Circular Economy, the sequel part 2
When I made a tweet on: ‘is it bottom-up or do we need to talk about bottom-based?’, it brought some interesting reflections. In the Netherlands we characterize the change as the “Energetic Society”. People, individuals are not waiting anymore for initiatives by governments or companies, they start their own cooperative company on car-sharing, care, maintenance, energy-suply and other issues. It is the joint feeling of independency that is a hughe driver for these initiatives. Be independent from large companies, like the energy-companies, be independent from unreliable partners (f.i natural gaz supply from Russia) and being independent of the large financial system, that seems to be the collective feeling that brings people together.
Those, mostly local, initiatives strive for self-sufficiency but now they still need the national grid for continious energy-supply and that is the same in many domains. So organize locally, use national partners: it has characteristics of an hybrid situation.
What’s so special on these hybrid situations? Well, they are a sign of change and change needs to outgrow the old system and needs to grow to a mature new system. Let me explain a bit more:
The dominant system in energy is a centralized system: powerplants, national grids and so on. It has advantages: low prices based on scale, reliability and continious quality. It also has disadvantages: dependency, centralized price mechanisms, strongly based on traditional resources (fossil fuels) and uncontrollability for the individual customer.
The new system can be characterized as a decentralized system. This also has some advantages: local producers of energy (sun, wind, geothermal and bio), client as partner in production and consumption, local grids, autonomy. Ofcourse there are also some disadvantages: maintaining continuity in supply, need of new organisation-models and gaining the right quantities in supply.
The actual system is a hybrid solution: use the advantages of both systems, deminishing the disadvantages. One could say that it is like the change in ships: steamvessels (new) with sails (old) in the 19th and early 20th century. By the way: we see this change nowadays appearing again. In the energysystem we see the same movement: from local energyfactories in the early 20th century to a completely centralised system in the early days of the 21th century and now we turn this around again.
The hybrid situation is part of the transition: we use the good elements of the old system to compensate the first failures of the new system. It is all about reliability.
So when a change is dawning from the actual linear economy to a circular economy, we tend to look for hybrid solutions. In the Netherlands there are initiatives to create a ‘Resources Roundabout’. That sounds circular and it has the intention to be the basis of a circular system but we organise it as a new solution for the failures of the ‘old’ linear economy. The name says it already: roundabouts are not intended to change the system of logistics in trafficmanagement, it is just a solution for the vulnerability of the crossroads of lines, roads. It helps traffic streaming more efficiently and safe. Not bad but also not a fundamental change. Maybe in the long term it will evolve or adapt to the new circular system.
The most difficult part of such a transition, from linear to circular, is to find the new ways of wheeling and dealing. What’s new? We see some initatiatives that found a new way: forget ownership of the customer, pay for performance, (collective) ownership of resources, growing attention on services etc. We will need to find more and fundamental solutions in the new, circular, system. That’s what we at OPAi are working on these days: new businessmodels, new valuecreation, new systems solutions and help/advise on implementing of the new, circular, economy in businesses and organisations/institutes.
For the moment we see a lot of hybrid solutions. Don’t worry, that’s a good thing: the existing has value, new values need to be developed and such a transition doesn’t need to be a deadly revolution, better might be the evolutionairy road. I would say, we need a revolutionair evolution. Why revolutionary? Because we need speed. Speed in innovation, new businessmodels, new economic values, new contracts and everything that is part of the new circular economy.