Credit: Anya Vasilieva, pexels
Shape the new Masters in Circular Economy
In 2017, the University of Exeter was designated as a Global Pioneer University by the Ellen MacArthur Foundation. The Foundation was established in 2010 with the aim of accelerating the transition to the Circular Economy and supporting decision makers across business, academia, and government.
In 2018, the Centre for Circular Economy was launched at the University of Exeter Business School. Since then the Centre has a successful online corporate Masterclass and is now looking to build an online Masters in Circular Economy and Leadership. We would value your help in shaping this new course. Please follow this link to fill in a short survey.
A Wealth of Stocks and Flows
Professor of Practice in Circular Economy
University of Exeter Business School
Looking back nearly ten years to the end of 2009 means the beginnings of my role in advising the pre-launch of the Ellen MacArthur Foundation on the potential for reviving and repositioning the idea of a ‘circular economy’. It was a concept which had been around for a couple of decades but for some thinkers it needed to mean much more than just ‘recycling’ or ‘reducing’ and ‘reusing’. Sure, it was a ‘loop closing’ enterprise, but for the majority it was a do-less-harm and often an end-of-pipe fix. It was as if society wanted to agree ‘yeah the economy is working for us but its messy – we need to clean it up.’ By the time of the financial crash of 2008/9 and the spike in commodity prices in 2010, it was clear that even the economy did not look so benign and the problems looked much more profound than an end-of-pipe fix. Where would jobs and some form of better life come from and how would climate disruption mitigation and adaptation play out?
The emphasis which became the circular economy of the post 2010 era is rooted in the work of the likes of McDonough and Braungart, Walter Stahel – with Cradle to Cradle - Amory Lovins et al with Natural Capitalism and Gunter Pauli and his Blue Economy. Essentially, it is looking at a systems approach. Doing less harm was not enough for them, practically and in terms of theory and narrative.
Abandoning the rationale of the ‘throughput machine’ and mere efficiency; instead they were taking insights from living systems and other feedback rich systems. It was now the aspiration to ‘do good’, to be in a positive natural and social capital building cycle which was effective. It was this which landed well with so many people. For these pioneers it was still a modern project – it wasn’t an anti-industrial pitch, but it was to be about stock maintenance - and by design having flows and feedback which did the job which was needed. It hints at another economy. It was and is part of a shifting framework for thinking. The phrase I like is ‘regenerative and restorative by design’ as the cradle to cradle pioneers, and the Ellen MacArthur Foundation made plain. So the term circular economy became a heuristic for such an approach. The key to its spread was that McKinsey found the business value in it and the EU found the jobs and growth angle - but that’s another story.
This doesn’t mean that everyone is dancing to this music, however. Many large and small operators add the claim of being part of a ‘circular economy’ and just tweak their waste management programmes or just enjoy the look and feel of the phrase, like the purveyors of counterfeit goods and many of their willingly delusional customers. But this happens with every change which has resonance – and I believe the circular economy has that resonance, it has the potential as an important umbrella concept and heuristic for change. In a way, businesses are in a bind because the phrase ‘circular economy’ describes the Economy, it's a way of thinking system wide about the question, ‘how do we produce?’ The challenge is less for the firm to be fully circular – an economy is not a pipework! - rather it is to be part of a system which is getting more circular, a bit like the relationship between the tree and the forest. To feed the tree you have to feed the forest. Does the firm, ‘the tree’, fit the oncoming circular ecosystem, and how is that ecosystem evolving? Are both healthy and is the system as a whole moving towards optimisation, or in simpler words towards ‘an economy which works long term’?
“Digital meets Business Models meets Design”
For many businesses at all sorts of scales there is one reason why the potential to do business with an eye on ‘circularity’ has taken huge strides. It is something I describe as “Digital meets Business Models meets Design”. The ongoing digital tsunami has changed the relationship between products, components and materials and the producer and customer or user. That word ‘user’ is seen more and more. A shift from selling products to selling services is underway or selling access rather than ownership. The phrases ‘transport as a service’ or ‘housing as a service’ or the strength of platforms like Airbnb or Uber suggest higher utilisation of assets too. The mix in the circular economy was always the shift from waste management and recovery of materials to extended product life, maintenance, fleet management and various forms of product and service mix. That usually means a change to product or system design. After all, digital increasingly tells business what objects are in use and how they are working and what the customer does and what they don’t do. Businesses need the data, the feedback and the insights and if that is attached to significant resource savings and energy savings too, then why just sell a significant object and get none of the feedback, none of the information which helps attune the business to the customer?
I predict with no sense that this is a risky exercise, that much of the creative energy around significant durable products at scale will be towards access over ownership. Check back with me in another ten years.
It’s not all about scale and efficiency however, as indicated by the framework discussions about effectiveness in the first paragraphs. Most business is small, some of it really small. For those who do survive and thrive, the circular economy looks towards the principle of ‘adding value with what we already have’. It’s the creation of multiple benefits by cascading materials and energy and circulating value locally and regionally. It's the main thrust of Gunter Pauli’s work. It's the entrepreneurial backbone of a circular economy in its future form. It’s about resilience and flexibility and more than anything knowledge and collaboration. It is hugely energised by digital but in new ways. Knowing what is available via temporary materials stores or materials exchange networks, collaboration via new working spaces – community kitchens, maker labs - spinning off an enterprise network now that knowledge can be shared, designs shared, open source and access. Digital also made various tools of analysis or making or processing possible at smaller scales and to be more flexible. Since technological change is rapid, who wants to risk making an investment that only pays back in twenty years and demands a massive market reach? A digital revolution is reorientating us to the original community-based division of labour unlike the aggregating and scale driven, standardising ‘all in one factory’ operation of the industrial revolution. And in an era of overproduction from over designed manufacturing surely this is very welcome. The forest is more than the big trees, in fact it is mostly everything but the big trees - from bacteria and fungi upwards.
This, then, is one metaphor for a functioning circular economy – the forest with a celebration of diversity (since it brings creativity and resilience), competition and collaboration, its differing scales and massive interconnectivity. It thrives within biophysical limits, maintains capital – the soils and its fertility - runs on the massive throughput of solar energy and works on the basis that waste is food for something else. What’s not to like?
Date: 24 July 2019