**4. The necessity of the commercialization of the process**

The borrowed capital has to be paid for and paid in the long run. Labour and suppliers have to be paid in the long run. The suitable product has to be found and this product has to be sold for profit in the long run to pay for the contributing factors. Thus, the invention of the sustainable product is the prime aspect of the local economic development.

A sustainable product can be invented based on the regional economic patterns and the outer economic situation. The survival of the local economy will be based on the ability to defend its general industries and to promote the growth of its specialized export industries. The best scenario is when the sectors of the local economy exhibit sustainable proportionate growth and trade deficit is paid by the surplus of the local production.

Investment fonds should not necessarily be of the international nature. Profit from the operations can be redirected towards savings thus creating the investment funds. Savings are generated by both sides of the economy by the businesses and the labour. The created investment funds can be very important for the regional economy as the source for the establishment of the local enterprises. Unions can play a very significant part in this process that should at least in theory promote the business-oriented thinking of the union members. The offspring enterprises can benefit the former labour force and generate even more wealth for the local economy.

Here comes very handy the structure of employment analysis. Investments should manifest themselves in the changing structure of employment of the regional economy especially if the enterprise is dependent on the local resources and the local social climate. The only possibility when investments do not reveal themselves in the changing structure of the local employment is when the investments are done in the capital and the productivity in the sectors is growing equally fast.

The national rate of savings is one of the macroeconomic parameters that describes the performance of the national economy [5]. This parameter can be applied towards the regional economy. This parameter allows to estimate the portion of the national or regional income that goes towards investments. For the analysis of the regional economy this parameter may become especially important if the material or intellectual capital is in big demand and of the imported nature. By readjusting this parameter with the macroeconomic measures, it is possible to meet the financial needs to pay for the necessary imports.

The possible solutions for the readjustment rate of regional savings can be the royalties paid at the exchange of the local currency, local taxation that goes strictly

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

into the investment funds, and all kind of other possible type of royalties. The regional pension funds with their accumulation of funds can play a significant part in this process.

It seemed that the production of electricity deep in Africa is not a sustainable in the long run idea. The empirical results rather were confirming this assertion. This is the experience of the engineers without borders in their efforts to improve the living conditions of peoples of Africa. The local productions for example of solar panels died out first of all due to the poorly understood economic factors. First of all, Engineers Without Borders failed to commercialize the process thus rendering the payments to the providers, labour, and professional stuff not sustainable.

Engineers without borders were not a commercial organization and was not trying to organize a profitable entity in the long run in the first place. One of the reasons it failed to create the sustainable development in the countries of its operations is that it was lacking the will and intelligence to bring the sustainable changes to the local economies.

It is very possible that even when there is the will to commercialize the process the local markets still have to be invented. The situation is straight forward: local resources are not available as no one is selling anything. There are no means of buying something as there are no means of payment in circulation. The same is with the local and international labour, people have to be remunerated for their efforts. Work must provide people with means to sustain their living increasing its standards. With no local markets available the two classical solutions are available: the forced labour camp or the military camp. The first solution means people are forced to work with the bare minimum of supplies, just to sustain their living. In the second case the supplies are shipped from the well-established centers of production and redistribution. The first solution is unacceptable, the second is prohibitively expensive.

The historical solution in the absence of the well-established markets for goods of general consumption in volumes comparable with the national consumption is the process of taxation in real products and assignment. There are plenty of historical examples when whole villages of the peasant population were assigned to certain productions. A classic example would be the early Middle Ages. It does not mean that the peasants have to be the labour force in the production, they can be just the suppliers in goods to provide for the labour, first of all food. For a developing country this solution still can make much sense as the back payments to the population can be made in real goods as medical equipment, building materials or anything alike. To implement this solution in a developed country is rather problematic first of all due to the elaboration of the consumer basket.

Another solution can be borrowed from the Soviet Union. At a certain point the government allowed the sale of the foreign goods to the population for people with the special currency. The system was called Bereska, probably another instance of the national humiliation. To what degree this historical solution can be implemented in the development economics is not quite clear, but the idea is quite promising. It is possible to pay to labour and small suppliers with the nominal records money that can be traded for real high-quality products in the specialized stores. The secondary markets better be tightly controlled or organized or there will be high rate of corruption and criminality. For more details on the criminality spurred by the Western economic aid please read about the recent Somalian history.

The idea of production of electricity in Africa for sales in the European union directly evidently is not a sustainable one. Big production numbers will turn into a trickle by the time they will reach the markets in Europe or elsewhere. Nevertheless, this is the question of sustainability to invent a product suitable for consumption over big distances produced locally. And electricity can still be the one as far as it goes into the product as direct or indirect input. A good example would be coffee

that an item of export to Europe. Through coffee electricity can be sold in the European union indirectly.

Another possibility to sell electricity indirectly is to save energy in the chemical bonds. The chemical production requires input of energy. Solar panels and wind or tidal turbines deliver big quantities of energy, but of coordination with demand. The production process on the contrary can be schedule in accordance. Thus, solar energy can be saved in chemical bonds and sold over big distances. A good example could be the idea to sell clean heating oil to the big agglomerations of population.

If the organization of the local market economy is not possible at least in the short run, the organization of a profitable enterprise and the positive influence on the regional development are still possible. What matters is the agglomeration of physical consumers as the end point of financial transactions. Financial capability of the local population is not so necessary as there could be other means of exchange and redistribution. The main income at least on the initial stages of the new local development will come from abroad. It is still the availability of the local labour and availability of certain local resources that play the crucial role.

Selling to the local population quite often can be a problem as the local markets still have to be organized. Even if there is quite dense local population it still can have zero buying power. Here comes handy the money stack analysis to model the creation of the local markets based on the successful local production. Alternative to the creation of the local markets would be the direct redistribution of the consumer products. The problem is that it pretty much entails the creation of the local planned economy with coverage of the whole consumer basket.

The local markets in the typical African context cannot be defined as sufficient in terms of promotion of local industrial development. It is not so much about the financial unattractiveness of these markets. The financial situation finds its manifestation in the material exchange that the local markets can suggest in return for the produced industrial goods. Historically this is exactly how it went on, the parallel development of the agricultural und the industrial sectors of the economy. The main problem is time that was necessary to put together the accidental factors. It took literally centuries, if not longer.

On the other hand, the autonomous development of the local markets is still possible. Again, the example of Newfoundland, it a province in a well-developed western country. Local markets are small, but financially sound. By means of the real exchange economic scenario it is possible to conclude that nothing prohibits the high level of economic/industrial local development. In theory the availability of the local resources should be sufficient for any level of wealth limited only by the level of development of modern technologies.

While the Newfoundland economy is very low on performance the same of Sweeden is quite sound. Both countries are in the northern climate and cannot compete with the rest of the world in the traditional sectors of the economy, like agriculture. Sweeden is flourishing because it can manage its internal sectors of economy and trade with the rest of the world with specialized goods.

A good theoretical question if any local product in surplus can be used as a specialized product for the international trade. The best approach would be to consider is the saturation of the global markets with this product and the possibility of the stagnation of prices for the product by the immediate neighbors in case of the high volumes being supplied [6].

Sweden retained its internal markets even under the new socialist system. This allows for the local development. Investments in the local economy pay off. In case of the developing countries the absence of the well-developed local markets is a big problem. A newly established enterprise should orient itself towards the external markets and something should be improvised for the local situation.

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

From the historical perspective Sweden was undergoing its pro-socialist transformation at the times when the global competition was not as acute as it is now. By the time of its great changes Sweden was already one of the world most developed countries. Sweden could preserve its economic institutions and develop further. In case of the developing countries the situation can go as bad as no markets for goods for money at all are in existence. What comes very handy is the structure of employment analysis and general planned economy. Good question if it is still possible over a short period of time to nurture the more efficient free market and monetary circulation by introduction of financial payments for labour and suppliers at the newly established enterprises. For example, buying food from the local population, and the local population can get high quality import goods in the specialized stores.

This is where the Engineers without Borders failed by not being able to create long lasting impact on the societies in question. Everything was falling apart after they were leaving. No mechanisms of perpetual maintenance and improvement were introduced.

The USA government followed the same line of reasoning trying to bring industries to the less advanced countries. The well-known to the public cases so far were not very successful. One of them to mention is some operations in the T-shirts production. One enterprise was placed in Vietnam. The main problem with this placement was that the only operation left to the enterprise in Vietnam was earning literally pennies leaving the workers with the wages way below any international standards.

A sustainable product must have the ability to be sold and produced in the long run. In the production process the producer and the working force must feel themselves motivated. The product must be environmentally friendly, face the continuous supply of raw materials, and the enterprise be able to find and educate professional working force. What else must be packed in the definition of the sustainable product is open for further discussions.

The Engineers Without Borders the same way as many other economic powers like international corporations did not manage to create the sustainable product first that would contribute to the continuation of the local production. Like solar panel projects that led nowhere. No one even cared to establish the mechanisms of the economic exchange keeping the production cycle running.

Do not say never ever will happen to transport energy from Africa to Europe. How about producing biofuels, energy can be saved in the carbon chemical ties and brought to the consumer. How about an even more devilish plan? The locally produced in Africa energy will come to Europe as coffee. No one suggests burning coffee beams in furnaces like fuel but drinking it. The idea is the substitution of products, stop bringing low quality fossil fuels from abroad, produce local electric power, produce local heating oil for power plants and for engines, locomotives, heat up with solar, maintain the temperature with the heating oil.

And again, about the USA industrial history. In the second half of the XXs century pretty much all the innovations in the agricultural sector were invented and tested by the research institutes run by the USA government. What makes it to believe that the lack of the local technological development is not justified on the grounds of the lack of the economic exchange markets and the protection of property. In the States the level of the economic development is much higher than in the developing countries, especially in the countries to the south of the European Union. Normally countries do not have the luxury to enjoy the privilege of continuous funding for the research and development purposes. To sustain the sustainable growth the sustainable investments in the research and development is necessary. The best way to achieve it is to build a sustainable industry that can pay for this development and test of the new technical solutions in praxis.

Through the creation of the sustainable product the local markets are getting the chance of incorporation into the global economy. At the same time the local markets must have the protection mechanisms that will ensure the existence of the local industries. The state of affairs of the local peasants being forced to the natural economy is not an example of the well protected local economy, but rather of its defeat.

Without making investments in a technology all the dreams about the implementation of the technology will remain just a dream. For any investments to take place the technology has to be financially attractive. The implementation financed by the state is not a great solution as it exists only as far as there is funding. The task of an engineer is to improve the technology reducing costs up to the point where it is cheap enough to compete with alternatives. If it does not work, it does not mean that this is the end of the application of the technology. There are plenty of neighboring factors that should be considered. Quite often the whole technology should be revised. Production with the technology requires inputs, has side effects, and produces products. The implementation of the technology should be reviewed on all the stages of the production process.

Speaking about inputs it is necessary to keep in mind that there are all kinds of them. There are inputs during the construction and maintenance of the production process, and inputs that are used to create the product itself. When it comes to practice, the difference in approach is evident. The initial inputs are the ones that often are taken out of consideration during the readjustment process.

On the financial side of the analysis inputs are the costs that will be put against the cash flow generated by the sales of the products created with the inputs. It is possible to minimize the expenditures on the inputs, on the waste handling and to increase the revenue per unit of sales. With the growing costs of inputs and the price of disposal of waste the avoidance of waste is picking up in importance. It happens that the byproduct of production can be the most revenue generating seller.

Smart industrial organization can play the vital role in the development of the relations with the labour involved and the local population. The proposed idea is the idea of the industrial farming. In the case of the local energy production this idea would be called the energy harvesting farming. The idea is to try to avoid using mega plants and rely more on small production units operated half independently by the local population at the site. This organization creates the positive attitude towards the production in question as it makes people feel more like the proprietors than the exploited colonial labour. The not interested population as isolated islands can be simply circumvented without much damage to the production as a whole.

Historically the cottage economy did not survive the competition against the fast-growing agglomerating companies. It does not mean though that with the modern industrial organization the idea has no future. Many big corporations build their operations on franchising. The organizing authority will deal with such problems as securing the suppliers, solving internal disputes, controlling prices and quality of the product, dealing with the side effects and securing the ways of distribution of the product. Other important issues would be optimization of the production and the education of labour.
