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The Role of Design in the Circular Economy

10/9/2013

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Image: The Circular Economy, Courtesy of The Great Recovery
How often do we stop to consider the lifecycle of the products we purchase?  We may think about acquiring an object and its usefulness in our lives, but rarely do we stop to reflect upon the item’s “life” before it arrives in our possession, and where it goes when its time with us ends. Can new levels of reuse be employed, thus limiting the impact of our current resource usage upon future generations? The role of designers as the creative spark in transforming production may be the key to unlocking new levels of product reuse and recycling.

Investigating the Role of Design in the Circular Economy from the Royal Society of the Arts Action and Research Centre [1], explores The Great Recovery Project, an initiative launched in 2012 to build a cross-disciplinary community that is equipped to support the development of an economy based on resource-efficient principles.  In the circular economy, products are developed in a cyclical manner, with consideration of the past, present, and future of the fabricated object.  Through tear down and build up workshops, exposures to waste management and recycling facilities, and increased dialogue and networking across disciplines, The Great Recovery Project seeks to move production, use, and disposal to a new cyclical structure, embracing the circular economy to lessen our footprint upon the planet.

How can we move to circular thinking with products built upon simple, straightforward means of appropriate second-lives, deconstruction, or discarding?  Presently, the Waste & Resources Action Programme (WRAP) estimates that around 540m tonnes of products and materials enter the UK economy each year but only 117m tonnes of this gets recycled. If an equivalent of a mere one-fifth of that which enters the UK economy is recycled, can this hurdle be overcome?  Without thinking more holistically about how elements and components can be reused, we face an uncertain future in which valuable waste may be lost to us where it could otherwise be reused.

Are we creating an insurmountable amount of waste? 90 percent of the raw materials which go into making durable products become waste even before the product leaves the factory, and about 80 percent of what is made is discarded within the first 6 months of life. When about 80 percent of a product’s environmental impact is ‘locked in’ at the concept design state, can we shift to thinking about design as a starting point for thinking circularly?  Designing products from a circular perspective empowers all levels, from early raw states to post-life break down for reuse.  Limiting the product’s impact in the early phases will ultimately save our resources in the long term.

If we stop to consider the life-cycle of a product from early design through to disposal, we can reduce our resource footprint, lessening our impact upon the planet. It is likely that we may need to do so in the decades to come, and that could become the enduring legacy that we pass on to our children.

Kate Burgess-Mac Intosh
© The European Futures Observatory 2013


References:

[1] The full report can be accessed through the following link, along with further information about the RSA Great Recovery Project:  http://www.thersa.org/action-research-centre/enterprise-and-design/design/the-great-recovery2
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Does Inequality Matter?

24/2/2013

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One of the main objections to modern capitalism that is levied by the Occupiers is that it generates a situation that is manifestly unfair. The unfairness of the situation are the large disparities in wealth that have come about during the years of the 'Washington Consensus' (free market economics combined with a minimalist approach to state intervention and regulation). The Washington Consensus has given rise to an unparalleled increase in prosperity across the planet, but one has to ask whether this is  sustainable in the longer term. If the increasing disparities in income and wealth were to lead to increasing levels of social unrest, then the gains to prosperity that have been achieved in recent decades could well be called into question.

An important point raised in Will Hutton's book 'Them and Us' [1] is that for a society to prosper, there needs to be a broad consensus within that society that the distribution of income has been reached through a fair process. Indeed, we have previously argued that the perceived unfairness of our current social arrangements is the result of many of our institutions that are no longer 'fit for purpose' [2]. It has always been argued that, for a harmonious society to occur, an appropriate balance has to be reached between economic efficiency - which normally involves the operation of unfettered markets - and social justice - which normally involves some form of re-distribution  of wealth and income. This point has recently been made by Jerry Muller [3], and is at the heart of the demands of the Occupy movement.

There is, however, more to the issue of inequality than fairness alone. Economists have a concept called the marginal propensity to consume. This is a simple device, which answers the question: if you were given an extra £1, how much of that would you spend? One of the answers that has been consistent over decades is that poorer people in the income distribution will spend more of that £1 than richer people in the income distribution. They have a higher marginal propensity to consume. If we find ourselves in a recession that is typified by a lack of demand in the economy - as we do now - then one of the more effective ways in which to get the economy moving again would be to re-distribute to the lower end of the income scale rather than providing benefits at the higher end. Which seems close to what is asked by the Occupy movement.

The Occupy movement does not speak with a single voice, so it is difficult to characterise exactly what their proposals are. Indeed, I had an interesting afternoon at the Tent City University at Occupy London discussing economic futures, listening to why I was wrong. However, there are those who argue that the present distribution of income is wrong and inefficient. In an interesting Special Report, The Economist reviews various aspects of what reform might look like and argues that institutional reform is more likely to generate more sustainable results than yet more tax, spend, and regulate [4]. This is an interesting idea and has some merit.

Does inequality matter? Yes it does. Inequality produces an feeling of unfairness within society which undermines the social cohesion that we all rely upon. It also prolongs a period of idleness in the economy, when productive resources - especially labour resources - remain under-utilised, which further erodes the social capital that has been built up. We live at a point in time where the root cause of this situation is structural, which means that the most effective remedies are likely to be structural in nature. We are likely to achieve more by attacking crony capitalism than by relying upon the traditional policies of income re-distribution, which is very close to what the Occupiers have been saying.


Stephen Aguilar-Millan
© The European Futures Observatory 2013

Follow The Conversation On Deliberator

References:

[1] http://www.guardian.co.uk/books/2010/sep/26/them-and-us-will-hutton

[2] http://www.eufo.org/uploads/1/4/4/4/14444650/the_new_enlightenment.pdf

[3] http://www.foreignaffairs.com/articles/138844/jerry-z-muller/capitalism-and-inequality

[4] http://www.economist.com/node/21564414

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Towards A New Economics

9/2/2013

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There is a wonderful moment in the folklore of economics when the Queen, on a visit to the LSE, asked why it was that so many eminent and distinguished scholars of economics had not foreseen the length and severity of the economic downturn that we continue to suffer. Of course, some had seen the crisis in advance, forewarned of it, and were ignored. Such is the fate of Cassandra! However, it is a point well made, and one that hit home.

What the Queen touched upon was a more fundamental question: is economics fit for purpose? Up to 2007, we would have said 'yes'. The free-market neo-classical economics had delivered decades of rising prosperity and improved living standards. It was only when that particular strain of economics was tested that it was found wanting. It was found that the fundamental principles of the free-market neo-classical economics had a significant flaw - the theory was too divorced from reality. It represented a fiction of human behaviour that was overly influenced by one narrow political stripe. Under pressure, the fiction evaporated.

One response to this was to argue that the theory was right, but that it had not been followed properly. This view doesn't have many supporters now. Another view was that the theory was wrong, and that a new economics was needed, one that gave as much prominence to social contribution as was formerly given to personal enrichment. This is a theme that the Occupy movement has taken up, where social justice is seen as just as important as rising prosperity. Added to that is the growing agenda of sustainability - a world in which there is little economic growth - which helps to form the shape of the new economics.

This indicates two things. First, a growing belief that the days of relentless economic growth are numbered. If we are to see slow, or no, growth, then the issue of the distribution of income - the social justice agenda - is likely to rise in importance. Second, whereas the free-market neo-classical economics had a very restricted role for government, collective social action takes a more prominent role in defining and delivering an outcome that is more socially just. To that extend, the Occupiers are right. And they need a new economics to help them deliver that outcome.


Stephen Aguilar-Millan
© The European Futures Observatory 2013

Debate this issue further on the Deliberator site.

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Are The Occupiers Right?

2/2/2013

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Occupy Wall Street may best be described as a meta-protest. The Occupy Movement, which spread from Wall Street to Occupy movements throughout the world all shared a common theme. People from different walks of life have come together to voice their displeasure at a wide range of things: bank bailouts, student loan debt, lack of healthcare, to name a few. The list is as diverse as the people involved in the Occupy movements. However, at the heart of it all, the Occupiers’ main critique is a protest against the rise of economic inequality, with much of their ire focused on the big banks, or “banksters” according to many in the Occupy movement. This is personified in their signature “we are the 99%”.

The banks have come to represent a system that has potentially failed. Bankers were given huge incentives to create complex financial products and extend cheap lines of credit, in many cases to people who normally would not qualify for loans. The bankers were making vast sums as of money when things were going well, but  when things began to unravel, these very same banks - who were engaged in a high risk / high reward game - suddenly became “too big too fail” and had to be bailed out with public funds. This incited the Occupiers’ sense of unfairness. Looking into the future, does the failure and bailout of the banks represent a turning point? Has Western style capitalism failed? If so, do the Occupiers give us any signals of what may replace it?

While the Occupy movement’s critique is accurate, they fall short in terms of any substantive solutions. The Occupiers have made a good start, but have seemingly reached the natural limits to where they could go. A solution for this could be that the Occupy movement widens its scope to help with constructing an alternative form of banking, one that can address the issues of economic equality. By joining with other groups, the Occupiers can move from being a loud voice that is too vague, to become a group working with the banks against which they protest. The purpose of this would be to create a banking system in the future that is socially useful for everyone. A banking system that contains regulatory and operational reforms, as well as dealing with the issues of equity that form the basis of the Occupy Movement. To devise a system of solidarity and reciprocity that meets the needs of our communities, not a system that divides the world into the ultra wealthy 1% and the other 99%.

Were the Occupiers right? They were. In highlighting the rise of inequality they helped to bring into light and popularize the problems of the global financial system. In coming up short in terms of solutions, the Occupiers may have reached their limits, and it may be necessary for them to reach out to other groups in order to craft a new financial system in the future, one that serves everyone, and not just the 1%.

Jason Swanson
© The European Futures Observatory 2013

Follow The Conversation On Deliberator

Resources:

A Leaf Being Turned: A speech given by Andrew Haldane (Bank of England) to Occupy Economics, 29 Oct 2012.

A Blueprint For Better Business?: A speech given by Archbishop Vincent Nichols at conference 18 Sept 2012.

www.blueprintforbusiness.org : Making the case for the need for change.

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The Pirate Organisation

21/1/2013

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Rudolphe Durand & Jean-Philippe Vergne
(Harvard Business Review Press 2012; ISBN 978-1-4221-8318-2)

How do futurists ply their trade? One method is to take a large number of observations of the world, join the dots to form an hypothesis about its workings, develop a model of the underlying causality of those workings, and then use the model to explain the past and speculate about the future. In terms of that process, this book represents an important work that has joined up quite a few dots.

When we think about piracy, we normally have in mind a vision of piracy on the high seas in the Eighteenth Century. This is historically inaccurate. The golden age of piracy was two hundred years earlier – in the Sixteenth Century – at the point where the European nations were starting to colonise and develop the freshly acquired lands in the New World. It was more Drake and Hawkins than Long John Silver. This is an important distinction that becomes evident when we consider what piracy is about.

It is best to view piracy as a process by which property rights are established in an environment where it is unclear to whom they belong. It is the mechanism by which public goods – in the economic sense, where nobody and everybody owns those goods – are made private. The golden age of piracy helped to develop the rule set by which behaviour was conducted on the high seas. The later brigandage on the high seas in the Eighteenth Century was about the enforcement of that rule set rather than its development.

This has resonance for us today in those areas where property rights are not fully developed. For example, one could argue that we are still in the process of shaking out the rule set that governs the digital world. Here we have a public good (cyberspace), which has been fairly unregulated in the recent past, where social norms and rule sets are still being developed, and where ‘deviant’ behaviour is categorised as piracy. From the perspective of a futurist, this is an uninteresting area because the governing rule set is now largely developed. If you doubt this point, try defaming Lord McAlpine using Twitter to see how fast and how hard the law can come down upon you. Digital piracy has moved from the rule making phase to the much later enforcement phase.

The authors do, however, point to an area that ought to excite the futurist – our genetic make-up. We are currently at the early stages of determining who ‘owns’ our DNA, and the uses to which it can be put. If the model suggested by the authors is correct, then we can anticipate a good deal of genetic piracy in the next decade or two. At the microscopic and nanoscopic scale, there are still vast uncharted areas that present the opportunity for commercial advantage. The conditions are right for all sorts of skulduggery until the rule set governing this area is determined.

This hints at the importance of this book. Central to the argument is the assertion that capitalism, as a form of social organisation, is constantly evolving. However, that evolution is dominated by leaps in both hard and social technologies. It is a bit like the movement of tectonic plates – gradual, but with dramatic earthquakes when there is movement. Piracy represents the earthquakes when the tectonic plates of capitalism move. In this respect, the onset of piracy in a given area acts as an early warning signal of an emergent future. The containment of piracy represents a more settled period of social and economic relations.

If - as many believe today – there has been a breakdown of the Washington Consensus and that a new capitalism is emerging, then the model suggested by the authors would indicate a period of piracy is about to emerge. We have already pointed to genetic piracy as one strong candidate for an emerging future. There are others. For example, one aspect of piracy is a lack of respect for established forms of authority. One could argue that this creates an opportunity for new ‘piratical’ forms of government – varying from the producer collectives of La Mancha in Spain to the rise of the ‘Occupy Movement’ around the world. They all indicate an unsettled prospect where the established rule set will come under pressure.

It should be said that this book represents an important first step towards understanding how capitalism evolves and changes. The model is only suggested and not developed, and could do with more historical instances of pirate organisations. For example, the English Enclosure Movement of the Seventeenth Century would make a good example of how a public good (common land) was captured and turned into private property. From a long term perspective, this proved to be beneficial (it allowed for the development of the capital surpluses that funded the Industrial Revolution), even though it was an unmitigated disaster at the time (it gave rise to rural impoverishment, destitution, and vagrancy). A more complete work would start to capture these different dimensions of piracy.

It should also be said that this is a book written by two French academics and is written in an academic style. It is not an easy read and the reader will have to work at taking away some of the points made. Is the effort worth it? Yes, this is an important book that adds to our understanding of the transition between different phases of capitalism. For that reason, we recommend it.

Stephen Aguilar-Millan
© The European Futures Observatory 2013
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