intentions of the creation of the unionized labour. On the other hand, such countries as Germany are very successful at cooperation with the well self-organized labour.

Regardless if this is a unionized or not unionized enterprise, the same problems will arise, and someone has to solve them. If there is no union, bound to the enterprise officials must be appointed. If there is a union, there should be a form of control over its activities that is often even prescribed by the law.

Labour has to be paid and the payments have to be secured. There should be a place where savings can be made. In case of the retirement the retirement payments must be secured and carried out. All these operations often are impossible in the developing countries. In the developed countries the private financial organizations can take over the functions of the state allowing for more financial freedom and allowing for more just redistribution systems. For the developing countries it is the security that is the prime issue. It could be as simple as robbery or complicated as corruption or ill devised financial or taxation policies. Financial institutions located abroad with the accounts for each of the involved in the labour force could be a solution. Of course, the situation is not as simple as this, and many more questions will arise as, for example, what exchange rates and for what currencies should be applied and when exactly and where transfers should be made, or how to ensure that exactly the right recipients are getting the payments at the pay-off.

### *On the Feasibility of the Closed Cycle Local Economy Based on Pyrolysis DOI: http://dx.doi.org/10.5772/intechopen.100230*

It is necessary to remember that one of the prime goals here is the sustainable economic development of the region. An artificial introduction of a local currency can really help a region to accelerate its sustainable growth. It is possible to reduce unnecessary imports substituting them with local products and use currency to buy the stuff that promotes growth. The economic model that helps in this situation is designed to view big agglomerations of population as self-supplying systems with extra import to substitute for the lack of the local resources or production.

A good example would be the idea of steam engine transportation based on the solar energy. For a developing country to buy foreign goods is prohibitively expensive, as these purchases deplete the national stack of currency at the adverse rate of exchange. Thus, imported fuel is too expensive in comparison to a locally produced fuel. The currency spent on the foreign fuel could have been spent on goods promoting sustainable growth. A possible local substitute could be steam produced with the solar power and supplemented with biofuel to keep up the temperature in the kettle on the go.

Naturally, additional questions arise, it is still unclear to what degree it is possible to control the quality of the product produced in a developing country. In the example of the solar and pyrolysis oil run locomotive, who can guarantee the cleanness of the product and who will pay and with what means for a travel with this locomotive. One may wonder, if it is enough just to organize a profitable business to generate the wealth for the local development or a much tighter control will be needed.

An economic policy can be evaluated based on the stack of cash in the possession of different groups in a society. It does not matter how the volume of money is defined. The discourse on the conversion between M1, M2, and M3 money is not a goal of this paper and will be avoided here. Based on the stacks of currency is possible to assess what consumption pattern will exhibit a nation in the short run or what economic policies will bring the nation out of the depression balance. For a local economy this means the predictability of the social impact with the emergency of a new profitable industry.

The same way the rates of the national or reginal inflation can be predicted based on the available stacks of currency. It is possible to imagine that with the high rate of inflation money stacks are being depleted faster than normally and the national speed of currency circulation slows down as everyone is cautious to spend the rest waiting on the events. Thus, inflation dies out much faster, as it is normally predicted.

Back to the development of the local production. The international borrowing definitely can be the source of the necessary capital, but it also will be the source of the local organization. The model under which the local community finds itself facing the foreign financial institutions helps to answer two questions, under the necessary rate of payment on the borrowed capital what salary levels can be achieved by the members of the local labour force. Definitely, according to this pattern of reasoning the wages achieved will be much higher than a competitive wage. Even if the source of capital comes from the local sources, as the local pension fund for example, it still can be regarded as the foreign borrowing for the ease of analysis.

Through the higher wages local investment funds can be accumulated. Saving in the pension funds, local or national, should also be viewed as the local investment funds. Questions concerning local funds and local investments are open questions for discussions, regulations, and choice of the business organization. It is still to decide who has the right and under what conditions to use the funds for the investment purposes.

A similar situation arises if a union takes control over an enterprise or at least plays a very significant part. The questions to be answered how to decide on the

establishment or abolishment of jobs and the rate if payments. It is necessary to lay down what role can play the union in the choice of external partners and the conditions of the contracts. Such contracts can be very beneficial for third parties and can lead to the conflict of interests. It has to be established if the employees have the right to receive a premium paid by the external partners and what would be a bribery. Probably the union must have the right to review these contracts and have the power of veto.

The feasibility of wages can be estimated based on the international rate of financial borrowing. The idea is that the foreign financial institutions find themselves in the free competition and the international interest rate is established [4]. Thus, the flight of the local capital does not make much sense and the local producer is facing the international rate of interest as the result of the international financial situation.
