Ondernemen in de circulaire economie

Koning Willem-Alexander ontvangt eerste exemplaar rapport ‘Ondernemen in de circulaire economie’

Overstappen op de circulaire economie kan Nederland ruim €7 miljard per jaar en 50.000 nieuwe banen opleveren gaf onderzoek van TNO aan. In het rapport ‘Ondernemen in de circulaire economie’ krijgen ondernemers praktische adviezen hoe zij deze kansen kunnen verzilveren in hun eigen bedrijf. Koning Willem-Alexander nam het rapport op 30 januari 2014 in ontvangst op de nieuwjaarsbijeenkomst van MVO Nederland. Het rapport is een initiatief van OPAi in samenwerking met MVO-Nederland.

Het rapport Ondernemen in de circulaire economie toont bedrijven hoe zij circulair kunnen werken. In de circulaire economie worden producten, componenten en grondstoffen hergebruikt waardoor hun waarde zoveel mogelijk behouden blijft. De schrijvers van het rapport benoemen de keuzemogelijkheden voor ondernemers. Zij zetten vijftien variabelen (KPI’s) op een rij waarop bedrijven kunnen sturen, waarmee zij kringlopen kunnen sluiten en nieuwe product-service combinaties kunnen ontwikkelen. Denk aan: de inkomsten uit verkochte gerepareerde producten vergeleken met de totale inkomsten, de technische levensduur van producten, de mate waarin die ontleedbaar zijn en het gehalte aan toxische stoffen in een product of nodig voor de fabricage daarvan. De aanbevelingen worden geïllustreerd met veel voorbeelden en concreet uitgewerkt voor een onderdeel van de bouwsector.

Waardevolle grondstoffen behouden

Het rapport laat zien ondernemers kunnen inzetten op thema’s als de technische levensduur van producten, hergebruik en omzet uit gerepareerde producten. Al bij het ontwerp van nieuwe producten kunnen zij rekening houden met reparatie en hergebruik. Nu worden veel producten zoals mobiele telefoons als afval afgevoerd, terwijl er nog veel waarde in zit als component of grondstof. In de circulaire economie ontstaan ook nieuwe businessmodellen rond gedeeld gebruik en andere vormen van samenwerking. Voorbeelden hiervan zijn de Smart Meter (smart grid) van Alliander en de samenwerking tussen Waternet en AEB Amsterdam om stoffen terug te winnen uit afvalwater.

Ondernemen in de circulaire economie

partners

Het rapport ‘Ondernemen in de circulaire economie’ is een initiatief van One Planet Architecture institute (OPAi) en kwam tot stand in samenwerking met MVO Nederland. Het rapport werd geschreven door PwC, DRIFT, SITA en OPAi.

Zowel Henk Kamp (minister van Economische Zaken) als Wiebe Draijer (voorzitter van de Sociaal Economische Raad) schreven er een voorwoord bij.
Partners: Rabobank, SITA/Suez Environment, Alliander, Vereniging Nederlandse Chemische Industrie (VNCI), Waternet, AEB Amsterdam, Wereld Natuur Fonds (advies), Ministerie van Economische Zaken, TurnToo (inkind) en Planbureau voor de Leefomgeving (advies). Mede mogelijk gemaakt door de Stichting DOEN.

Het rapport is hier te downloaden: ondernemen in de circulaire economie

De printversie treft u hier aan: ondernemen in de circulaire economie printversie

Ecologie van economie

Zichtbaar wordt dat een nieuwe economie mogelijk  is. Een economie waarin de goederen van vandaag de basis vormen voor de producten van morgen. Een economie die ‘draait’ op hernieuwbare, schone, energie. Een economie waarin de verantwoordelijkheid voor economie, ecologie en samenleving gekoppeld wordt. Een economie waarin waardecreatie, zowel in economisch als in ecologisch en sociaal opzicht telt. Dat is een economie waarin de producent niet alleen een product levert (verkoopt) maar ook verantwoordelijkheid neemt voor de prestatie van het  product.

Dit zijn enkele van de kenmerken van de circulaire economie, die zich ontwikkelt als ‘opvolger’ van de lineaire economie die de afgelopen eeuwen, vanaf de industriële revolutie karakteriseert. 

De circulaire economie realiseert een positieve spiraal, die welvaart bevordert in een wereld van eindige hulpbronnen.

Hierover schreef Douwe Jan Joustra voor het One Planet Architecture instituut de notitie ‘Ecologie van economie’. Deze notitie schetst enkele educatieve  perspectieven voor de burger en professional van de toekomst in een circulaire economie. Dat leidt tot herijking van competentieprofielen, herijking van benodigde basiskennis maar ook de vraag ‘wat kunnen we leren van de natuur’ en welke leerstrategieën zijn passend? 

Een eerste discussie vond plaats met vertegenwoordigers uit onderwijs, natuur- en milieueducatie, bedrijfsleven, overheid en onderzoek (Kasteel Groeneveld 30 januari 2013). Het resultaat is geen leerprogramma, lespakket of methode. Het is een analyse van nieuwe en bestaande inhouden en ontwikkelrichtingen. Het vormt de basis waarop leerprocessen kunnen worden ingericht, zowel in het primair en secundair onderwijs als in beroepsgerichte opleidingen. 

Dit document is te beschouwen als een ‘map bouwelementen’ voor educatieve programmering voor de circulaire economie: basiskennis met doorkijkjes naar toepassingsgerichte kennis. Voor praktijkvoorbeelden van nieuwe businessmodellen, zie de bronnen: www.ellenmacarthurfoundation.org en www.circleeconomy.nl 

Download rapport hier: Ecologie van economie

Innovation a revolutionary evolution?

There are two major changes going on in Europe. This brings a strong emphasis on the need for innovation. 

The first change can be characterized 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. Being independent from large companies, like the energy-companies, being independent from unreliable partners (f.i natural gaz supply from unreliable partners) 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.

The second change is the transition from a linear to a circular economy. A circular economy is an industrial system that is restorative or regenerative by intention and design.. It replaces the ‘end-of-life’ concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse, and aims for the elimination of waste through the superior design of materials, products, systems, and, within this, business models. Such an economy is based on few simple principles. First, at its core, a circular economy aims to ‘design out’ waste. Waste does not exist—products are designed and optimized for a cycle of disassembly and reuse. These tight component and product cycles define the circular economy and set it apart from disposal and even recycling where large amounts of embedded energy and labour are lost. Secondly, circularity introduces a strict differentiation between consumable and durable components of a product. Unlike today, consumables in the circular economy are largely made of biological ingredients or ‘nutrients’ that are at least non-toxic and possibly even beneficial, and can be safely returned to the biosphere, directly or in a cascade of consecutive uses. Durables such as engines or computers, on the other hand, are made of technical nutrients unsuitable for the biosphere, like metals and most plastics. These are designed from the start for reuse. Thirdly, the energy required to fuel this cycle should be renewable by nature, again to decrease resource dependence and increase system resilience (e.g., to oil shocks).

The major shifts in thinking are to be acknowledged as process- and systems-innovation. They will bring fundamental shifts in thinking: ownership will be a changing paradigm with hughe consequences for responsibilities.

This needs reconsideration for the energy system.

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 more and more 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 organize 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 traffic management, 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 value creation, 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.

Leren van de Natuur

Voor Agentschap NL heeft het One Planet Architecture institute vorig jaar een verkenning gedaan naar de mogelijkheden om te leren van de natuur als weg naar de circulaire economie. Dit rapport laat zien dat er breed nagedacht wordt over de principes uit de natuur die de basis kunnen vormen voor een circulair functionerende economie. Het vraagt ondermeer een herijking van de wijze waarop we kijken naar de natuur: kringlopen zijn niet alleen een belangrijk fenomeen in de ecologie, maar vormen een bron van inspiratie voor onze productie en consumptiesystemen. De wijze waarop materialen in de natuur, maar vooral ook in de fysica, hun waarde behouden is een belangrijk thema.
Het rapport is hier beschikbaar: rapport LvdN defin

Circular Economy and Governance

There were some interesting meetings last week in the Netherlands on circular economy. Since the basics were launched by the Ellen MacArthur Foundation it gains a lot of interest in companies, science, education and government. The new agreement of the two Dutch political parties (VVD & PvdA) that took over the office this week, mentions the circular economy. Not yet accompanied by an idea on the measurements or plans, but it is seen as a perspective for the Dutch economy.

During the discussions on governance I heard some different ideas that I would like to share. In short statements it is about:

Legislation

The old school ‘decoupling’ of economy and environment/health brought us some laws and regulations that are not favorable for the circular economy. Most of them are in the field of wastemanagement. Oce materials are waste, they will be seen as wast by law and can not be handeled as resources. This needs reconsideration.

Taxes

This is a big issue at the moment that needs a lot of attention, because of several reasons: it is tricky to use taxes for policy-ambitions, it will bring massive debates and there is no clarity (yet) on how it can be done. The essential element is that taxes should shift from labour to resources/materials. In our discussions we see it as a tax on derived value(s). Creativity is needed to come to a robust systemchange.

Programs

One of the issues in the Netherlands is the freedom of the economic markets. That brings a governmental attitude that can be characterized as ‘a step back’, when ever an intervention is needed. Someone said to me: “it is like Dutch football (soccer), we have the worlds best individuals but in the transition to the circular economy we do need a good coach.” That could be provided by governmental support. Then the question is ofcourse what kind of interventions we need. Well, it is not about the change to a regulated (plan-)economy, it is supporting the capacity to grow, to learn and to innovate. These are policy goals that fit in to the Dutch way of looking to the relation between government and the ‘free’ market. By providing some programs on these three issues, the change can be supported and the government might be the right coach to become a champion in the European of Global economy. It is about creating impulses that help to speed up our capacities to work in the circular economy.

Let me try to point out some headlines of these three programs:

  • Program Growth CE: creating insights in new business models, facilities that support new types of handling resources and how to ‘track and trace’ them, experiments on performance based contracting in all public sectors: health, infrastructure, building, offices and other domains;
  • Program Learn CE: working in the circular economy can be supported by knowledge support, research and education. The need of new paradigms, understanding the ‘why and how’, creating new capacities and competencies is obvious. That need attention for implementation, curriculum development as well is basic education as vocational and professional education. Through a programma that provides impulses the need for speed can be supported;
  • Program Innovate CE: since the new circular economy will bring new products and new product/service combinations there is a need for innovations on techniques, processes and even on a systemslevel. That can be done by businesses, but there is a coupling of new resposibilities that needs to be supported by innovation facilities. The example of the UK Innovationchallenge http://www.linkedin.com/groups/Free-brokerage-events-New-Designs-4163409%2ES%2E179129708?view=&gid=4163409&type=member&item=179129708&trk=eml-anet_dig-b_nd-pst_ttle-cn&_mSplash=1 for Designers could be used as a starting point.

Of course I would say that these programmes need to be combined, then a real program management should be facilitated that knows how transtions and their interventions can be planned and executed. Guess who could do this…

The Dutch Circular Economy

In the new Dutch, government-agreement it is stated that the circular economy will be supported. No indications, yet, on the way how this will be done. Nevertheless an important step in the development of the Dutch Circular Economy.

OPAi took the initiative, together with the Ellen MacArthur Foundation to realize a Dutch edition of the report ‘Towards a Circular Economy’. We cooperate with MVO-Nederland (CSR-NL) and a group of funding partners: Liander, Sita, VNCI, Rabo, WWF-NL, TurnToo and the ministry of Economic Affairs. This will not be a mere translation of the original report but a strong focus on the consequences for the Dutch economy including a strong vision on the transition it will take to make the big change in the oncoming years.

Last week I participated in a discussion at the ministry of Finance on enhancing sustainability in their policies, purchasing and performance. This discussion brought a lot of attention for the Circular Economy. Once again we saw how professionals from governmental agencies, companies and institutions (science) are touched by the fundaments of the circular economy. It is a perspective that brings a new way of perceiving the future and its possibilities.

Let me share some of the thoughts that I heard and came in to my mind while listening to some of the discussions. I’ll bring them point by point:

It is not about morality, it is about economic change is a strong quality of the discussions on the circular economy. It needs thinking about systemic changes in the economic system. When we are able to create a circular system, then ‘feedback-mechanisms’ will occur. Producers are not just responsible for making something reasonable good, they are responsible for the performance and the re-use of the product and its resources: social, physical and economical. So it is not about doing good or even better, it is about economic change.

Decoupling is normal, coupling is the way to go However I am not quite sure about the words and ‘slang’ quality of it, it is the way to change our way of looking. Decoupling economy and ecology has been the way we encountered the environmental problems up till now: laws, regulations and control was the basic for environmental protection. Economy and ecology were more or less enemies. At least the the economic stakeholders (producers) were responsible for all the damage that was done and the ecologists/environmentalists tried to work from the perspective of protectionism. Now this is changing and we need to rethink these perspectives. Our economic system has brought quite some quality in our lives. Now it’s the time to realize the value that the economic stakeholders can have in creating new values and quality. Producing in ways that enhance the quality of ecosystems (and their biodiversity), gain clean water, purify the air, making our lives more healthy: that is the way to go!

Problem-oriented or future-driven that is a key-issue. Most sustainability initiatives are problem oriented and bring a kind of problem-solving solutions. That strategy makes that we focus on efficiency: making things better (mostly just a bit better) instead of redesign for the future. The circular economy is a new way of working and needs redesign of our systems and products. That is future driven!

Autonomous from nature to an inclusive system In the last centuries mankind has been working on becoming autonomous from nature. Where ever we live, we create the same living conditions for ourselves. The circular economy uses much more the basics of the natural system. So we will see a development in which we need to learn (again) to live ‘inclusive’ with nature.

Small is beautiful shifts to systems change. Small steps is what we tend to like in our steps to sustainability. The governmental agency that realizes biological catering in its organization is now seen a a major step forward. But what is really needed is sustaining the core business of every organization. The circular economy offers a way to do so. It is on the systems change, the real transition and needs new paradigms in the products or policies of institutions, whether it is a governmental agency or a company or an educational institution.

Educate, educate, educate! We need to prepare ourselves and the oncoming generations to be able to work in the circular economy. That means a thorough understanding of natural systems, the ability to redesign, rethink and recreate the circular economy.

Intentions becomes conditions is a last point I would like to describe. Sustainability works with a lot of good intentions. These intentions are mostly based on ideas about the quality of live for humans and nature. Steering on intentions has been effective in the last decades. We have in the Netherlands, Europe and most of the world reasonable adequate laws and regulations to protect the environment. Though the decay is still going on. Now more and more we see that new ways are needed. We need to redesign our approach to policy-making. My perspective is that we should create the conditions that give incentives to the change: how can a government enhanced the circular economy? By asking the right question! When governments use their purchasing-power the change could be there very soon. So stop buying, start asking for performance and look for performance based contracting.

A year ago no one in Dutch politics was aware of the concept of the circular economy. Now it is one of the options for the nearby future and recognized as such. Change happens!

Circular Economy basics

At the moment we (OPAi) do quite some presentations on the Circular Economy. We do like to share some of the reactions we see and get on the issues of realisation and implementation of the Circular Economy.

Thomas Rau is well known because of his intense, creative and often unexpected vision on changes that we see. Is it about energy or resources? What can we expect to see in the near future in the economy? The development of TurnToo gives him a very good businesscase and an interesting example to see how the Circular Economy works for an entrepreneur. What happens to his public is great to observe. In some keywords:

acknowledgement: almost everybody understands that there is a resource-issue in the world;

astonishment: since not all see immediately that we do not have an energyproblem, since all were educated with the idea of an energycrisis somewhere ahead in time;

curiousity: on understanding his line of thinking that brings some major shifts in the economy: performance based transactions;

insecurity: when the audience starts to understand that he is serious about changing ownership in ‘usership’;

enthousiasm:  as soon as people see the new perspective for home, for business, for education and policies.

It results in many questions and these questions help us to  think and rethink the way we work. That is almost the most exciting of it: everyday we, at OPAi, see the impact of the approach that is the fundament of TurnToo and the Circular Economy.

Douwe Jan Joustra focusses on the systemsapproach that is the fundament of the Circular Economy. In his presentations some key-elements are basic. Douwe Jan sees three fundamental spheres that give a real understanding of the Circular Economy: ecology (symbiotic relations and closed loops), thermo-dynamics (entropy) and biology (the 3.5 blj years of innovation). This leads to the Circular Economy that has clear feedbackloops and handles the externalities. The public has a little different reactions:

accelarated learning: as the listeners start to grasp that for most of them old knowledge is coming alive. Knowledge that we gained during science classes at school, now becomes functional;

recognition: in different steps in the group: some see it instantly, others look for the real meaning;

reluctance: in accepting that we need a new perspective on the economy, sustainability and the way we have to adjust our actual systems and the difficulties that the listeners see;

change of mind: is what most listeners encounter during the examples, the circular character and the appeal to human intellect that he gives;

openess to change is what happens in the end, people start seeing the possibilities of the circular economy, the need of ‘learning by nature’ and the first ideas for changes in (own) businesscases starts.

This brings questions and discussions. We at OPAi like that. For instance: is the circular economy a self steering system? Do we need much steering by governments? Are the feedbackloops indeed so well that all (companies) will feel the consequences of their actions? We think so, but we need more and more casebased evidence to anwer these questions. The first examp[les show us that the circular economy enhances:

  • energy-efficiency;
  • product innovation;
  • cradle to cradle in companies
  • profit for the companies.

Working on the realisation of the circular economy is thrilling, creative and a strong step forward on creation of a sustainable economic system. The One Planet Architecture institute supports the change where ever we can. Want advice or support? Contact us!

Hybrid, signs of a soft revolution?

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.

Circular economy, the sequel

In my latest blog I elaborated some insights on the Circular Economy, let’s say some of it’s principles. This brought on the next question by Helene Finidori in the ongoing discussion on ‘revolutionary thinking on economics’ (linkedIn Group: Systems Thinking World):

“Douwe, thanks your blog. How do you see the circular aspect of finance? And the governance of “resources [as] a common good. So a “fee for use” can be introduced. This brings interesting options for financing.” I think that if we manage to express the circular economy (with its idea of replenishment if this idea does exist in your perspective, you do not mention it in your article) in a way that encompasses the finance and commons aspect of it, we will have progressed a bit… In other words, how can you describe the circular economy in a way that it fits the transition?”

This, and some other comments, made me think on these issues: how does the valuechain get it’s fundaments? Also the question on how to percieve the notions of Good and Bad came forward.

Since my focus is that  the circular economy must be seen from a systems perspective, I would suggest to skip the notion of ‘good’ and ‘bad’. These are used far to often in the sustainability debates , making it to a ‘moral’ issue. Nature and systems do not know the concept of morality, we, humans, tend to overcompensate this: we do know these morality-concepts and exagerate the use of them. Still it are notions that help ‘us’ to see what is better or worse. So a few elaborations on these issues:

Let’s start to look again to the feedbackloops in the Circular Economy and the fundamental changes they bring:

- change of ownership from consumer to producer gives a short feedbackloop. The products with poisones materials come back in their own system, products not fit for disassembly come back and bring loss of valuable resources: so innovation is to be preferred because of selfinterest for the producers;

- agreements based on product-service combinations (=performance) show the producer directly where they can anhance the quality of performance, the benefit is there immediately (as Philips saw at our office and they changed/re-arranged the lightconcept: 60% efficiency in use of electricity was achieved without loss of performance: Philips benefits, because they have less costs on electricity);

- resources keep their economic value based on the day-value of achievement: when the producers is able to use them fit for re-use, the value is kept. This is a direct value for the producer and a strong feedbackloop.

There must be more examples. But I hope that I made my point: the circular economy has more systems characteristics than the ‘old’ linear economy. That is why discussions on the linear economy focus on achieving efficiency (making things a bit better) and become very difficult. The circular economy is based on a systemsperspective, is a fundamental change (transition) and has hughe incentives for as well the producers as for the users (former: consumers).

Bad: non-efficient and non-effective, as Michael Braungart of Cradle to Cradle characterizes it. This is where we need laws and regulations, to safeguard a healthy life for all. This is not different in a linear or circular economy. This is the role of governments, our common guardian: though in many places around the world they seem to have another agenda…

good: not just efficient (because efficient is ‘less bad’), but we need to strive for effectiveness. This fits to the general definition of ‘good’: “any benefit, increase in resources, possibilities and outcomes that do not generate an externalized bad or harm”. I would say even stronger: outcomes that are benificial for healt of all people and ecology.

The externalized costs should be part of the responsability that producers have, maybe just a new meaning of the ‘polluter pays’ principle. That could be a change in governance: taxes on declining of value.

Perpetual growth? Yes, we will see growth, at least in quality of life and performance of products. The question is whether it will take more, more and more virgin resources/materials. Products have an increasing shorter lifetime of use: the old telephone worked for 40 years or more, nowadays we strive for the newest phone as soon as it is marketed with new gadgets/apps. Is this a bad thing? Yes, as long as the producers don’t care about design for disassembly and even don’t have an interest in your ‘old’ phone: why does Apple not use a TurnToo way of trading? see www.turntoo.com. If they would, it will just be energy and labour as basics for the new product: both no problem. No problem? No, energy is around in overwhelming amounts, thanks to the Sun and we like to see people have labour.  So, growth will be there in terms of quality at least for the western markets and partly for the emerging markets in the BRIC-countries. The real developing economies will tend to ‘classical‘ growth, I assume. This brings the question: can we stop growth? or Do we want to stop growth? I would say that, just like in nature, mankind will keep striving for more diversity and quality of life. Are we able to adjust this proces from quantity-oriented to quality-oriented? As we know from natural processes growth will mean quantity before quality (diversity/resilience) comes in.

Does this give an answer to the stated issues? No, not really, because we (or maybe just me) are just starting to grasp what the transition to a circular economy really means. Let’s keep the discussions going!! We need to learn much, much more!

for some background publications, see:
www.circulareconomy.com

The Circular change

We face a real transition in the economic system: from the actual ‘linear’ to a ‘circular’ system.  That brings some different needs for enhancing the change. We could wait and see, but we know from the transitiontheory that you can speed up the process, through transitionmanagement.  The change has to take place on all kinds of levels: as well as scale levels, as organisational levels. The real question is: “what do we need for speeding up this transition?” A far too complex question for one clear answer. We will need new businessmodels, new concepts of ownership, new models of value creation, new perspectives on clients and the provided performances. OPAi cooperates with the Ellen MacArthur Foundation. They did excellent work on idea-development, educational materials and insights and real fundamental analysis of the possibilities and future impact of the circular economy on the European economy. Their report ‘Towards a Circular Economy’ can be found here: http://www.thecirculareconomy.org/

Another good source of information on strategies for the Circular Economy is the report made by the Aldersgate Group, find it here: http://www.aldersgategroup.org.uk/reports It is called ‘Resilience in the Round, seizing the growth opportunities for the Circular Economy’. It was presented at the Base conference 2012 in London on the 21th june 2012. Our managing partner, Douwe Jan Joustra, presented there, on behalf of the Ellen MacArthur Foundation, his vision on the basics and governance of the Circular Economy. His slides can be found here: http://prezi.com/iot7wycrgvtp/basics-and-governance-of-the-circular-economy/ 

Ofcourse we learn on a daily basis of the activities in the market of TurnToo, the circular businessmodel that OPAi-partner Thomas Rau, developed and is executing right now. For some backgrounds on this company, see www.turntoo.com

This brings us to some thoughts on the circular economy that we like to share. Since we teamed up with the Ellen MacArthur Foundation and the Aldersgate Group, some of their insights are used also. Our principles are:

Rethink the quality of nature: use and re-use of nutrients and materials;

Rethink the financials of use of resources, all materials are used temporarely;

Rethink our energy need and supply: use the Solar-incoming energy, wind and geothermal;

Value the quality of diversity as basic element for resilience;

Redesign our economic perspective (i.g. ownership) for a performance based perspective (i.g. useability: the ‘new ownership’)

Redesign activities and products (design for disassembly)

Experiment, explore, and accept insecure results.

This brings 8 new ways of working around, that we are facing these days:

1. Design new (performancebased) businesscases that work on the essentials of the Circular Economy. It needs new perspectives but also new skills for professionals at all levels in organisations. Rethinking the relation between producer and consumer (as well private as businesses) is a creative process that needs some thinking in a counterintuitive way, or out-of-the-box. OPAi has the instruments and methodology to do this with interested clients. Also we provide, together with Greenbizz Startup, a 4 day workshop on the principles of the Circular Economy, Businessmodels and creation of Service design in relation to resource management, client relations and performancebased solutions.

2. Learning by Nature is a state of mind and a smart way to find designprinciples for (new) business and products. We see that the knowledge of fundamental principles of nature are not used on a daily basis, maybe some biomimicry (learn functional from biology). There is more: ecology on relationship and patterns, Thermodynamics on energy and ‘matter’. For a systemic way of looking at organisations, products, logistics and societal arrangements (for instance: cities);

3. Financing and rethinking values new businesscases bring new financial arrangements. For the Circular Economy the service-agreements between producer and user are key. There is more to that. New financial arrangements are also needed for the performancebased use of resources. We envision startegies that make resources a common good. So a “fee for use” can be introduced. This brings interesting options for financing.

4. Systems change and provide us with completely new perspectives on housing and offices in the building sector, as well for renovation as for new buildings. Also on office-use and comfortable living we see fundamental changes. New businesses like Car2Go, the Coffee Company, Seats2Meet, Washing and more can be seen as the frontrunners that acknowledge that new ways of business are based on providing service and performance. How to change your business?

5. Educate, Educate, Educate is an important aspect of our ork now a days. We have a close cooperation with the Ellen MacArthur Foundation and we do lectures for them: business schools, webinars, conferences and in the near future a broad program for all formal and non-formal education. We see the need of professionals who rethink and redesign their way of working, individually and on company-level.

6. Scale changes because of new energy in society. However people like to have a lot of interdependencies, they also like to be independent. This independency is mostly felt in the field of energy. The creative civilian doesn’t need the oil-, gaz- and electricity companies anymore: by creating on local level their own Energy Company or Energy Service Company, they create a feeling and fundament of independency. Also projects based on cooperative car-ownership and other collaborative sharing bring new economics to live. We support this change, see businesscases and create the basics for initiators.

7. Transitionmanagement is our corebusiness. We identify the ‘next step’ or even better the ‘next leap forward’. Planning the interventions that are needed to speed up the process of change is what we do best.

8. Governance needs a redesign also. We envioned that this will be a major change, from a directive basis to a condition based approach. That means that governments as well national and local, need a new vision on their approach to their governance strategies.

We see a great transition coming. It will change the economic ‘game’ to an extend that is yet beyond belief. Feedbackloops change, responsabilities change and speaking in terms of sustainable development, this could be the key to a major shift in the relation between human, ecology and economy. Next time we will focus on this.