Innovation Models in the New Space Economy

The circular economy (CE) is a popular concept in the European Union (EU) space, which has been the subject of numerous research and substantiation activities. In the last years, there has been a growing interest in Romania regarding the characteristics of this new economic model and the principles on which it works. Referring to Romanian specialized literature currently available regarding the submitted topic, we consider that the theoretical part is insufficiently structured. In addition, by pointing out the applicability of the circular economy in Romanian space, we consider this to be represented mainly by the fragility of its effective and practical implementation. The examples of Romanian successes in the field of circular economy are limited, a fact that can be explained—from our perspective—through the aspect that in other EU countries, the process of development of CE has some precedents, a stronger background and a ”self-constructed” history in the topic. There is undoubtedly a necessity for adopting this new economic model, considering that, for the most part, Romanian economy is still dependent on the linear economic system. Starting from these arguments, the proposed article uses a thematic debate of the notion of circular economy, presenting, at the beginning, an incursion into the predominantly European variety of theoretical approaches. The selection of definitions and conceptualization is continued with an analysis of the stage of implementation of CE in Romania. The purpose of this approach is to investigate a niche identified in the Romanian space, not covered in the specialized scientific research and to expose the specificity of the process of transition of Romania to a circular economy, of the barriers encountered—namely, the problem related to the attitude and mentality regarding this new concept. We also point out that the intention of the study is to integrate a ”different” contemporary and very current economic concept into a real economy, and at the same time, to increase the visibility of its application at the level of a member country of the EU. The challenges encountered in the context of the increasingly present tendency in Romania of assimilating and complying with the precepts of the circular economy are also detailed, proposing, at the end of the study suggestions for improving the gaps identified at this level. The most realistic implementation of the circular model in Romania represents a qualitative plus for the human-society factor, as well as for the environment. In conclusion, we note that, despite the evolution of the number of theoretical approaches and concerns, the field of circular economy and the perspectives it proposes, continues to offer a favorable ground for further research.

On Economic Space notion

In 1926 K.E. Tsiolkovsky presented sixteen points of a long-term plan in his scientific work. They reflect his forty years of philosophic, scientific, practical, creative work, and reveal the strategic goal of «The Happiness of Mankind in the Universe», as well as fill the space project with the content. The project identifies stages, timeframe, resources and intermediate goals, it also foresees a number of events that have already occurred. K.E. Tsiolkovsky’s space project is considered to be a science-based target document for strategic planning, and the date it was officially published is presumed to be the beginning of the space age. The task to evaluate the feasibility of K.E. Tsiolkovsky's space project remains relevant. The first-ever space project has predetermined the development of life in space as well as a new sphere of human activity to be emerged that is space economy with the earth's global economy included. At the present stage, the space economy has acquired the features of the global economy and is involved in organizational and economic mechanisms to be evolved to meet public and private needs, the humanity’s needs. Therefore, the task of vital importance is to transfer space activities into the sphere of economy, business, and social life based on a widespread utilization (operation) of space production facilities, such as «space-based machines», «space workshop», «space plant» and «unique scientific space laboratory». The creation of optimal conditions and the effective management of space activities in Russia are considered with reference to developing a Unified Automated System for managing space activities and a possibility of using IT technologies and digital economy elements, so the task of developing a Unified Economic Model for managing space activities is relevant. The space economy is the only way to make the transition from limited resources on the Earth to limitless resources in the space in order to meet the humanity’s ever-growing needs as well as to do the systematic development of K.E. Tsiolkovsky's ideas.

This paper presents further development of our economic model (see Part I). We describe economic and financial transactions between agents as factors that define evolution of economic variables. We show that change of risk ratings of agents as their coordinates on economic space due to their economic activity or other reasons induce flows of economic transactions that contribute significantly to macroeconomic evolution. Transactions are made under numerous expectations of agents and agents establish their expectations on base of economic variables, transactions, other factors that impact economic evolution. We argue that economic value of expectations should be regarded proportionally to economic value of transactions made under these expectations. We describe transition from modeling transactions and expectations of separate agents to description of density functions of transactions and expectations on economic space. We derive systems of equations that describe density functions of transactions, expectations and their flows. We explain how transactions and expectations determine asset pricing and derive price equations. In Part III we use our model equations on economic variables, transactions, expectations and their flows for description of particular economic problems.

Economic theory has generally acknowledged the role that institutions have in shaping economic space. The distinction, however, between physical and institutional descriptions of economic activity has not received adequate attention within the mainstream paradigm. In this paper I show how a proper distinction between the physical and institutional space in economic models will help clarify the concept of externality and provide a better interpretation of the relationship between externality and nonconvexity. I argue that within the Arrow-Debreu framework externality should be viewed as incongruence between the physical and institutional descriptions of the economic space. I also argue that, contrary to conventional wisdom, detrimental externality has no special association with nonconvexity. Starrett's (1972) fundamental nonconvexity has to do with the specific institutional structure of Arrow markets rather than the detrimental nature of externality. Indeed, Arrow markets may not eliminate externalities. In a similar vein, it is not detrimental externality, however intense, that causes the production possibility set to become nonconvex, as argued by Baumol and Bradford (1972), but the particular interpretation of intensity that would make even conventional production possibility sets nonconvex. These points become apparent when one distinguishes between the convexity of the physical and institutional production sets.

Methods. The results of the study were obtained using general and special methods and scientific approaches, namely: methods of abstraction and comparison, economic-statistical and logical-analytical analysis – to diagnose and assess global investment flows and foreign direct investment in Ukraine; methods of mathematical statistics – for factor analysis of the dependence of changes in GDP in the country on changes in PPI; method of theoretical generalization – to justify the choice of mechanisms for attracting foreign investors and intensify investment activities. Results. A thorough analysis of global investment trends, methods and mechanisms of attracting foreign direct investment to the country was conducted. The nature of trends in global investment flows and types of investment clusters created within the world economy is established. The experience is considered of stimulating foreign investors of Invest in Lithuania, an agency for promoting foreign investment in Lithuania, which is a benchmark in Europe due to its professionalism and organization. Investment flows in Ukraine are analyzed, key problems, challenges and risks of Ukraine’s investment policy to attract foreign direct investment are identified. It is established that, in contrast to global trends, foreign direct investment in Ukraine has not become a significant factor in Ukraine’s economic development, which is confirmed by the lack of correlation between changes in GDP and changes in FDI. It is proved that in the post-war economy FDI will become a driver of economic growth in the context of a new economic model, integrated into the Western and world political and economic space, yet focused on national interests. A set of instruments and mechanisms to encourage foreign investors to participate in developing the country’s economic potential in the post-war period is highlighted; they take into account the specifics of the national economy and meet the strategy of economic revival of Ukraine. Novelty. Effective mechanisms for implementing Ukraine’s state investment policy to stimulate foreign direct investment in the post-war economy are proposed, which take into account global investment trends and best practices in stimulating foreign investors. Practical value. It consists in developing proposals for using tools and mechanisms to attract foreign investors, considering the specifics of the post-war economy of Ukraine. The findings and results of the study will help to build the country’s investment potential, restore the destroyed national economy and create a strong economy.

Economic theory has generally akcnowledged the role that institutions have in shaping economic space. The distinction however between physical and institutional descriptions of economic activity has not received adequate attention within the mainstream paradigm. In this paper I show how a proper distinction between the physical and institutional space in economic models will help clarify the concept of and provide a better interpretation of the relationship between and nonconvexity. I argue that within the Arrow-Debreu framework should be viewed as incongruence between the physical and institutional descriptions of the economic space. Accordingly the only consistent characterisation of is to view it as synonymous with missing or missing property rights. All that distinguishes a conventional commodity from an is the extent to which a market exists for the good in question. The common expression markets for externalities is misleading since it tends to imply that there is more to than simply the non-existence of a market. It is most likely the result of confounding certain kinds of jointness in production with externality. I also argue that contrary to conventional wisdom, detrimental has no special association with nonconvexity. Starrett's (1972) fundamental nonconvexity has to do with the specific institutional structure of Arrow rather than the detrimental nature of externality. Indeed, Arrow will not in general eliminate externalities. In a similar vein it is not detrimental externality, however intense, that causes the production possibility set to become nonconvex as argued by Baumol and Bradford (1972), but the particular interpretation of intensity that would make even conventional production possibility sets nonconvex. These points become apparent when one distinguishes between the convexity of the physical and institutional production sets. An understanding that externality is purely an institutional construct will assist in a proper appraisal of the critical economic function of institutions.

Topicality. The current change in the ideology of forest management in Ukraine towards sustainable spatial development of forestry is due to the promising importance of ecosystem, economic and social values of forest resources, their multifunctional and intersectoral nature of the use of resource and ecological potential of forests, as well as the growing needs of society regarding the quality of the natural environment. Structural negative changes taking place in the forest sector during the transformation of the economy focus on the problem of sustainable spatial forestry. In particular, the restructuring of forest ownership forms, fiscal policy in the sector, forest management functions and integrated multi-purpose forest use are not consistent with the requirements of sustainable spatial development and a market-oriented model of forestry economics. More active implementation of institutional, ecological and economic, organizational and managerial mechanisms for ensuring sustainable spatial forestry requires conceptual and methodological reflection on the spatial approach to forestry.Aim and tasks. The purpose of the article is deepening the conceptual and methodological principles of sustainable spatial forestry in the context of modern environmental and economic problems of rational use of forest resource potential. Conceptually-methodological understanding of forestry requires: the disclosure of the substantive content of the spatial forestry; definition of features of formation and development of forest management; formation of criteria (classification) signs of the forestry space.Research results. The conceptual and methodological basis for the formation of forestry space is proposed in order to ensure sustainable development of the forestry complex. The basic economic-organizational principles of spatial development of forestry systems are considered. The content basis of sustainable forest management, in contrast to the forestry (in the broad sense), includes a wider range of organizational and technological components of forest-ecological, environmental, economic and social trends that are associated with sustainable use and the reproduction of forest resource potential and forestry space. Forestry space represents a combination of components of forest resource potential and socio-economic environment within a certain forestry region with their links and diverse relationships that are necessary for the sustainable development of society. The natural, informational, economic, financial, and intellectual components of forestry complement the institutional, which outline the legal norms for forest management. Forestry within the understanding of forestry space includes aspects of socio-ecological and economic equilibrium of forestry systems of different hierarchical levels of the organization.Conclusion. Research of the economic space of forestry goes beyond the substantive basis of the forestry economy, the theoretical and methodological basis of the regional economy, therefore, there is a problem of the formation of a new direction in the implementation of sustainable spatial forestry, which requires the consolidation of research into a coherent whole. It is the formation and development of an environmentally balanced, economic forestry space that is a prerequisite for rational use, reproduction and conservation of forest resource potential on an ecosystem basis.

Introduction. At present, the understanding that the solution of economic problems facing Russia cannot be based on standard economic approaches and models. It is gradually becoming obvious that attention to the spatial and historical features of the development of the Russian economy has not only academic interest, but also quite obvious practical significance. This can be proved on historical, or more precisely, historical and economic material. In fact, the theory of logic, taken broadly, is based on this. The development of transport and versatile tool to reduce the adverse impacts of space on the eco-economy, physical space turns into economic. The lack of transport connectivity of territories devalues the space of the economy (economic space) to a physical or geographical space. The purpose of the article is to show the role of the city of Saint Petersburg in the economic space of the North-West (understood as Saint Petersburg, Saint Petersburg, Novgorod, Pskov provinces) and Russia as a whole, through the development of railway transport in a concrete historical way. Materials and Methods. The historical method is used as the main method. In Russia, the spatial analysis method is almost mandatory, and it is also applied in this article. This method has been widely used in economic history, particularly in the study of transport. At the same time, we recognize the existence of research methods and techniques that are not suitable for this work, for example, the practice of economic and demographic analysis, especially in the neo-Malthusian version. The authors involve in the analysis the works of Russian and foreign scientists on the topic of the article. Results. The article shows the role of the city of Saint Petersburg as an economic and transport center taken in historical dynamics. The role of an important but single transport center in the economic development of Russia is revealed. The thesis is proved that the optimal choice of reference points for economic development has a positive impact on the development of the economic space of the entire country. Discussion and Conclusion. The article proves that the spatial scale of Russia contributes to the fact that the financial results of economic activity can be localized at a significant distance from the place of economic activity.

ABSTRACTThis paper elucidates which agglomeration patterns exist in two‐dimensional economic space and how such patterns appear stably. Hexagonal lattices, that with and that without a boundary, are advanced, respectively, as practical and theoretical spatial platforms of economic activities. Agglomeration patterns on these lattices include hexagons in central place theory, but also encompass megalopolis and racetrack‐shaped decentralization. As the transport cost decreases, stable economic agglomeration undergoes the formation of the smallest hexagon and transition to patterns with larger market areas, often undergoing downtown decay but finally leading to a megalopolis. Formulas for break points are provided in an economic geography model.

Interregional integration is the most important property and form of manifestation of the unity of any economic space, in particular Russian. The study of this phenomenon is a significant area of research on the spatial development of the country. In the article the historical preconditions of the used approaches based on the theory of economic equilibrium have been studied and systematized. We have described and analyzed various forms of spatial economic equilibrium which are adequate to the modern level of development and mathematical representation of economy. The development of the concept of economic equilibrium in economic and mathematical models is presented. It is shown that the simplicity of the mathematical structure of the OMIOM allows, using all the concepts of economic equilibrium, to analyze the features of interregional economic interactions and assess the degree of economic interdependence of the regions of Russia. The economic space in the OMIOM is presented discretely, in the context of macro-regions, which are federal districts or their large fragments, uniting several subjects of the federation. The economy of each macroregion is presented in the context of the aggregated sectors of production of goods and services. For sectors with transportable products, interregional transport and economic ties are taken into account.

Policy model for space economy infrastructure

Space economy is determined by the interaction between markets and the mobility of production factors. Capital and labor mobility affects the functioning of the product and labor markets in the regions of origin and destination. This feeds back into the earnings of production factor owners and changes the incentives to move through the modification of demand levels in both regions. In this paper, we build a model with two regions and two production factors, labor and capital, à laTabuchi-Helpman in order to embody both capital and labor mobility in a unique model. Considering the conditions for agglomeration and dispersion to arise, we show that the features of the labor market are a key parameter along with well-known trade costs. The results show that, depending on labor market conditions, the industry and the population display a smooth bell-shaped curve of spatial development. Dispersion prevails when trade costs are either high or low, while agglomeration occurs in between. Market integration and factor mobility exacerbate regional disparities.

Piecemeal approaches to river basin development and management may not fully recognize the interactions and interdependence among components of a river basin system. River basin management that focuses on a single water use, on a single sector, or on the supply to particular segment of the basin population may inadvertently disrupt other sectors of the economy (in time or space). Hence, advocating for a systems approach to river basin development - for models that could help account for a river basin's key components and help address various objectives. The authors review the literature on such economic models, including models that deal with issues of water quality and quantity or with environmental considerations, recreational demand, countrywide planning, and multiple objective planning. Their review may serve as a source of references for those who need to consider whether they can use a model. Readers can evaluate the suitability, advantages, and disadvantages of particular modeling approaches for specific objectives.

In the context of ecological civilization, China traditional regional economic growth model should be changed into the pattern which is helpful to save resources and protect ecological environment. Paper analyzes the motivation and purpose of the change, and then proposes that the effective approaches of achieving regional economic growth pattern transformation involve the regional production element structure adjustment, economic performance model transformation and space structure optimization.