Who is Gunter Pauli?
The Huffington Post called him "The Steve Jobs of Sustainability". His Latin American friends rather call him "The Che Guevara of Sustainability". He prefers no reference to anyone who already passed away, and wants to be judged by his children only.
He has the ears of the CEOs of leading mining companies and is about to unveil his new model for extracting ores, especially gold from the ground that will triple the miners' cash flow and turn these formally brutal dynamite explosions into a surgical intervention. The Return on Investment is so good, that mining executives who have known Gunter for years believe that this could be the real revolution with share prices coming out of the deep (most lost +50% in one year) to triple and quadruple. The numbers are solid, the innovations have been proven, and the model is being tested as we speak in the Americas.
He partners with leading oil companies in Europe to help them get rid of their stranded assets. All investments in oil, gas and petrochemicals from the sixties and seventies are at the end of their useful life. Over-investments in Saudi-Arabia and China, plus the prospect of low crude prices for a few years more stalls investment. There are +100 petrochemical installations up for closure in Europe alone, but the social and environmental cost is too high, and the margins are too low to permit investments in a reconversion of the sector. Gunter sees great opportunities and a company he chairs in Italy have already transformed 5 petrochemical facilities into profitable operations. At the request of the Italian Prime Minister Matteo Renzi, and in collaboration with ENI, this revival of competitiveness is considered so strategic for Europe that it is directly supported by the Presidency of the EU Commission.
The Belgian Government is open to his advise on how to transform the threat of rising sea levels while stimulating the creation of new industries. His proposal will be unveiled later this year, but is based on 3D sea farming that has been pioneered in China over centuries. Gunter believes that producing food 2D on land is out of date, time has come to massively produce food, feed, fuel, fertilizers and chemical feedstock from the sea. The first plant operates in South Africa, the Indonesian Government is offering 100 square kilometer concessions and the Belgian Government is ready to change the laws. The first operations are up and running in the United States, and dozens more are coming on stream.
The Chinese Government appreciates his hands-on approach. When a Taiwanese inventor converted rocks and plastics to paper for packaging and print, Gunter put his network behind this breakthrough that requires no water, no tree cutting and offers paper that can be recycled forever. Four factories in 4 years have demonstrated that this is not just a good idea, this is a new standard that will totally upset the forest, paper and pulp industry. It's better, it's cheaper and makes sense. Dozens of delegations from around the world visit the plants and soon (stone) paper plants will emerge in South Africa, Mongolia, Egypt ... all nations void of water and trees!
Gunter manages a loyal network of 3,000 researchers, keen on seeing their innovations put into practice. He also works with 850 doers, people keen to get their hands dirty. While these industrial projects that have mobilized $4 billion in investments the past few years, his biggest impact may well be in education. He agreed to produce for Chinese schools (cooperation with the Ministry of Environment Protection, Ministry of Education and the Normal Universities) a total of 365 fables bringing children a new reality (like "Paper made from Stone") that even the parents consider "fantasy". He has already produced and published 108 in China and has another 7 years to finish the rest. These books are now test-run in 5,000 schools and will soon go nationwide. The number of fables in Chinese schools (and elsewhere), make his "Blue Economy" book that sold 1.2 million copies in 39 languages look like a bummer.
He started as a small entrepreneur in Japan, then moved back to Belgium, created 12 companies in 12 years (2 failed) and was hired by the United Nations University in 1994 with the support the Japanese Government to help prepare the Kyoto Protocol. None of his proposals were accepted back in 1997. However, with the support of 2,600 corporations and a few game-changers in the UN, he decided to pursue his design of highly innovative business models that 20 years later offer a fresh look at how industry will compete, how the poor can join a thriving middle class, how we can respond to basic needs of all with what we have, and how regional development will outcompete the globalized economy.
His think tank ZERI has been ranked by the University of Pennsylvania as one of the most innovative in the world (#7 in 2016) and having interacted with over 100 heads of government, and with 200 projects implemented he knows how to translate science and innovation into disruptive business models and pragmatic government policies by generating more cash flow than even hedge funds consider possible.
"I have never been against GMO, petroleum or globalization. I am on a permanent quest to find much better!" Gunter Pauli
The question to be asked, reading this background: "Does this man consider himself a rebel?"
Here are his reflections on the question asked by Ilaria Bonacorsi of the Italian magazine "Left".
First: Stop Being a Diplomat
When the Ambassador of Belgium in Tokyo told me in 1981 that I should rewrite my report about how Belgian companies could penetrate the Japanese company, after I had rewritten it twice, I told him to write it himself and left for Italy to participate in the Club of Rome meeting organized by Dr. Aurelio Peccei, former CEO of FIAT and Olivetti. Little did I know that a diplomat was not permitted to leave his posting overseas without the permission of the Ambassador. When I sent a summary of my vision of how to do business in Japan to Baron Daniel Jansen, member of the Club of Rome and president of the Belgian Federation of Enterprises he confided that "these ideas are not mainstream but since nothing else has worked, we should give it a try".
This encouragement led to the creation of my first enterprise in 1981 in Tokyo, dedicated to implementing the vision I had, selling beer, chocolate and fine linen textiles, and soon after I succeeded in licensing Belgian pharmaceutical patents to Japanese enterprises, closing joint-ventures and coordinating direct investments. The Japanese took notice of this success and took the bold step to promote my initiatives overseas claiming that: "if this young entrepreneur can succeed, why can't large European and American companies?" An independent career was born, and a rebel imposed himself on the market. It was Aurelio Peccei who had argued that I should never work for a multinational and certainly not for the government and preserve at all cost my freedom to think and act as I considered best for all.
You have a Chance when you start Young with Mother's unconditional support
When the Huffington Post (France) named me in 2014 "The Steve Jobs of Sustainability", my Latin American friends were quick to respond that I should be named "The Che Guevara of Sustainability". Perhaps they were right, since I would never worry to please, rather always worry about doing what is considered the best for all, often upsetting many who would feel the pinch from this out of the box thinker and doer who pursues a clear vision: create a better world with what we have. It all started at a very young age when I was reading about the genocide of the Native Americans and decided that I should go to the United States to rescue whatever and who ever could be rescued. Barely 8 years old, I pledged to save all money and depart at the age of 18. Luckily, my mother fully supported this crazy dream and indeed upon graduating from high school I left for Nebraska where once the Sioux roamed the land. A rebel with a cause … and patience.
Only Worry About the Others' Weaknesses (and there are many)
One year later I returned to my motherland, frustrated but ready to embrace the realities of life knowing that sometimes it is not worth fighting for a lost cause. Rebels fights for the cause they (believe) can win, even when the chances are small. Where would we get the clarity from that this is worth pursuing? It was during my early years in Japan that Mr. Shoichiro Honda explained that he never studied business, and never undertook strategic assessments like the SWOTS analysis (strengths and weaknesses, opportunities and threats). As a fresh Master in Business Administration from a fine European school (INSEAD, France) I questioned how he could decide on a pathway for his company without knowing his strengths. How could he decide to produce cars when his only experience was motorcycles? His answer was compelling and has guided me ever since: "I have no strengths, and my list of weaknesses is long. However, when I make the list of weaknesses of my competitors and opponents, it is even longer and that gives me the courage to pursue what I think is best".
Fantasy for Others is My Reality
I realized that Mr. Honda was as much a rebel as Che Guevara whose silhouette adorned my bedroom during my teenage years, much to the dismay of my father who thought that communists will destroy the Western culture. When he destroyed our family nucleus by escaping to Iran with another woman after 28 years of marriage, I learned that his betrayal was my greatest chance in life: take care of mom. Rebels realize that in every bad news, there is good news. My mother who had encouraged me to hold on to my dreams for a decade, and who welcomed me after I realized it was a pipedream, deserved the unconditional love from her son, just like this son had an unconditional commitment to steering this world towards a much better horizon. It seems that rebels not only go for the impossible, with passion and perseverance, but that they are surrounded by an unconditional love that offers faith and clarity that few seem to have in their quest to achieve what other often consider as fantasy.
Rebels do not live in a world of fantasy. Their world is one filled with realities, and realities they want to change. The main challenge is that everyone else in society considers these realities fantasy. The rebel has the unique capability to not only take what others consider fantasy as their reality; they are capable to go beyond their dreams. That is what gives them the courage to continue on their evolutionary path throughout life, taking one strategic breakthrough after another without ever being concerned about the pitfalls that are known to cause trouble and pain. The rebel does not face up to problems, rather avoids them, sailing around, picking up force and speed from adversaries. And all the inflicted pains are considered a passage that allows soul searching for the inner truth and strengths towards a next phase of action. A real rebel does not operate in terms of war games with battles lost and battles won, rather a rebel sees nothing but opportunities, avoiding confrontation ensuring regular surprise flipping flashes of a transformation that are presented as if the rebels lives an atmosphere of toys and sweets. This explains why rebels hardly meet objections rather transform the complex in something clear and simple, even when it is not, savoring the sympathy, especially from the arts.
The Arts: A Rebel's Logic
Rebels translate complex situations into a clear logic, insensitive to though aware of the staunch opposition from vested interests, which are overcome through minimum winning coalitions. Rebels never look for a majority, knowing that the silent majority will only join when the shift is inevitable, and never before. The rebel rather looks for the few who will tip the balance in a tightly knit friendship and an unshakable alliance exploiting every leverage point in the social fabric. Rebels advance this new truth to a core group that is self-evident, and therefore quickly grasped by others, leading to action on the ground without any resistance. How could someone be against a paper that is made from mining waste, or marble cut-offs, that have accumulated over centuries and transform this with a minute amount of polymer into a paper for print and packaging that is recyclable forever. Unless, someone works for the paper and pulp industry and obviously sees the demise of a career and a business that was thought to be a safe heaven in a flash, it is hard to be against this logic.
How can you be against the farming of mushrooms on coffee, the moment we realize that we only value 0.2% of the biomass? How can you be against paying farmers 10% of the retail price for his produce when everyone else is taking commissions on top of his costs without any consideration for the survival of his family, the rural life, and the Earth? The disarming promise of freeing up millions of hectares of land for natural forests and food while cleaning up air, water and soil, and ensuring that those who work at the bottom of our value chain have a life worth living is too compelling. This is the power of the rebel: making the impossible seems so simple.
A Rebel is different from a Revolutionary
The rebel is always driven by the common good, an intuition that there is much better. Rebels do not fight the bad; that is the role of Robin Hood and Interpol. Rather rebels fight for the opportunities that no one sees. He or she is a positive whistleblower. Of course, a rebel is an altruist, since any rebel that has a strong ego, wishing to put the self in the center is a revolutionary. This distinction is light for the outsider but decisive for those who act on the ground and make things happen. A rebel is not in search of power, rather in search of massive and positive change, empowering the landless, inspiring the moody, enjoying each moment when small steps are taken in the right direction. A revolutionary wants total control - one day and keeps control of his troops whereas a rebel believes that a job well done is the job where one is not needed, quickly providing the space and time to embark on the next intervention that could be tiny and insignificant for those who do not grasp the full picture, but strategic and homeopathic for those who connect the dots between - at first sight - totally unrelated phenomena.
Rebels never create Waves - they Surf
The rebel navigates the web of life, knowing where the energy is strongest, and the resilience is greatest, only pushing the points where power is released and leverage can be obtained. The rebel understands the power of feedback loops and multipliers, where with little effort, grand shifts can be obtained. Steve Jobs worked tirelessly to iron out what seemed idiotic details to his entourage, but now that Apple has lost its rebel, loyalists since the beginning sense the difference and sense this love of unconditional strive, and yet once the product is out, it is self-evident. Che Guevara was a revolutionary, impatient with a firm believe in the power of arms, incapable to engage with the grassroots of the Bolivian rural communities. He was paid with a bullet in the head, while exhausted from a fight against the unknown enemy and his asthma attacks.
Rebels operate with the existing forces, never trying to be the wave as a revolutionary would attempt exerting an extraordinary (personal) effort, rather rebels ride the waves that shape society permitting a swift move across without ever making a special effort. The answer and the call for action is always just around the corner, any corner. Once a rebel always a rebel, but always bathing in a new light, able to transform and transcend the present, re-emerging and reincarnating as a master who is prepared to learn from students. The leadership of a rebel is therefore one that ensures that new leadership quickly emerges and space is not preserved for the one, rather it is vacated so that the future is secured. After all rebels are not appointed, nor elected, they put themselves in charge.
Rebels at home among Peasants and Royals
The rebel knows how to navigate in different worlds, from hard work with the peasants ensuring food, managing the creation of top soil and the flow of water, to dining with the royals, able to enjoy family and friends, while finding extended periods of solitude to nourish the mission which no one entrusted. Rebels thrive on clear ethics at the core, rejecting the double moral that characterizes society that is considers less bad … as good. To pursue this lifelong mission of a rebel in heart, soul and action, there are only two simple rules: first that there are no rules, and second that rebels never accept a no for a no … and are still able to smile even when it hurts.
In the end it is all about Responsibility
When I look at the 40 years of professional life, then I certainly have been a rebel, caused pain and discomfort which I regret while opening the minds of many who now believe they can do better their parents and they themselves ever believed. Now that the University of Pennsylvania ranked our creative network as one of the most innovative think tanks in the world it is clear that this rebellious diplomat failed in the foreign service but now has to accept the responsibility that comes along with recognition at a ripe age: Inspire the next generation to be even more rebellious.
The four obstacles that block an easy passage to a sustainable energy mix
The mere introduction of competitive renewable energies and all the related innovative technologies are insufficient to steer society and the economy towards a fossil free energy mix. First of all we have to realize that the financing of renewable energy projects cannot be based on the prevailing logic of risk and return on investment. Second we need to calculate the true impact of shale gas, and its toxic contribution to the environment. Third, there is a need to transform the production and the consumption model, beyond the energy model. However, the greatest obstacle may well be the millions of MBA graduates who are all trained to cut costs at all costs without any consideration of the impact of their decisions on the systems that support life.
The shift towards renewable energy is facing four major impediments turn the present energy mix into a strategy for sustainable and competitive economic development. The blocks are:
Once we understand these factors then we quickly realize that to achieve a world without fossil fuels, more is needed than new technologies or government regulations. We need to imagine pathways out of these traps to ensure that fossil fuels are indeed part of history. As we describe these in the article below, we turn increasingly motivated to design solutions that could have an immediate effect.
While the purpose of this article is not to design a menu with solutions, it does aim to outline clearly what is possible provided we have an entrepreneurial approach and take a high degree of freedom: the liberty to imagine business solutions without having any previous experience, being hampered by any of the technological-institutional lock-ins that characterize our modern day society, and the clarity that money is not a limiting factor.
Are you building white elephants?
When Javier Morales, then the deputy mayor of the island El Hierro, part of the Canary Islands Region of Spain asked me to support the design of a local economy that one day will be independent in water and fuel, it did not take long to propose a strategy based on wind energy, hydro-power and flywheels.
The goal was not just energy: the goal was to stimulate the local economy, building on tradition and the ecosystem. Instead of viewing enewable energy and abundant water as an objective on its own, these two key inputs to live and development on the island were to stimulate agriculture and local industries. The total investment for this project at the outset in 1997 was estimated at €67 million. The response from the political and financial world was that if this little island of no more than 10,000 inhabitants would require an investment of so much money to achieve self-sufficiency, then we were invest in a very risky project that is likely to fail and turn into a "white elephant". We often neglect how entrenched our thinking is! Let us look at the same logic from another angle.
The island spent at the time €8 million a year on the importation of diesel fuel to generate electric power. Oil tankers cannot avoid spilling oil, and even though this is rather the exception that the rule, the risk remains high. The diesel power installation was noisy and polluting leaving a cloud of black air on the East side of the island. Interestingly, this economic economic and energy model is considered normal and without risk. However, it does not take an economist to realize that the total expense by the local population for importing fuel, while assuming major risks and contributing to climate change, over a decade amounts to a drainage from the economy of €80 million. This one decade of expenses is enough to fund the capital investment required to warrant four decades of energy independence. In the 1990's, that money went straight to oil producers - none of which are based in Spain. So, we raised the question: "How can the import of polluting fossil fuels be considered normal, while the redirection of a guaranteed expense by everyone on the island into local renewable sources of energy that plough money back into the economy is considered a white elephant?"
The idea to convert El Hierro into the first water and fuel self-sufficient island turned into a reality at a total cost of €86 million. The additional €21 million in capital investments were imposed after a volcano eruption forced the construction of additional infrastructure reinforcements. The facility was inaugurated in 2013! The net cash influx into the local economy over the forty years that represent the economic life time of the renewable water and power system is a surprising €680 million. After paying for the installation over a decade (€80 million), the installation saves €8 million per year for 30 years or €240 million. Then the water and power company pays dividends to the Cabildo, the local government in the order of €3 million per year, or €120 million over the life time. This adds up to a surprising €360 million that is added to the local economy over 40 years, compared to an outflow of €320 million for fuel only, making abstraction of the capital equipment required for the diesel generators. This is an amazing "delta of €680 million", a fortune for a small island. We believed that the island controls its own future. Who is to claim that the numbers are wrong, give or take one hundred million?
Now, inspired by this successful transformation of the local economy based on renewables and sustainable water production, the islanders are decided to embark on the next step: all 6,000 vehicles must be electric within a decade. It is surprising that even after the successful implementation of the renewable grid, opponents formulate the same "white elephant" arguments. How can an island afford to spend €150 million in the conversion of a car fleet from fossil fuel to electric and invest in additional renewable power generation? Why would the island ever fund an expansion of the renewable energy system only to serve the automobile fleet? Again we formulated the same question as a response: "How can an island permit the annual expense of €12 million for the purchase of fuel and diesel to power vehicles on the island?" All this money is channeled outside the economy. And, what would it mean if the €8 million for power and the €12 million for fuel were staying and circulating in the territory?
The island of El Hierro wishes to create its own electric car leasing company. All taxis and rental cars will be electric with immediate effect, and when there are 500 electric vehicles on the island, then the car leasing company will initiate the installation of a smart grid which stabilizes the network delivering micro-currents when demand so requires, and stores excess energy in car batteries as surpluses become available. When there are 2,500 vehicles, the combination of wind, hydro, flywheels and car batteries will offer a level of efficiency that further drives the cost of water and power down. Water is life and for centuries this island has suffered from a dramatic shortage of both. Just imagine the turnaround thanks to renewables and a smart grid complemented by zero emissions mobility: double the amount of water on the island at half the cost.
El Hierro has enjoyed major international media attention as a pioneer in self-sufficient islands. ©2015
We all too often forget that energy is a medium, not a purpose. Our lives depend on water, food, housing, health, mobility and each one of these core activities of life require power. It is therefore important to shift from a debate on "renewables or not", or worse "for or against fossil fuels", to a debate about our capacity to respond to the basic needs of everyone in our society. If we are prepared to transform our intentions to one that is focused on meeting needs with available resources, then indeed the debate of fossil fuel quickly shifts to a constructive dialogue about the future of communities, and how to finance this transition with available financial, human and natural resources.
Time has come to go beyond the "for or against". This divisive approach to life where we pitch the good versus the bad forces people in society to take positions. We cannot neglect the fact that the convenience of fossil fuels and its abundance for decades has permitted too many to live in air conditioned atmospheres, unaware of the unintended consequences caused by the excessive incineration of coal, petroleum and natural gas. We need to lift the debate towards one that discovers the tremendous opportunities to create a thriving local economy using what is locally available. It is a shift from cheap and easy fuel, that permits us to cut costs with an inconvenient truth, towards local energy sources that permit us to grow a sustainable economy of the territory with readily available resources.
If you pull a thread in Nature, you quickly realize that it is connected to everything else.
Unaware of the Connections
Fossil fuel has hooked us on the habit of free spending on energy without any consideration of the amount of money that is drained from the local economy. When a small island can pump hundreds of millions into the local economy over one generation of 10,000 inhabitants, imagine what can be done if larger communities emulate this model, or when hundreds of island embark on the same direction. The fuel-based economy would loose its appeal in no time. The key to understand the success of this logic is that the actual cost of oil does not matter, it is the injection of cash into the local economy exploiting local resources and growing the local economy that makes a tremendous and yet overlooked difference.
Economists merely notice the impact on the balance of payment of a nation but seldom realize the profound leakage this addiction to oil causes. Importing hundreds of millions of oil imposes the need to generate export revenues to pay the oil import bill. A country like Argentina produces enough food for 400 million people in the world, or ten times more than its own population requires. However, the country has 750,000 children under 18 malnourished. How do you explain this blind focus on export growth, increased output and the neglect of food and nutrition at home? Argentina's drive towards food exports exacerbated energy consumption and at a rate of 100,000 barrels per day ($4 million per day, or $1.5 billion per year) it is responsible for the trade deficit even when petroleum prices are at an all time low.
Fossil fuel is like a drug, it blinds us of its impact and its consequences. Even if we know - we do not want to know. Social scientists realize that there is a dangerous new species populating the Earth: one that refuses to recognizes hard facts. One of the well documented unintended side effects of burning fuel are emissions, not just carbon but also nitrogen and sulfur oxides, popularly known as SOx and NOx, which not only contribute to climate change but also affect the health of every breathing species on earth. We needed a scandal of the magnitude of Volkswagen to realize that the maximum levels of pollution set by European and Californian authorities to safeguard the respiratory health of children were openly defied by the industry, up to the point that car executives of the leading German maker installed deceiving software cheating the public at large, and with impunity. First companies that bent the rules were considered
to large to fail, and were rescued. Now companies that openly deceive and cheat are classified as too large to jail, and are merely offered an exit paying billions of dollars in fines. While we are slowly awaking to the collateral damage created by these emissions we have no idea how we have unraveled the web of life on Earth from a permanent and diligent cycle of carbon sequestration and storage, to one that permanently emits carbon all the time. Let us take the example of silk.
A Fine Threat of Silk
A century ago, the world production of silk hovered around one million tons per year. Today output hardly reaches the 100,000 tons level. The arrival of Nylon, this synthetic polymer developed by scientists at Dupont de Nemours led to the knock-out for this natural polymer produced by the mulberry caterpillar (which the English mistakenly call a worm). The traditional ecological economists would enter the debate and calculate the amount of carbon emitted by one million tons of petroleum used to produce Nylon, and compare this with the carbon sequestered in the process of producing silk. While this is a correct approach it is largely incomplete.
Silk caterpillars with a cocoon. ©2015, iStock
When the Chinese embraced silk farming 5,000 years ago, their first interest was not the silk, rather the conversion of savannas into fertile areas. Indeed, it was quickly noted that the symbiosis of a caterpillar that would devour about 50% of the canopy of the mulberry tree left on the soil a rich mix of excrement so nutritious to micro-organisms that it triggered the creation of a healthy top soil. Within a decade, an area considered infertile, planted with mulberry trees would be ready for farming water melons. What few people realized is that the caterpillars triggered a soft and unnoticed chemistry that fixes carbon massively into the soil, creating a black earth that would continue to serve humanity for centuries. This ecosystem service was the game changer of the mulberry/caterpillar symbiosis. Silk was only a by-product.
Now, with the arrival of Nylon, we are not only substituting a natural silk with petroleum derivatives at high energy expense. Much worse, we are depriving the creation of top soil and the sequestration of organically bound carbon and nitrogen. The lack of a continuous cycles of top soil generation with a blend of minerals and nutrients through the creation of additional "ecosystem services" leads to the mining of carbon and nitrogen from the top soil up to a point that there is none left. As soon as carbon is less than 5 or 6%, then the farmer is obliged to "technify" his operations including irrigation and chemicals to maintain production. Irrigation is needed since carbon poor soil cannot retain water.
The loss of N-P-K (nitrogen, phosphor and potassium) and micro-nutrients force farmers to add synthetic fertilizers since the core composition (carbon) that secures thriving micro- organisms and a diverse ecosystem is too depleted. Of course water and nutrients are only available with the infusion of massive amounts of fossil fuels.
Silk is natural and resistant, and has a useful life of at least three generations or one hundred years. Traditional kimonos, the elegant dress for ladies in Japan, would last for hundreds of years. Nylon is a typical throw away product symbolized by ladies' stockings which are sent to the bin the day a minor damage is visible. Nylon is not recycled. So not only is the silk web of life a continuous cycling of carbon, the product itself stores carbon over decades. Nylon not only releases carbon in its manufacturing, the fibers themselves capture carbon during a useful life that spans at best weeks, and more often not more than a few days.
Once we realize that the petroleum-chemistry is not only about substituting a natural fiber (silk) with a synthetic one (Nylon), it is about substituting a system that cycled carbon with long retention times and storage systems, into one that leads to the permanent spewing of carbon into the atmosphere due to this throw-away culture, then we realize how difficult it is to put a cap on carbon emissions, unless we change our consumption patterns. This makes our addiction to petroleum even more debilitating. It is like a drug addict who is not only endangering his or her own life, but destroying the whole social tissue around the community by promoting illegal production and trade that enriches a few and leaves society with all costs for rehabilitation, violence, and the penitentiary services.
Reverse the System
The key question is how to reverse this trend? We cannot go back in time and suggest that silk has to pick up its past glory as a fashion for the wealthy. It is difficult to imagine the substitution of Nylon by silk. However once we take the time to study the real opportunities embedded in the chemistry of silk, then we realize that there is an exceptional product portfolio at our doorstep that could not only serve humanity, but that could also revive the silk farming, even beyond the levels of production practiced a century ago. The new fields include medical and cosmetic applications.
Prof. Dr. Fritz Vollrath, silk expert at Oxford University who spun off several start-ups ©2015, Vollrath
As Prof. Dr. Fritz Vollrath has demonstrated through decades of fundamental research predominantly at the Department of Zoology, Oxford University, silk has unique tensile strength, permits cells to grow on and in it, and is a natural inhibitor against the growth of fungus and specific bacteria. Actually, we have forgotten that silk protects a cocoon with a caterpillar inside against the tiniest predators around and has done so very successfully for millions of years. This natural design at the molecular level has been studied in great detail. Now an amazing reality unfolds before our eyes: silk can regenerate cartilage and thus avoids knee replacement based on titanium; silk provides the scaffolding for the regeneration of nerves after trauma including the potential to one day make quadriplegics walk again.
While this application will spur the demand for only small volumes of silk, the big market will be in cosmetics where synthetic emulsifiers have become the standard, causing marine pollution with micro-beats that have a great risk of ending up in our food chain. Everything from shaving foam for men to emulsifiers in night creams to reduce wrinkles can now be substituted with a natural alternative. The non-degradable plastics beads can be replaced by silk (and other natural polymers), and that would - conservatively - require the cultivation of 2 million tons of raw silk. We can now roll-out a strategy to operate a 20-fold of acreage for silk farms around the world, with a value added that outstrips the price commanded by luxury good maker Hermès. We are pointing to a demand potential that requires to double the output from the level of silk when it was at its peak production.
The mulberry tree fruits. © 2015, Rachel Rabinowitz
We have to realize that while our addiction to petroleum is causing havoc to the atmosphere and stresses Nature's capacity to perform ecosystem services, the reverse is also true. Wherever there is bad news, we can find very good news. With other words, if the medical and cosmetics industry - realizing the documented challenges that it is facing today were to revert to silk as an option, then we will have to embark on the same massive scale of tree planting that the Chinese, the Turkish and the Italian societies had embarked on throughout history. In those days it was to please the rich and wealthy with the finest clothing. This represents an exceptional opportunity to design better quality products at competitive costs while offering a chance to increase soil fertility and offer a response to the urgent need to have sustainable agriculture with a wealth of nutrition in the soil. It is an economic model that makes sense.
Once we realize that renewables are not white elephants and that natural system are capable of strengthening "The Commons" to provide us all ecosystem services, then we have to face the challenging task to overcome the desire of a silent majority to continuously search from more of the same. As Lester Brown, founder of the Worldwatch Institute stated: "the end of the stone age was not a lack of stones; the end of the petroleum age may well not be a shortage of petroleum." However we are stuck with a tremendous institutional-technological lock-in. While silk may create inroads in niche markets that make impact, the tenacity of the petroleum and gas industry to do more of the same is a proof of insensitivity to the reality of climate change, and its damaging effects on life on earth.
Silent Chemical Reactions
The battle for a healthy and sustainable world is not fought out through hard political battles in national parliaments or international conventions, it is turned into a reality through silent chemical reactions and predictable physical effects. The molecular structure of a few gases like carbon dioxide, nitrous oxide and methane trap heat in the atmosphere. So the more these simple yet stable molecules cover the Earth, the more heat is prevented from radiating out. This is basic physics. We have seen that all attempts to reduce carbon have made insufficient impact to date. We need go beyond the substitution of Nylon with silk, rather change farming, processing and uses. The drama now is that in the light of dwindling reserves of petroleum that are cheap to exploit (deep seas and extreme climate conditions), attention has diverted to natural gas which is considered cheap and abundant with at least one trillion cubic feet of reserves. That is enough fuel to supply the world for decades to come.
The promise of cheap energy in abundance is supposed to fuel the economy. Even President Obama was tricked into believing that the private sector would invest an additional $100 billion in factories that are attracted by low cost and less polluting natural gas. This magic would create - the White House believed - not less than 600,000 new manufacturing jobs. This sugar sweet perspective made the President promise to cut red tape to facilitate the transformation of the energy mix from coal to gas. The promise was hard to refuse, even by the environmentalists. Carl Pope, the long-serving director of the Sierra Club, after receiving a $25 million donation, was prepared to promote natural gas, even from doubtful sources such as fracking. Robert Kennedy Jr., one of the icons of environmental stewardship stated in 2009 that the "energy revolution over the past two years has left America awash in natural gas and has made it possible to eliminate most of our dependence on deadly, destructive coal practically overnight".
Bill McKibben correctly points out in his article in The Nation (March 2016) that the substitution of coal with natural gas is like shifting your diet from a high fat to a reduced fat. Have people not realized that after years of excesses we should not be having fat? Should we not be reducing carbon emissions and then feel a sense of pride since natural gas only emits half of the carbon compared to coal? The bad news is that we cannot only compare coal with natural gas on a ton per ton basis incinerated to produce power, we have to look at the whole system. When the statistics emerged that gas fields are leaking methane (which is officially 21 times worse in trapping heat in the atmosphere than carbon dioxide even when scientists claim it is rather like 100 times), then it became clear that even a minor escape of 3% would simply double the heat generating effect in the atmosphere. Unfortunately, with all the computing power in the world, science and industry are ill-equipped to sense, take stock and calculate the impact of a whole system of energy consumption. So the proposed shift to natural gas is not that convincing, on the contrary it is confusing, and more likely just more of the same. Even Robert Kennedy Jr. changed by 2013 his mind when he was faced with the hard realities and retracted his earlier endorsement.
Shale gas exploration © 2015, Justin Woolford for WRI/Flickr
A Completely New Game
Now enters the world of fracking. The process is well known: the injection of chemicals and steam under high pressure to release oil. Unfortunately, it has side-effects. The use of the word "side-effect" or unintended consequences is pejorative since the damage is well documented. However, there is not only a high level of sensitivity to the exploitation of this abundant and cheap energy, there is a remarkable scientific rigor imposed on anyone who claims anything negative about fracking. Whatever is being documented and analyzed is quickly dismissed through critique that advances that the study has flaws, is insufficiently documented, or discovered nothing more than a correlation without a proof of cause and effect. It is remarkable that industry wants to have an immediate permitting without any real due diligence for investments in shale gas operations, and a rapid deployment of capital as to enjoy positive cash flow, however all without restraints. Getting started needs no in depth proof that the process is benign, any critique will have to be substantiated with decades of research and data mining across the globe.
Few policy makers who negotiated in Paris realize the vast difference between methane and carbon emissions. Carbonic gases are stable and stay in the atmosphere for centuries. That is the bad news. The good news is that these molecules trap a moderate amount of heat. Methane is a rather unstable molecule and degrades in decades. That is the good news. The very bad news is that the amount of methane pumped into the atmosphere is rapidly increasing since natural gas is the wave of the day. This process accelerates the locking up of heat in the atmosphere. This causes rapid melting of ice caps, acidification of the seas, and rising sea levels. Introducing fracking as the main new component in the energy mix has a double sided effect: (1) the energy industry is closing coal mines; but, (2) it is opening methane geysers. This means that the oil and gas industry is riding the wave of more of the same, while the public and even the policy makers believe there is a tangible improvement towards a lower carbon energy mix. Sometimes we should ask ourselves why we are so easily fooled?
Statics based on satellite pictures demonstrate that natural gas in general but shale gas in particular (which is also sold under the label of natural gas) extracted in the United States is responsible for at least 30% of the increase in methane gas emissions around the world. In addition, fracking causes earthquakes as Josh Sandburn reported in March 2016 in Time Magazine. In 2007 the State of Oklahoma reported one earthquake with the power 3 on the Richter scale. In 2015 there were nearly one thousand earthquakes. The center state of fracking in the USA now has more earthquakes than California which lays on a known fault line. This phenomenon of earthquakes is nothing new. Groningen, the center of natural gas extraction in the Netherlands had no earthquakes before 1986, and now suffers from an average of fifty per year.
The power of these findings is that we know the source of the problem and we know what to do. Some of us would expect the political leadership of the United States, especially under a Democrat Party presidency, which pretends to be akin to measures to reduce carbon emissions, is to warn other nations not to follow the same route as the American oil and gas industry is proposing. WikiLeaks cables sent by former Secretary of State Hillary Clinton demonstrate that the American government was (is) doing the contrary: she was actively promoting fracking.
Mrs. Clinton successfully arm twisted the government of Bulgaria to sign a deal with Chevron in 2011 but relentless protests forced the government to ban fracking in 2012. The same happened in Romania, but there the protests were squashed by police and the Government decided to proceed with the Chevron deal supported by the US Government after the mayor of the town purchased a large area from his own city in order to hand it over to Chevron. Fortunately, France banned it, while Germany has de-facto banned even though this energy extraction process has been practiced in the country since 1975. While a few countries ban fracking, the largest leaks of methane that have already been created cannot be plugged.
Traditionally the industry fills shafts with cement, which contracts while drying. This leaving space for gas to dissipate into the atmosphere and there are no known techniques to plug them.
There are Options - and we know it
Over the decade that fracking has been practiced broad-scale in North America, the cost price of solar photo-voltaics has dropped 80%. That is good news. However, it is not good enough. We need to go beyond the mere substitution of one source of energy for another. The third reality we have to face is that we will only create a fossil free world if we change our system of production and consumption. The mere substitution of one source of energy with another will not steer societies towards a fossil free world, what is needed is a dramatic improvement of resource productivity: use what we have and do more with what nature produces and has stored, instead of forcing nature to produce ever more.
The case of coffee is one of these obvious examples that surprises many, and demonstrates once more how much more ignorant we are of the opportunities before us than of the damage we cause. Coffee is a globally traded commodity. An estimated 10 million tons of green coffee travels the world. Who is aware that only 20,000 tons are actually ingested, and a staggering 9,980,000 tons is discarded as waste. At best, this left-over from the coffee brewing process is composted, even though we know that between the moment of brewing and the moment of disposal there is already a generation of (once more) methane gas.
Shale gas and coffee are not that different. We all know that agriculture causes major methane emissions. But, what we do not know is that many of these emissions could easily have been avoided. The coffee processing industry, from the makers of instant coffee to the chains of coffee shops all have found their ecological solutions that unfortunately belong to the same category of "substituting high fat with regular fat", whereas we know we cannot have fat.
Only 0.2% of the coffee from farm to cup is ingested. ©2016, ZERI
The preferred solution of the coffee processing industry is burn its waste. While the incineration of coffee grounds, like so many other forms of agricultural residues, is often presented as an effort to reduce dependency on fossil fuels, we forget that the generation of methane gas and carbon emissions is not the most important missed opportunity. The whole supply chain could benefit from a fresh approach, since the substitution of fossil fuel with coffee left-overs is doing "less bad". We are in need of this logic that we can and must "do more good". Here goes our logic: coffee is treated either by heat or by inert gases to extract the soluble part that offers either a powder to produce an instant drink, or a hot coffee to enjoy. Since the biomass has been pre-treated it is ideal for farming mushrooms. Do we realize that 60% of the cost of mushroom farming is the sterilization of the substrate - and this energy is not required anymore if we use processed coffee and use the grounds on site? There is a broad portfolio of products that can be derived from a waste stream that is considered only good to be burned. It is a portfolio of opportunities.
The case of coffee is just one of the many examples that demonstrates that with a minor shift in handling and processing, we are able to create energy efficiencies that have not been considered viable. We can farm mushrooms with 60% less energy and no need to transport raw materials. The advantage is that most of these solutions do not require new technologies or complex engineering, neither heavy capital investments. These solutions are pragmatic and can be implemented by "you and me". The only way that we will succeed in the creation of a fossil free world is that we cascade matter, nutrition and energy just the way Nature does. It is not difficult, it is different. The book "The Blue Economy 2.0 : an update to the Report to the Club of Rome" offers insights in cases that have been implemented and inspire everyone to do much better than we ever imagined before.
The portfolio of coffee chemistry ©2016, Pauli
Epilogue: The MBA
The fourth and perhaps the greatest obstacle to achieve a world with renewables only will not be "the oil and gas lobby". The greatest impediment to turn into a green society are the millions of MBA's (masters of business administration) who have been brainwashed to only consider a core business, based on a core competence and focus on cutting costs at all cost. MBA's believe that cheaper is better, and the solution to competitiveness, thus stimulating mergers and acquisitions. As long as we are entrusting our youth to academia who are teaching the next generation of managers that more and cheaper of the same is the model forward for society then we will never have communities that will be capable of steering towards sustainability as El Hierro has done. However, when we are prepared to embrace business as Nature does, with respect for The Commons, all invisible interconnections, unseen feedback loops, multipliers and clear ethics including nothing is wasted and everyone contributes to the best of their abilities, then we will have no difficulties to achieve a fossil fuel free society.
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This is a short treatise on the origins (and the end) of Empathy, Solidarity and Sharing.
At the start of the year I wanted to summarize my recent understandings of the origins of mindfulness and grasp the essence of the ecological, happy and healthy human being. Eighteen months of research back up this article. I have ventured into the history of the arrival of humankind on Earth some 4 million years ago. It includes the identification of the greatest inventions of humanity: the bag, the needle and bureaucracy! The findings changed my perspectives on human development. I hope you will be as fascinated with the discovery of the content as I was.
At the start of this year I reflect on the history of the arrival of humankind on Earth some 4 million years ago. The story unfolds in an amazing way since 99% of our history is reconstructed with approximately 1,000 fragments of skulls and skeletons of humanoids gathered from around the world. Scientific research on these few bones permits scholars to draw up hypotheses and put forward interpretations which plausibly reconstruct the emergence of our bipedal species spanning millions of years.
Then, after millions of years covered by well-informed guessing, finally less than 100,000 years ago the first writing is on the wall when the first written documents emerged. These painted messages, fragments of rock carvings or tablets provide a first hand glimpse of the development of humanity based on writings by humanity. It is interesting that in this whole study we only see evolution upwards: humanity is the crown of these millions of years of development. We study the arrival and the expansion of human presence as if after us nothing of importance is going to happen.
From the day that we observe how humans started to walk on two feet we believe that we had lifted ourselves from primitive life, and that we are engaged in a perpetual war for survival. We are convinced that only after Konrad Lorenz, the Austrian Nobel Laureate in Medicine, who studied birds and animals gathered a very pessimistic view of man's nature. He saw an aggressive species that battles for territory, wages war and creates a lot of suffering for his fellow humans as well as most species in Nature. Therefore, Lorenz believed that Man was destined to be checked, controlled and balanced by a rigorous system that could be called culture or government. It seems that the role of Government, responsible for approximately 50% of the world economy, and the millions of laws that regulate daily life around the globe has confirmed his analysis.
Man, as an individual, and organized through Government or even Religion and under a rigorous control can do incredible evil. The genocides systematically pursued by colonizers against local tribes in Namibia and the Congo, by the Nazis against members of the Jewish Faith, or by rival racial tribes in Rwanda demonstrate unfortunately that even governments need international powers to secure a check and control like the United Nations and its organizations like its Peacekeeping force. Humans need time to evolve into a humane species.
The characteristics of the human species were confirmed over millions of years. One of these qualities is a unique flexibility to adapt to new environments. Humans have transformed throughout evolution thanks to this innate capability to evolve over a few generations into something that could not be imagine at the outset. Humankind has this desire to go beyond known frontiers, as the emigration from Africa to every corner of the world in the span of 40 to 50,000 years has demonstrated. Humans have this capacity to determine a pathway and persevere, as the construction of the cathedrals throughout Europe demonstrated. All those involved in the decision to build knew at the outset of this huge undertaking that they would never get a glimpse of the final result, and yet they decided to commit up to 15% of all revenues of the city for over a hundred years to see this through.
Unfortunately, it seems that in recent times humans have lost that flexibility and this process of grasping what we are doing has become more difficult than ever before. With a wealth of facts before us, describing, documenting and proving the devastation we are causing and the unsustainability of our way of living, we seem incapable to evolve our behavior to a better one. We hide behind the complexity of life, even when we used to navigate it with great certainty.
We observe this massive man-driven extinction of species, a pervasive negligence and inaction around the emission of greenhouse gases and climate change, the over-consumption of resources. Our consumption goes way beyond the means of our planet. The destructive pollution of modern civilization, combined with a dominant focus on the individual by that same individual renders humanity increasingly unable to adapt to the new conditions it has created.
There is nothing more rewarding in life than seeing and understanding what we did and where we are doing, what unintended effects we cause and - perhaps most important - to realize that we have been ignorant about our impact, or mis-oriented when we pursued selfish interests such as the blind accumulation of cash. This renewed understanding allows us to evolve, to adapt, and to do better. The concept of the paradigm shift as propagated by some is healthy and exciting, but only for a minute part of the world's population. The large majority aspires to emulate a lifestyle that leads to collapse.
That is why I would like to explore again the origins of how humans turned humane, and hope that we recover what we seem to have lost. Did Humanity expel itself from this Garden of Eden? If so, then we have the capacity to recreate it as well.
It Started in Africa
The main line of thought until the late 19th century was that humanity emerged from Asia. Charles Darwin was the first to point to our close relation with chimpanzees and gorillas. The association of humans with primates was why he concluded that our origins were to be found in the tropical parts of Africa. Only one hundred years ago no one would have believed it. Now it is generally accepted that we descended from African primates from whom we diverged approximately seven million years ago.
There is a geophysical reason: while Europe and Asia were subjected to the Ice Age, Africa contained over the span of a few million years up to 90% of habitable land. Therefore the first communities could only live comfortably in Africa, move from the center of the Continent to the sea, where humans discovered the riches of life. Five million years ago, Africa started to dry out and the great forests where the primates thrived shrank. This forced our ancestors to adapt to new living conditions that drove them to search for new settlements. In the process of this search, the first stone technology emerged approximately 2.5 million years ago and the use of fire one million years ago.
We learned to walk on two feet well before our brains grew in size. The greatest innovation of all times was perhaps the invention of the bag. The bag permitted the hunter gatherer to carry 15 times more food than he would ever need himself to survive the day. The bag helps to create a home base, to divide labor, to share food, and to guarantee supply over a longer period of time. In addition, the invention of the bag simplified life of a mother who can haul an infant while gathering food. The bag made us human and helped us create community since now no one consumes on their own, and all what is carried is to be shared. The bag started the sharing economy.
The experience to come home with a bag full of food triggered in the human brain an "emotional sandwich". One one side there is stress caused by the high risk taken to walk on two legs, instead of four. Two legs move slower and less stable than four, but frees the hands. A control over hands combined with this innovative pouch allowed the transport of nutrition over distance. The other side of the brain is the emotional reward for the risk: a warm welcome by a family eagerly awaiting the arrival of food, and the emerging of a caring community based on a pattern of food security.
Community based on Empathy
This emotional experience of risk and reward led to a community based on empathy. This triggered perhaps one of the most critical moments in our development as a human. First, this provided a strong impulse to our emotional part of the brain and started a long process of development of different parts of our central nervous system. The artistic expression found a permanent and deep space in our emerging brain. Second, this helped to stabilize settlements, humans started to sing and dance well before anyone could speak, food and water remained available over all seasons. Humans differentiated from primates by learning the value of community, and the importance of caring, especially for offsprings. When humans stopped the senseless murder of infants by the alpha males simply because these children were not his - this new family of living species started to behave humane.
About 300,000 years ago a second desertification affected human life styles in Africa more profoundly than before. Communities of early humans were forced south and west to be stopped by the Atlantic and the Indian Ocean. Here these new settlements lived on a rich diet of crustacea and fish, largely unknown. This new plate of nutrition fueled the physical growth of the human in general and the brain in particular. The greatest and most detailed discoveries to document these insights of early humankind were made in Southern Africa.
Humans possess innate possibilities and are the product of Nature and nurture. Humans are not pre-programmed machines. While we share 98.8% of our DNA sequence with primates, this does not mean that a minor difference in DNA makes us similar. Humans share 35% of genes with daffodils, and that does not make us one third daffodil. One of the major difference is speech, and the capacity to hear and understand language. But before we evolved the capacity to talk and listen, we already acquired the capacity for empathy millions of years before when our ancestors split from the primates. We learned to walk, care for each other, and created a culture of song and dance to strengthen empathy. The humans that emerged from this evolution lost the alpha male as the dominant figure in their community.
The Alpha Male and Monogamy
When we project man and society against its African primate origins, we quickly borrow the alpha male from the animal world to describe the importance and the dominance of the human male. However, it is not because we are closely related to primates that we behave like the alpha male, even though this particular role has been well publicized and received broad scientific attention.
The alpha male is part of the world of chimpanzees. He is aggressive, carnivorous, makes war and even turns into a cannibal. Chimpanzees eat fruits and therefore have to cover vast areas to find food all year around. The gorilla, also known for the male dominance, is sociable and a vegetarian. He mainly devours leaves that are within reach in a small area, limiting the need to travel, promoting the organization of small groups in tree branches. The bonobo on the other hand is peaceful, solves conflicts, has the same diet as the chimp, but has a completely different social organization in which females form coalitions to dominate males. Finally, there is the orangutan which lives like a recluse most of his life.
Scientific research points out that we share 99% of feelings and emotions with the chimps, ranging from jealousy, thirst for power, sexual attraction, fear, aggression. This is something we clearly do not share with fish. We also have a common moral system made out of punishment, reciprocity, distribution of food, reconciliation, empathy and sympathy, concern of welfare for the group. Still, there are fundamental differences and one is monogamy. Evolution has provided us with an instinct for faithfulness. When we switched from vegetables and fruits to meat, children needed a reliable and stable relationship between the hunter and the mother to improve survival.
The frequent walks upright to carry more food required an extremely extensive anatomical specialization which separates us from all other primates. To turn human, evolution had to reconstruct spine, thigh, knee and foot. No other mammal has undergone such an anatomical adaptation, except perhaps the whale that first roamed land as a dog-like animal, and then returned to the sea. The new anatomy improved the capacity to carry more food, made gathering more efficient, reduced the overall risk of speed and instability, and left the couple with much more time to be devoted to family and the community. This led to an increased sense of solidarity and hence a greater chance of survival. Mindfulness emerged as a core characteristic of human nature.
Another major difference between primates and the emerging human race is that young females started to leave their group reaching reproductive age looking for a life partner in another settlement. If both females and males were to remain with the original family group, then incest would lead to a degeneration of their offsprings. Evolution taught that young born to females who changed the group were stronger than the offsprings from those that had remained behind. This is the reason that females became endowed with this instinct to search for a partner outside the inner clan. This turned the female into a more flexible and naturally more adaptive being. Since the female could not return to her clan, the unity in the family required a powerful pair-bond which is unusual among mammals. However, this new life style allowed males and females to make a life-long investment in their descendants.
The metabolic rate of the brain is 22 times faster than that of major muscles. The brain accounts with the heart, liver, kidney and intestines 70% of the body's energy requirements. This was facilitated by a transformation of the human digestive system that could easily digest animal proteins complementing proteins from plants that made up the bulk of our predecessors' diet. A nursing mother requires the same number of calories per day as a runner preparing for a marathon. Time has come to stabilize relations and to trust each other.
Life Long investments and Reduced Risks
As a more powerful bond developed among our predecessors, ovulation became increasingly concealed. The female could copulate more frequently with the same male, which served to strengthen the bond and increases the probability that this individual is the father of her young. This
made it more profitable in genetic terms for the father to help the female and the young to get food. This in turn diminished the need for mother and child to look for food themselves which reduced risks. This emerging pattern of behavior markedly increased chances of survival. Within this new context, the female will choose a male inclined to help and protect her. She prefers a male with small canines who is dedicated to her and their children over a macho male which huge canines who is always ready to fight, and even kill her offsprings if he would be uncertain it were his as a means to establish and protect his supremacy.
Even though it was long believed that tools and language were the privilege of the human species, we have discovered that many animals are endowed with this capacity. The tool of language is not exclusive to humans. We do differentiate ourselves with our capacity to articulate consonants since many species can only make vowels. Our particularity is further demonstrated with genes that developed our hearing into language processing instruments. Improved insights through hearing, and the shift away from infanticide, stimulated early human society, based on the pair-bond, to consider internal tensions the most threatening. Life, and the very survival of the group depends on life-long cooperation. This cooperation is embedded in a collective memory and a learning process that is created and reinforced through storytelling, accompanied by song and dance.
As humans evolved over millions of years triggered by this emotional sandwich, the brain grew from 450cc to the 1,400cc of a modern human. In the process of growing our brain and crane, humans started losing canines. Whereas male primates possess these terrifying weapons to ensure respect and obedience, the humans apparently learned at a very early stage to manage anger and demonstrate dominance in other ways than showing off large teeth, threatening to fight and kill. Humans ultimately ended up with women's teeth!
This reduction of aggression and tension resulted in a greater likelihood for the young to survive. 37% of infant death among gorillas is murder by males. The additional benefit of the shift towards female logic is that the emerging homo in peaceful groups could concentrate all efforts to gather food and to protect the community collectively. The importance of cooking and eating together turns into a core characteristic of a human community. Acquiring and preparing food as an individual for oneself leads to an alienation of those individuals in society, undernourishment and early death.
Then, humans developed this exceptional capacity to breath at will, thanks to the ability to store a high level of haemoglobin in red blood cells. The control to close air passage at the base of the tongue, while inhaling air made more complex speech possible. Humans learned to communicate with one another like no other mammal has ever achieved. This enhanced the capacity to work together, and reinforces empathy. Humans subsequently learn to imagine how other people think and feel. This endowed us with the desire to do to others as we would be done by: evolution led to solidarity and strengthened our mindfulness.
Efficiency through Solidarity and Sharing
The efficiency of life reached an all time high when sharing became a tool of exchange. The early communities in and around the Kalahari Desert had a widely distributed knowledge amongst all members about food and nutrition. The clan lived on an extremely varied diet of +100 plants, 30 types of fruits, nuts and berries, 18 types of resins. Young women knew at least 300 different plants, how to prepare as food or as cure. One third of the diet is now meat, or approximately 100 kilos per person per year. During his lifetime as a hunter, early man would kill 100 animals. A single kudu of 400 kilos provides 600,000 kilo-calories, enough to feed a group of 30 individuals for ten days, equivalent to 50 days of gathering. Now the humans are gathering around a fire. This solidified and increased the sense of community.
The first humans in the Cape lived in a fynbos, one of the world's richest biotopes in botanical species. Here the humans could substitute the quantity of food with the quality of food, a variety of vegetarian and animal protein, enriched with crustaceans and shellfish. Seafood emerges as a key part of the diet which boosted the functioning of this energy intensive human brain over a short period. Although the brain is only 2% of bodyweight, it accounts for 20% of an adult body's energy. The oldest accurately dated finds of anatomically modern humans are found in conjunction with piles of seashells. This healthy and nutritious diet permitted the human species to develop an advanced sensory capacity. These first Africans carried out impressive works of art 77,000 years ago, twice as old as the oldest cave art in Europe.
These clans with fine arts had the ability to conceive the past, present and future. This capacity defines modernity in terms of intellectual capacity. Life in this relatively infertile Southern African environment, required only two to three hours of work to attain food security. This resulted in time for leisure, strengthening solidarity, building a resilient community, caring for the family, strengthening the will to stay together. Modernity emerged by chatting around the evening fire and having fun, being nice to each other, singing, dancing and learning different means to resolve conflicts.
The human dependence of the hunter-gatherer group was driven by their ability to share. This provides security over time and minimizes risk- taking with a powerful obligation to help one's neighbors. Social interaction was key, visitors were always welcome and extended contacts outside the nucleus of the group diminished the risk of inbreeding within the group.
Ownership and possession of the hunter-gatherer were very restricted in the course of his lifetime to approximately 10 kilos. That is all that could be easily carried when there was a need to move to a new camp. Life and culture of the hunter gatherer emerged over tens of thousands of years to minimize risk of violence within and amongst the groups. Those who managed best to ban conflict increased the chance of surviving to reproduce and so transfer their cooperative drive to future generations. Agreements were reached not by consensus, where everyone agrees, nor by majority plus one, but by reaching the point that no one had sufficiently strong opposition, leaving it to others to pursue what they considered important.
In a world where leadership is authoritative, rather than authoritarian, and where a cooperative spirit enjoys a high cultural status, life is geared towards conflict anxiety. Males and females were even physically comparable in size, which leads to an increased equality between sexes. So the harem gave way to a style of living together out of necessity. Since the brains of the babies were growing larger, meant that the children had to be looked after much longer. In a hunter gatherer society no mother would have succeeded without living together with the father, and the extended family.
Caring for each other was the best option in order to pass on the genes to the next generation. Here emerged self-confidence and self-esteem, an evolutionary drive to gain approval of the group and a caring for each other. This combines with a unique biological pecularity in our brain: perseverance, we simply do not give up and keep on trying. This drive for perfection is a unique human trait that is in strong contrast with the rest of the animal world. While we consider this a standard feature, the other primates must consider us mad. Nor would another ape get the preposterous idea of lying down and sleep next to someone one had just intercourse with. In the animal world, only mothers stick close to their babies, no one else.
While food from seas, lakes and rivers provided the energy, humans also developed language, which brought powerful tools such as devotion and guilt, creating deeper relationships while formalizing the daily contacts and develop maternal love, the most powerful and fundamental instinct in species. The group starts to provide proof of empathy. We are as human species unique in providing altruistic help to individuals outside our own group, even to strangers. However, empathy is the glue that binds socially complex communities together. We are born with a will to distinguish between good and bad, to do as we are done by. Our innate moral sense then went on to create religion. This was not only an environment that was good for Nature, it was also good for our souls.
These African communities started to travel and discover the world at a rate of 25 to 30 kilometers per generation. Around 10,000 years ago humans started keeping domestic animals, instead of hunting. We farmed land instead of gathering. This shift changed the way we lived (in one place) and what we ate (milk and cereals we barely consumed before). Our change in diet and our change in social organization made it possible to produce more food per hectare. However we do not seem to be aware that a diet based on large portions of grain and milk provided poorer nutrition then what the human race was accustomed to. The result is that we shrank in size as we learned from the comparison with the Neanderthals that lived in Germany. Not only did we physically shrink in size, even our brain started to contract again.
Left skull of modern human being, right skull of Neanderthal. The new agricultural communities provided a controlled, protected environment. The distributed organization of large numbers of people in different parts on Earth meant that humans gained power over the world around that no single animal ever attained. These sedentary communities displayed creative thinking, had the ability to reflect on mistakes and how to improve them with an ability to cooperate with different groups and invent forms of exchange with distant settlements. The networks of communities over large areas provided a form of life assurance in difficult times as help would be within reach at times of setbacks. These settlements built better dwellings and acquired the technologies to recreate the tropical conditions of origin thanks to solid housing, fire and woven clothing. The same technique of weaving produced nets for hunting and fishing approximately 30,000 years ago. Humans invented the needle and could sew clothing. That gave an advantage over any other skin protection.
Humans acquired long noses to allow hot air to cool, or cool air the warm up and moisturize it by a larger expanse of the mucus membrane. Tall people have it easier to radiate surplus body heat. Even our looks started to differ since a less frequent exposure to the sun acquired humans a lighter skin color that makes it easier for sunlight to penetrate the epidermis to help synthesize vitamin D which plays a key role in the production of calcium to reinforce the skeleton.
The diverse looks that evolved over millennia of migration to all corners of the world do not reflect the fact that genetically all humans are 99.9% alike. There are genetically speaking no races. The lack of genetic diversity among human beings is potentially a major problem. It makes us considerably more susceptible than any other species to viral and bacterial diseases, and to epidemics. That is why after a clear commitment to resolve conflict, humans accepted the duty to cure illnesses and to strengthen our immune system. The new role of healers emerged. At first, no one gained any special privileges, no matter how skilled one may have been. Healing originally equated to sharing spiritual gifts, and the cure emerged during dances where everyone is engaged in healing and strengthening everyone else, while strengthening solidarity. During these dances, the whole becomes greater than the sum of its parts. Humanity emerged in Africa singing, dancing and painting and it left to discover all continents keeping these traditions solidly in place wherever humans finally settled.
Throughout these new times for humanity art and religion assumed the responsibility to create metaphors. Common to all religions is that the lives of humans are ultimately governed and influenced by forces that cannot be analyzed using logic and science. At the same time humanity created a world of artifacts that are pure inventions and never existed before. We invent our world and change it through what we achieve together. No other species has ever achieved that.
Thousands year later, the advent of modern science assumed the responsibility to deconstruct metaphors and force a focus on what is real and what can be measured. For the Bushmen in Africa, shamanism and trance, as well as its expression in rock art was a responsibility shared by everyone. However, as populations emigrated to the far corners of the world, the European cave art and religious role of the shaman led to shift from an egalitarian to a hierarchical society. The first hierarchical societies were created where a few had power over many.
Dancing and singing strengthened the group. Language made it easier to resolve conflict, to cooperate, to reach agreement and to keep in touch over time. The idea that there are spirits we cannot see, but who influence our lives emerged as a powerful concept. Suddenly everything can be explained! Why the harvest is abundant, or why I am ill, how the children grow up healthy, and why there is rain when we need it. All subsequent civilizations evolved around the idea that these spirits must be kept happy. The emerging religious rites are performed in combination with rhythmic music that gives a powerful sense of well-being and continued coherence of the group. This becomes a fundamental part of us becoming human. The world that emerged now is fundamentally different from the one humans pursued for eons as hunter gatherers.
The End of the Garden Of Eden
The human settlements served early on as hosts for rites, and this permitted the ceremonial masters to acquire greater influence and thus emerged the first taste of power. The desire to transition from hunter gatherer to farmer perhaps had more to do with power than with food. As we learned, a new diet of grains and milk (gluten and lactose which only few could digest) reduced our size and even shrunk our brain by as much as 20%. So 8,000 years ago only a few hundreds of productive farming villages dotted the planet that were fundamentally hierarchical, organized power structures, with populations divided into social classes. After an estimated 2,000 years all humanity lived in this structured way.
Of course there was a clear necessity to get down to basics like storage and delivery. As a hunter gatherer, food was available all year following the rhythm of Nature. As a farmer, the entire yield needed to be guarded and consumption had to be carefully spread over the year. The granaries permitted the rise of guards who could demand part of the harvest, without ever having contributed to its production. That was a very new phenomena.
The transformation of a food chain of daily fresh supplies to year-long planning stimulated new ways of preparing (baking, boiling, brewing) and preserving food (pickle, sugar, salt). The power of wild yeast to preserve food, add taste, transform and release the unique nutrition embedded in produce and fruits led to the advent of wine, beer, yoghurt, bread, sauerkraut, tofu, kimchi, even coffee and tea, which are all the product of fermentation.
Soon walls were erected to protect the harvest and written language improved control and made it easier to exert power over a distance. This promoted more sophisticated arts and crafts and led to one of humanity's greatest revolutions: bureaucracy. Then the new form of life shifted the management of procreation. Nomadic civilization planned birth carefully in line with the carrying capacity of the land they roamed. The farmers perceived their capacity to feed as a freedom to procreate and this lead to a population explosion. However, the advent of agriculture and the strengthening of civilization created an environment that condoned and even promoted ego, selfishness and war.
We could conclude that this was the end of the first affluent society. Humans had evicted themselves from the Garden of Eden.
Life got violent and civilization turned out to be a lot more brutal than earlier phases of human existence. There was a need to defend the grain reserves which led to inventing cavalry and archery. This resulted in a new profession: the soldier who turned out very expensive, compared to the era of the hunter gatherer when every nomad was a warrior. But the waging of war and the cost of armies was not the only side-effect of civilization, the other was the rise of epidemics. The close proximity of animals, and the mutation of viruses unleashed entirely new plagues to which the human immune system had no defenses. The third impact of civilization was the destruction of the environment. A few centuries of irrigation (e.g. Mesopotamia) turned an entire fertile region into wasteland due to the accumulation of salt. Farming caused massive and uncontrolled soil erosion which led to the rise of the river beds which caused extensive flooding (e.g. Yellow River).
The advent of agriculture and civilization thus caused social conflict, environmental degradation and human suffering beyond anything experienced by humanity before peeling solidarity, reducing security and increasing risks to life ending the sense of community and belonging. Endless disputes often over trivial issues like access to resources and possessions blown up in importance by ego's that use their power to intimidate and to determine (armed) settlements.
This is a new world where The Commons were invaded, and human rights needed protection, since the core principles that had emerged and were embraced by all did not apply anymore. Individuals dominate, accumulate wealth beyond their capacity to consume in a lifetime, and often are prepared to squander everything, including the lives of others to satisfy their ego.
What a difference a couple thousand years make.
Reflections by Gunter Pauli, author of The Blue Economy on June 23, 2015 on the occasion of the 3rd graduation of the seniors from the Green School in Bali (Indonesia)
As I stand here in this student-made hall I remember the day 20 years ago I came for the first time to Bali at the invitation of Linda Garland. It is thanks to her that I fell in love with bamboo. Thank you Linda! John, Cynthia and Elora Hardy have taken my love for bamboo to a new level. This - the Green School and the Green Village - is not just about bamboo anymore, it is about a new paradigm, that embraces first and foremost education, living and sustainability. And I thank you for that.
However, driving through the rice paddy fields between the Green School and Ubud these days, I notice that part of the fields are taken over by genetically modified corn. I saw diapers floating in the irrigation channels, and was shocked to see concrete roads pulled straight to the once pristine horizons of Ubud. We knew the coast would be invaded by hotels, but we always believed that Ubud and the highlands would preserve their culture, tradition and integrity of its ecosystems.
It is against this background that I would like to share five core principles that I suggest would guide life after graduation from the Green School here in Bali. These principles cover happiness and joy, the end of a double moral, the challenge to create what did not exist, to stop distinguishing between good and bad, and finally the importance of life long learning.
1. Happiness and Joy at the Center of Your Development
In his remarkable book "Dawn over the Kalahari", Lasse Berg describes how humans became humane. When the future human decided to run on two instead of four legs, he took a risk. Indeed, running on two legs is slower and less stable than four, but the upside is that now hands are free to carry more food to the refuge. Now when risks are taken and anxiety rises, the warm welcome at home from family celebrating the arrival of food offers a unique emotional experience.
The study of the skulls of the "early Lucy's" confirm that the first development of the human brain in use and size is triggered by emotions. This provoked the subsequent growth of the motoric and sensory lobe. So it were our emotions and the experiences of risk, love, affection, appreciation that made humans humane, and develop more intelligence and agility with our extremities. And then it seems our brain growth from the size of one fist into two fists stopped. What happened?
It seems that after these enthralling experiences of risk and love, community and resilience, humans started redirecting their attention to their egos. New experiences emerged like jealousy and envy, aggression and anger, stress and bitterness, which colored society with a clear desire by a few to control power and subjugate others. That may very well have stopped both our amazing emotional development as a humane society and the growth of our brain.
If you want your life after school to be one that has a chance again to evolve with compassion and mindfulness, where we balance the sense of survival with a clear passion for life, joy and community, then we will have to embrace these original discoveries again of risk and love, for those dearest to us, those around us, including the social and the ecosystem webs of life.
2. Ethics at the Center of your Life full of Reflection and Actions
Life is not a machine. Rather is it a network of living organisms where we are more connected to bacteria than to plushy bears. Life is about connectedness, relationship, patterns of behavior, time and place-based context. That context is made out of the ecosystems that provide us free services like the creation of soil, the filtering of drinking water, and the buffering of natural disasters; as well as social systems that build up non- commercial capital like culture and tradition, and resilience during adverse times we, and our communities will always face the day we expected it the least.
I expect you as graduates to embrace ethical behavior at the center of your life. I especially hope that you will stop the double moral that my generation, your parents have displayed for too long. While we all agree that stealing is stealing, and stealing less is still stealing, we have different standards when we deal with the environment. How is it possible that we are happy to do less damage to the environment? Companies polluting less receive environmental awards! Stealing is stealing and polluting is polluting. No one should ever deserve recognition for doing less bad. Bad is bad.
However it is not only a matter of being content when someone pollutes less. Our double moral in society also permits individuals and companies to refuse to do more good. And that is bad as well. I expect you to be blunt and clear that this will not be tolerated any more. Permit me to share the reality of a major coffee company that produces millions of tons of coffee waste, extracting the active ingredient from beans to produce instant coffee. The company burns that waste, rightfully claiming to save energy and reducing carbon emissions. But, the company fails to highlight that the waste of the coffee could have produced millions of tons of mushrooms, and the waste after harvesting the mushrooms is great chicken feed, creating even more protein while generating hundreds of thousands of jobs. Are you on Earth to do less bad, and do you have the right to refuse to do more good? I trust you will accept the mission in our lives is to do more good.
I lived through this experience myself. When I took the leadership of a small Belgian detergent company we produced soap from palm oil. We manufactured in an ecological factory made from wood with a grass roof, a series of cleaning products using biodegradable and renewable ingredients. Still, we were not sustainable. How could I clean up the rivers in Europe, while destroying the rainforest in Kalimantan, and the habitat of the orangutan? We have to be clear that a sustainable life requires us to be unconditional about the ethics at the core and I expect you to lead the way where your parents failed.
3. Your task - Create what did not Exist - do what your parents cannot imagine
As graduates from Green School, I ask you not to follow the rules of the game but I am not asking you to break the rules of the game either. I wish you take it upon yourselves to create new rules for others to follow. The rules in the economy today do not reach out to everyone at least 40% of the world population has to survive on less than $3.5 a day, and 90% of Africans work on informal jobs. We are destroying the environment and we are taking social systems apart. We do not have a clear understanding of how life works and therefore we need to have a fresh look at reality.
Ask your parents: how did the apple get up in the tree? Or ask: how did the water get up in the coconut? Now may I submit that when you only know what comes down, and have no idea how it got up defying the law of gravity, what do you know? How can you ever design a sustainable society? Time has come to go beyond the economic system your parents and grandparents designed and participated in. It is one that focuses on cutting costs at all cost. You will change that by creating more value from what is locally available. We have to put a stop to this madness of always producing more of the same, where cheaper is better while we leave no more money to circulate in the local economy. How can we ever have the jobs for the next generation when we do not know what we have and how to respond with it to the basic needs of all. Once we decide to pursue this avenue in life, then you will be able to create what did not exist.
One of these new initiatives we have recently embraced is the making of stone paper. Imagine the waste piled up at mining sites, millions of tons that pollute the air with dust particles, and pollute soil and water. We take those crushed rocks, blend them with plastics and produce paper without a drop of water. This paper is recyclable forever. All graduates today at the Green School receive a copy of a stone paper note book as a small token to remember that you can and should create what your parents cannot even imagine. Stone paper not only undoes the errors of the past, it creates products that will save millions of trees and eliminates costly consumption of drinking water. We need to go beyond what we consider possible, and do the impossible.
4. Be guided by the fact that there is no good or bad
Our Christian logic has created a framework where we quickly separate the good from the bad. I suggest that you, Graduates of Green School of Bali, accept that everyone can always do better. Even when you are the best, you can do much better. And let us strive not only to always do better, but also to do faster and more. However if we want to do more we cannot use the tools that limit us. Let me share with you the work my daughter Chido is doing in Africa. When she sits together with workers on coffee farms in Zimbabwe who survive on less than a dollar a day, and she explains to them that the waste of the farm can be used to grow mushrooms, the women listen, get exited, get up, sing and dance, and they do it!
What does a modern day venture require? You first have to write a business plan, set- up excel spreadsheets, undertake a technology audit, build a pilot project, study the market, write reports, discuss it in a commission, set up to monitor progress, look for funding, and in the end - seldom anything gets done. We need a new generation that gets things done because we cannot simply waste time, we need to focus on implementation with passion and commitment, always striving to do better.
5. Embrace Lifelong Learning
Of course you will now graduate and remember your teachers. You will look for mentors who will guide you as I have benefited from so many mentors throughout the years. As professor at several universities I always maintained that the best moment to learn from my students is during the exams. No, I do not like to listen to the answers to exam questions I already know. I have started to turn the tables and suggest that the students ask me questions. The one who can ask me something I have no answer to gets the maximum of the points. Every year, I learn something new from my students.
The greatest that can happen to a professor in this quest for lifelong learning, is to learn from students. Now the professor is a master of his subject but thanks to the impulses from and interests of the students, the master can become a grand master, and the students may become masters. Now since a professor has many students, he can - provided he has the humility and the curiosity - become a grand master and perhaps motivate his students to be masters. Now once you reach the level of grand master then there is a unique window of opportunity in life to turn to this wisdom into immortality. Lifelong learning is not just about you learning throughout life, it is about building up a community, a social network that will always acquire new insights and always innovate, while at the same time build culture and social capital.
At this point I would like to conclude remembering the wise words of one of my mentors, Mr. Shoichiro Honda, who created the Honda Motor Company. He once said: "Some dream to escape reality, others dream to create a new reality."
Graduates : go, dream and create that new reality.
Reflections on How to Get Out of The Poverty and Jobless Trap through a Bottom-Up Scenario
The market economy is not capable of delivering to poor people as persistent rates of poverty and malnutrition demonstrate. The market economy is not capable of creating jobs to everyone as persistent rates of unemployment, especially youth unemployment confirm. There is a need to imagine a business model that performs much better; one that generates value, circulates money in the local economy and aims to provide products and services with inputs, capital, energy and human resources that are locally available. The cases of the Blue Economy published on www.TheBlueEconomy.org analyze the real opportunities.
Since traditional solutions like the “trickle-down effect” have not succeeded in overcoming basic challenges, the local economic growth model must allow for a transformation of the community from poverty to middle class. We have witnessed how this has been achieved in regions of violence and deprivation over the years. The core approach is to cluster water and energy tied to sanitation and affordable housing; food and nutrition related to health and safety; culture and education which bring knowledge and wisdom accumulated over generations; and mobility and energy. All of this combined, like all other linkages, will create jobs and bring innovations to the emerging communities.
Case 108 added specific details on the design of the cluster related to housing: how a new model based on an open market and entrepreneurial business initiatives can change the quality of living in the future. There is a tremendous need for housing. There has been no delivery during the past few decades, but there is no need to blame politicians.
The business model chosen to deliver affordable housing is to blame for the failure to deliver. This is where The Blue Economy intends to demonstrate that other business models are possible. The creation of local double-digit growth economy imposes a meticulous identification of all opportunities. This leads to the design of a bottom-up scenario where the eradication of poverty and the growth of the economy depends on the speed at which new business models prevail as dominant on the market.
The Objectives of Economic Growth
The claim of the communist intellectuals in the 19th century, and today a belief shared by many, that “the rich get richer and poor people get poorer” seems now confirmed.
Professor Thomas Pikkety demonstrates in his much debated book, based on two centuries of statistics, that the rich who control capital are getting richer, especially in a time of crisis. Pikkety argues eloquently that as long as the rate of return on capital is higher than the rate of growth of the economy, the poor will get poorer. The capital used to be land and then it was mainly equipment to manufacture. Today it is merely cash that expects to earn money on money through aggressive hedge funds or speculation in cyberspace. Have we ever had anything more perverse than the notion that money makes money?
We know that split-second trading through supercomputers in stocks and currencies is making billions for those who have billions. We know that those who make billions, both individuals and corporations exploit the loopholes of tax laws and if they do pay taxes, it is never more than a few percent on their profits or wealth. Nearly all profitable corporations and the wealthy limit their involvement in the social economy to Corporate Social Responsibility (CSR) programmes that reach out to a few individuals. The pictures in the annual CSR report can most likely capture almost all of those who benefited. We should ask the fundamental question of whether we undertake to have corporate social responsibility because we have made so much money, or if we make money because we successfully assumed our corporate social responsibilities. In addition, all CSR initiatives are construed as tax deductible; in other words the community pays.
How many corporations really turn CSR into a corporate strategy in line with their products and manufacturing? We know that under these circumstances it is impossible that the poor can ever get rich unless they cheat the system. The only option to get out of the poverty trap seems to be illegal and illicit trade, ranging from drugs to endangered species. Extremely high unemployment rates close the opportunity for upliftment through hard work. Strict immigration rules force the most courageous immigrants to seek illegal entry.
Of course the reaction from the establishment when it is confronted with these facts is to debate the results, question the data, cast doubt over the sources and ultimately do what all establishments have done throughout history when a new truth is haunting: discredit the author.
This is normal. When the facts are finally accepted, are no longer the subject of heated debates and have become the preferred subject of social conversations, those who formulated the harshest critique will pride themselves on claiming that it was their original idea anyway. There has seldom been such a strong and fundamental reaction against the confirmation that “the rich are getting richer”. The fiercest critique against the theorem proposed by Prof. Pikkety comes from the Anglo-Saxon economists who stand by the “trickle-down effect”, which pretends that as the rich get richer, money and wealth is slowly but steadily transferred to poor people.
This is only supported by anecdotes and no statistics prove this argument. One of the reasons that the trickle-down never occurs is because the rich and multinational corporations do not pay a reasonable tax rate. As we have learned over the past years, all leading enterprises excel in avoiding taxes, bringing the real rate to perhaps 2% of profits. While a hard working family will see up to 50% of their gross income evaporate in taxes and social security, large corporations get a license to distribute quasi tax free income to their shareholders.
The wealth generation over the past two centuries has offered opportunities to Europeans to join middle glass. The accumulation of wealth in North America is an exceptional opportunity: a nation that grew from 3 to 300 million inhabitants in less than two centuries and appropriated all land and resources as their own from the natives has the capacity to spread wealth and propagate the "American Dream". Even under these circumstances, the rich always got richer over two hundred years except during the Great Depression and the Second World War. (The rich get richer and the poor get poorer especially at the time of the latest financial crisis in 2007.)
It cannot be neglected that until recently, growth in the United States in absolute numbers of middle class citizens rightly fueled the notion that the “American Dream” is possible. Unfortunately, the latest statistics suggest that never before have the rich Americans become so much wealthier. Ample evidence shows that two income families living in megalopolises like New York, Chicago and Los Angeles, cannot make ends meet or put their children through college. Data indicates that in 1964, 23% of all children in the USA lived in poverty. Fifty years later, despite 16 trillion dollars of investments in poverty alleviation in the wealthiest nation of the world, 22% of all children in America still live in poverty3. Children living in poverty is only one parameter; the income gap between the US' richest and poorest metropolitan region has reached the widest on record in 2014.4 What happened to the American Dream?
The hard absolute numbers dampen the positive impression created by relative data. Statistics show that whatever argument anyone wishes to prove, sometimes you use absolute numbers and sometimes you use percentages and reality can be presented to suit either way. However, when it comes to poverty there is only one number that counts in our assessments: the absolute. It seems that efforts were directed to reduce the pain and discomfort of poor people by providing aid. While that is appreciated, some argue that this is the very reason for this persistent poverty trap: aid needs to be transformed into empowerment5. The hard reality is that aid programmes managed by governments, corporations and foundations have not been successful in securing access to the tools required to get out of that trap.
While poor people derive no benefit from the enduring low economic growth rates, they have lost wealth, jobs and income while investors have preserved their wealth and accumulated even more. Wealth funds will not release money under their control unless there is a high return on capital. Except for government bonds, no capital provider is satisfied with an annual return under 10 percent. Business plans that do not provide a minimum of 20 or 30 percent return on investments (ROI) are not considered. It is impossible to expect that even rapidly expanding emerging economies will enjoy a double-digit growth rate higher than the rate of return on capital. Now that the numbers are on the table and that the rich get richer, what do we do next beyond debating the facts any further? (Do you make money and then contribute to society; or do you make money because you contributed to the development of society?)
When I read r > g (r is the rate of return on capital, g is the growth rate of the economy) the question that should immediately be raised is how this simple equation could be inverted to generate the opposite: r < g. (How to evolve from r > g to r < g ?)
It is impossible to ignore the fact that poverty is spreading in absolute numbers. Even worse than poverty, youth unemployment is on the rise across the globe. This parameter is hitting alarming rates and indicates that the next generation has a limited opportunity to earn a minimum wage required to take care of a family. This means that poverty is not only on the rise, but it is likely to stay. Jobless youth is not limited to thedeveloping world. Countries like Spain, Italy and Greece have more than 50% of their most dynamic members of society left idle. Palestine is in a stranglehold that puts 98% of all the young people under the age of 26 out of a job. It is an unacceptable waste of human resources when an increasing number of trained and eager youth members are told that their willingness to work, their skills and passion are not needed. Governments accept this hardship and hide behind the need to pursue austerity while pursuing the impossible task to balance the budget. Corporations and the wealthy claim that the growth rate is too low and that consumption needs to pick up first before they can fund initiatives that carry a low risk and a high rate of return.
We need to ask ourselves how much more patience we are expecting from poor people? A mother whose children are going to bed hungry every night and a father who sees his teenage sons making rockets to shoot across an illegal fence cannot be satisfied with a promise that all will improve within a few decades, when corrupt governments have finally been removed and when free trade agreements have finally been agreed upon to provide access to cheap goods worldwide. Instead of embracing globalization, a system that has not succeeded in responding to the needs of all, the only option seems to empower poor people to care for themselves and design solutions with what they have. This requires a redesign of the business models that are able to respond to the basic needs, especially of poor people, while offering a reasonable return to investors. Many traditional economists consider this impossible. The Blue Economy demonstrates with one case after the other, that this approach does offer the chance to grow the economy from the bottom up.
Models to Empower the Bottom of the Pyramid
When there is rampant poverty and billions of unmet basic needs for water; food and nutrition; housing and community; health and healthcare; energy; waste management and mobility; education and culture; how is it possible that some claim there is no demand? How could free world trade ever ensure healthcare for newborns when the nation standing behind free trade has a hard core of politicians who reject any form of health insurance for the poor?
The typical response is that there is demand but no money. Prof. C. K. Prahalad and Stuart Hart demonstrated in their article that was first published in 2004, how 3 billion people who survive on $2.50 per day represent a staggering 2.7 trillion dollars in cash each year. The bottom of the pyramid does represent a market ready to be integrated into formal economy. How do we tap into this vast purchasing power with traditional business models and finance that has high expectations for its minimum rates of return? It is not easy for a traditional corporation to imagine how to transform themselves.
For example, Unilever was inspired by the “Fortune at the Bottom of the Pyramid” and put shampoo into small affordable sachets instead of the large bottle that is beyond the means of poor people. These micro-portions of shampoo are sold through network marketing and tiny neighbourhood stores. These initiatives do not empower poor people, nor do they provide access to quality products at competitive prices. On the contrary, the incursions into these emerging markets drain money out of these marginalized communities that have never used synthetic shampoos with artificial coloring and odors, in addition to polluting their scarce water sources. This shampoo rather fuels the enterprise’s drive to ever higher economic scales and better margins.
The strategy is to build up consumer acceptance and brand recognition so that the local distributor can soon be approached for selling more from the same vendor, or be replaced by large chains of distribution.
The Need to Change The Business Model
Over the past 20 years, I have been looking for better models than the best we have been able to imagine to date. This is not another critique but rather a search for the better. We can lift poor people out of poverty and reverse the trend of “the rich getting richer” by changing the business model beyond tweaking the present one. We need to design something completely new. It is surprising how few people are aware that inclusive growth in a sustainable society requires a dramatically better performance at all levels of the business model, not just the technology. This stronger performance is also within reach. However, so few are prepared to question the prevailing business models that aim to cut costs and few question the drive towards free trade and globalization, which is myopically considered to be the only opportunity to ensure growth and is therefore heralded by the traditional economist as the panacea for all socio-economic problems.
I am surprised that people still believe that “the free market” in general, the free flow of capital with investments in search of high rates of return, would turn the poverty trap around and one day resolve the unemployment challenge, while aid would soften the sharp corners, and scientific breakthroughs like nanotechnologies, genetic manipulation and smart grids will do magic that the market could never achieve. We have to realize that whatever we attempted with the best of our intentions is not making a fundamental difference for the three billion people living in poverty and the one billion living in complete misery without dignity. Worse still, we seem prepared to accept poverty as a fact of life. Instead, we should design, create and implement competitive business models that are capable of responding to the basic needs of all through a smart-growth strategy that we call “Blue Growth” and others call “Inclusive Growth”. If you do not like the colour or the adjective, then change the name and just focus on implementing new business models. (We need to recover leadership at the entrepreneurial level. We need a dramatically better performing business model.)
We need to place our primary focus on the business model and aim to recover the leadership at the entrepreneurial level. Macro-economic trends are the amalgamation of decisions taken and initiatives undertaken at the micro-economic level. So instead of attempting to mainly guide the world from the cockpit of a plane influencing interest rates, tax policies, currency exchanges and trade, while unilaterally deciding to flood the market with additional cash through a technique known as quantitative easing, we need to turn the economy around on the ground, starting where the needs are most urgent in places like the shanty towns in Asia, the townships in Africa, favelas in Latin America, and the unemployed everywhere. Let us call these the “Corridors of Growth”. How can we create and implement an inclusive growth strategy where not only basic needs are met, but where benefits are derived from integrating poor people and unemployed youth into the economy and a caring society, while also creating wealth for the most needy?
The Present Economic System: Incapable of Delivering to Poor People
It is critical to look at the reality today: the market economy is not capable of delivering to poor people. If the market is not capable, it is because the present business models are not capable. The result of the incapacity to deliver is that poverty and unemployment are the rule and must be accepted; that is hard to accept. The key economic players have adopted the logic of the economies of scale, searching for ever lower marginal costs while balancing quality with price to stimulate sales and obtaining higher profits, thus offering a better return on capital. Since the top priority is to always offer higher returns and lower costs, the economic system has turned into a harsh one where laying off people for the sake of productivity is the norm.
In order to create ever higher economies of scale for standardized products, there is a need to eliminate trade barriers. Free trade has been the name of the game, providing for free movement of goods, services and capital. At the same time, there is no free movement of people. Boundaries have never been more difficult to cross and issuing a visa has turned into a business of its own. When goods, services and capital are expected to move freely across boundaries, then the challenge is to remunerate people sufficiently within that “globalized” economy, so that they can overcome their poverty trap and lose the desire to emigrate at whatever cost. Those who see no exit, knowing that their parents and grandparents did not find any either, will find an exit as refugees in high-risk emigrations, violence, drugs, fundamentalism and terrorism.
The globalized economy claims to balance demand and supply through setting a market price. The modern economy has subjected everything to “a price setting” including something as necessary for life as water. This resource used to be a commons that was provided for free by nature and society; now it carries a price. Thus there will always be millions of people who will never be able to access basic goods and services. If we agree that the global model of product and service delivery is incapable of reaching poor people (otherwise they would not be poor and living in misery), then we need to ensure that people in those “corridors of poverty” can respond to their own needs with what they have. This is not in defiance of the globalized economy, but it is rather a response to the incapacity of the present globalized economy to be inclusive. If this delivery process fails by design, the only option we have is to change the model and implement a market economy that performs better.
(Since the market economy is not capable of delivering to poor people, poverty and unemployment are the rule.) The immediate reaction to this straightforward conclusion is that “this is not possible”. The explanation is that if this were possible, then it would have been done a long time ago and would have been scaled up to reach everyone. However, if new business models are fundamentally different, then what was ever practiced before? It is therefore unlikely to have a global acceptance at first sight. It took the free trade economists Adam Smith, the author of “The Wealth of Nations”7, and David Ricardo, the inspiration for the theory of comparative advantages8, over a century to see their theory prevail as a dominant economic logic. Neither of these two economists had access to statistics or empirical data. Why is it now necessary to deliver proof of concept at a worldwide scale immediately? This is why The Blue Economy is committed to building up microeconomic case studies before we derive macro-economic conclusions.
Respond to Basic Needs and Circulate Cash Locally
Business models that respond to people’s basic needs with what is locally available could improve livelihoods. However, the money earned cannot be drained out of the community, as is the case now. Rather, the hard-earned funds should continue to circulate within the communities. If people have earned one hundred dollars, then this cash is used to alleviate their most urgent needs . The money must be spent locally and the most very basic needs should b e sourced locally as well; this creates a catalytic effect in the local growth cycle.
The Double Digit Growth Model:
(1) Respond to basic needs
(2) With local products and services, and
(3) Circulate the cash in the local economy
As more money circulates faster, the locally produced portfolio of products and services diversify further so that added money moves faster and more is kept in the local community as capital. This is a possible double-digit growth model. If the money is not circulating within, then cash brought back from work will flow out of the community, in turn stunting growth.
Of course, one wonders how much human resources, capital, materials and energy are locally available to ensure these transformations can be pursued at a rapid rate. Will this proposed double-digit growth lead to shortages, price increases and even imports? Of course there are limitations and there will be challenges, but the present model of standardization and globalization based on an unending drive to cut costs keeps poor people poor since all of their cash spent on basic consumption is flowing out of the community. Do we realize that in South Africa, 34% of the purchasing power of poor people who survive on less than $2,500 dollars per year is reserved for food; those who survive on $600 per year spend 47% on food; and whatever is eaten is supplied from outside of the community?
While many questions arise, the main purpose of The Blue Economy is to develop this inclusive growth concept in more detail and apply it to the creation of new communities in an increasingly urbanized world. We therefore need to present the conceptual development of a real development project in detail, offering insights on how the intention can be converted into a reality. While each of the programmes and initiatives mentioned have been implemented somewhere in the world, the scale of the investment and the magnitude of impact is ready for a large-scale implementation.
The dozens of cases that are published on www.TheBlueEconomy.org offer a glimpse of the science, the entrepreneurs and the patience that enabled us to implement hundreds of ideas into business realities around the globe. It is an honor and a privilege to have gotten this chance to play a role. The question is now, how can we speed up the process and strengthen its impact.
THE DESIGN OF THE BOTTOM-UP SCENARIO
That is why we undertake the "Blue Economy 2.0". Our goal is to steer society towards sustainability, while enhancing the capacity to respond to basic needs with locally available resources. In 2005 the ZERI Foundation initiated a research program in cooperation with the Biomimicry Institute entitled "Nature's 100 Best". Inspired by pragmatic solutions developed by thousands of species, we opened the quest to identify which technology, based on which research demonstrates a pathway towards sustainability. Janine Benyus and her team studied the details of the science behind the individual species which became the basis of the acclaimed website "AskNature.org" with thousands of academic papers. Gunter Pauli and the ZERI teams focused on the ecosystems instead of finding out the scientific details of isolated species and derived from it new business models. The two organizations parted, and ZERI maintained a strong focus on entrepreneurship, innovations, job generation and meeting basic needs with available resources. This focus offered fresh insights in economic development known as "The Blue Economy", a Report to the Club of Rome that was first presented in Amsterdam in November 2009. This report has been translated in +30 languages.
How the Quest is organized
The ZERI network of organizations, known as the "Think Tanks" and the emerging Blue Economy network recognized as the "Do Tank" tracked the original one hundred cases. Through an intensive program of monitoring emerging science and businesses, dialogues with academia and practitioners, interactions amongst committed individuals and institutions from around the world as well as exchanges of experiences, the isolated technologies, the pioneering scientist and the daring entrepreneurs evolved from inspiring stand-alone cases into networks of academia and clusters of businesses. As these clusters of local economic growth were documented systematically, a transparent world of interconnected innovations and successful capital raising combined with smart adaptations to local conditions demonstrated that a new economy is emerging. These newly documented cluster cases are posted on www.TheBlueEconomy.org.
The Shift from Old to New Business Models
Growth in the economy has been elevated as the prime target of life, and attaining growth is equated with improvements in productivity and efficiency. The much heralded free trade and the elimination of tariff and non-tariff obstacles secure the unrestricted flow of product, energy and services (but not people!). The goal is to cut costs and reduce prices under the generally accepted theory that lower prices improve the buying power and increase the wealth of people. This model has certainly led to the creation of wealth, but it also has led to a persistent unemployment, especially amongst the young.
Furthermore, ample evidence has been gathered to demonstrates that "the rich are getting richer and the poor are getting poorer". While this statement has been widely contested by academia and policy makers, the hard reality of the statistics indicate that while improvements in wealth creation can be pointed to billions cannot access basic services. Worse, the dominant economic growth model does not reach poor people in general and the young in particular.
The economic proposal of the Blue Economy suggests a different approach, which still pursues a growth strategy but starting with locally available resources and leveraging the buying power of people, especially those who survive on one dollar per day, as well as governments The quest for development evolves from improving productivity to reduce costs, to improve productivity by generating more value from existing materials, nutrients, and energy. Resource and energy efficiency leads to reduced costs. The driving force are the millions of minute expenses that respond to immediate basic needs. Locally produced water, food, health and housing requirements generate local jobs, increase revenues, decrease the need for transport and channels local purchasing power into the local economy.
The faster circulation of money, bypassing banks through local currencies or digital monies stored on cell phones speeds up the flow of money, triggering further economic growth. The capacity to deliver urgently needed products and services lifts people out of poverty while competing against global companies. Poverty and unemployment are a confirmation that the global economy does not reach that segment of society, and that there is no local economy to substitute that lack of primary, secondary and tertiary activities. So if we wish to eliminate the shanty towns, then we have to create the local economy, and redirect the existing one that drains all cash out of the community, to one that circulates money in the community and creates
New social capital
Changing the Framework
These new business models part ways with what is taught in business schools, and fundamentally differ from the economic growth models promoted by traditional economists. Indeed instead of a core business based on a core competence, these Blue Economy cases have multiple cash flows generated by cascading matter, nutrients and energy offering multiple benefits to society. Companies make money, because they respond to the basic needs in the communities, as opposed to companies that make money by selling their products and services irrespective of the importance and the value to society, and then contribute to society once they made a profit reserving a part of their profits. The focus is not on cutting costs, or economies of scale, rather it is on generating value using available resources. The result of this bottom-up approach is that there is less need to operate and compete on a global scale, and that the impact on society can be measured in the accumulation of social capital, food and water security, decrease of greenhouse gas emissions, the creation of jobs, while being competitive and building up resilience. One of the key parameters of success is the improvement of purchasing power, especially amongst poor people.
Celebrating Clusters of Innovations
An internal review by the "Think Tank and the Do Tank" came to the conclusion that it is timely to summarize the developments of the past 6 years. This led to the design of a program to write and publish the next 100 cluster cases of the Blue Economy. Instead of celebrating an individual with a unique science and a start-up, the Cases 101 to 200 tell the story of how it all started and who inspired each case, celebrates the researchers from the Think Tank who contributed to the strengthening of the science, and points to the groups of entrepreneurs who are converting this know-how and wisdom into growth companies that successfully raise money, employ staff and bring new products to the market. When the first seven cases were written and mapped on the globe, the green squares (science) and the blue dots (entrepreneur) quickly filled space on all continents.
We can highlight which initiatives are successful, and what makes them so different from the traditional development model.
Thousands of Researchers and Thousands of Start-ups
Now that the next 100 cases are in production, we can fast forward to the end of 2016 and the beginning of 2017 where more than a thousand researchers are identified by name, institution and subject of research, as well as thousands of companies that are pursuing this clustered approach. This map, which we call the bottoms-up steering of societies towards sustainability, demonstrates that the Blue Economy has moved from an interesting set of anecdotes to a visible trend, with common denominators. It is against this background and pioneering work that the ZERI network in cooperation with the Club of Rome, wishes to undertake the next step: deepen the clusters with more detailed information on the social impact, the technologies, the environment including biodiversity and ecosystem services, the job generation and the shift in skills, the educational transformation, the resource efficiency. We have to strengthen the participation and have reached out to transversal research organizations that could bridge this need.
From a broad wave to a deep understanding
The objective is that the briefing that ZERI supplies per cluster (101 and onwards) is expanded to perhaps 100 pages covering in detail the elements that are required to grasp in detail the opportunity to impact both the local realities in terms of livelihoods, as well as the global sustainability and resilience. This "deep dive" is only possible in cooperation with the leading research institutions which have signaled an interest to participate including The Club of Rome, Development Alternatives (India), Monterrey Institute of Technology (Mexico), Wuppertal Institute (Germany), Stockholm Resilience Center (Sweden), MISTRA (South Africa), and the Chinese Academy of Sciences (e.g. only).
From a detailed map to an interactive mathematical model
The findings will offer over a period of 2 years a detailed map, science data, business numbers, social and environmental statistics. This will then be translated into a mathematical model based on the well established systems dynamics that allows the charting of the impact of these clusters of small initiatives based on fundamental shifts in business models that steer societies towards sustainability. This model then asks the questions: what are the policy options for local and national governments, multilateral institutions, financial organizations, research networks in order to speed up the transformation that is emerging. It is expected that approximately 2 years will be required to fine-tune this model, permitting us to present it by the end of 2017, early 2018 "The Bottom-Up Scenario".
The Bottom-up Scenario
The Bottom-Up Scenario differs fundamentally from the traditional Club of Rome approach. Instead of working through macro-data at a global scale, we work through thousands of local facts, shifts in business models that are like embryos. However the hard facts, and the pragmatic measurement of impact, allows us to take a fresh approach to the world challenges standing on the pillars of science and entrepreneurship (risk). This would lead to a series of scenarios that provide the immediate opportunity to move from scientific discovery and policy measures, to applied research and the inspiration of entrepreneurs like it has happened with our coffee waste to mushrooms project which now accounts for at least 2,000 enterprises across the world.
The urgent transformation of the theory of economics and the science of business
Doing less bad - is not good
The onslaught of bad news about the environment, poverty, unemployment, human rights abuses and the inaction of policy makers combined with the business as usual approach by corporations leaves many concerned citizens baffled. The data before us are clear: climate change is advancing, there is no chance to absorb the hundreds of millions of unemployed youth while competitiveness of most of the nations around the world continuous to erode. The only solution economists imagine to all the problems and the wrongs is growth driven by more consumption for which citizens are expected to accumulate more debt.
There is a lot of time and effort spent on the analysis of all available information. While many desperately search for alternative solutions, there is not one, or a few that seem capable of reversing the negative trends. There is a blind belief in one solution: growth and those nations that lack growth should first pass through a period of austerity. Every expert approaches the bulk of information from her or his perspective framed in a clear silo, robbing the world of the knowledge that is required to create a vision indispensable to design a fresh and effective pathway forward. This article attempt to open our minds.
The lack of comprehensive knowledge of how economic and social systems operate leaves no space for the wisdom urgently needed to mobilize the best minds and the committed individuals to evolve from analyses of the unfolding dramas to a pragmatic portfolio of initiatives. In my view, too much effort is reserved to analyze the problems, to theorize solutions and fiercely debate these options as if the prevailing theory is considered a dogma. Hardly anyone focuses on the demonstration on the ground that it is possible to outcompete the present growth model by performing better - even according to their parameters of success.
A recent exchange with the Rt Hon Anders Wijkman, co-president of the Club of Rome and one of the thought leaders in policy design towards sustainability, it became clear that few people have realized that analysis and theory, concept development and case studies cannot make a dent in the present negative trends unless there is a fundamental shift in the business model. We should evolve from the logic of economies of scale and cost cutting towards a society that uses what it has, responds to basic needs of all first, and circulates the newly gained purchasing power in the local communities.
Blind Belief in Growth
While we can imagine many shifts and models, there is one factor that determines the corporate world's culture and modus vivendi: the focus on the core business and the unfettered belief in growth ad infinitum. Whatever is imagined, from tax policies, to international conventions, and new innovations to recycling programs will fail to steer society towards an environmental and socially competitive model unless we overhaul the business model itself. While I very much appreciate the efforts by many thought leaders like Walter Stahel, Michael Braungart and Ellen McPherson, and I believe in the best of their intentions and those of many others, their valuable proposals all remain trapped in the logic of the MBA: the Master of Business Administration.
The millions of students aspiring to a better financial reward thanks to their investment in an MBA diploma hardly realize that they are all learning the same business models that was once conceived at the world famous Harvard Business School. The MBA is as much a product of economies of scale and standardization than the industries they are supposed to manage in the future. Everything is translated into financial results, market share, economies of scale and ranking. This dominating model prescribes that you sell what you produce and that growth combined with market dominance will not only offer the best return on investment to the shareholders, it will even align performance through the management of rewards and bonuses. And if the company were faced with pollution scandals or social problems then the system will do its best to cut pollution and reduce the social injustice. We know that doing less bad simply is no good. Business needs to embrace the opportunities to do much better.
This prevailing business model that has guided the corporate world is framed by a simple logic: compete on the basis of price and quality. This core adagio has been translated into the theory and the practice of the economies of scale, with an unrelenting search for ever lower marginal costs through standardization, leading to a dramatic concentration of production with only a few market leaders determining the standards on the market. The obsession to cut costs, especially the reduction of labor input, has lead to a logic which confirms that merging companies that lay-off thousands of workers are immediately rewarded by the stock exchange with a higher stock valuation.
The sheer size of these mega-mergers leads companies to focus on their core business only building on their core competence eliminating all outside activity through outsourcing and a strict discipline known as supply chain management. Let there be no doubt: companies are on a permanent search for low cost and are continuously sacrificing quality in order to ensure growth through multiple consecutive sales. And if this strategy needs to be pursued through the design of service models, then there are the consultants to implement that part of the new strategy to generate more profit and a secure cash flow.
The logic of free trade enhanced the rapid globalization of fewer players through the adoption of this business model driven by lower costs. Amazing, people are prepared to buy 3 refrigerators over 25 years saving 30% on the first one and 50% on the third one, not realizing that over a generation lasting a quarter of a century double the amount of disposable income has been spent on imported cheaper goods than on the "good old local manufacturer" who produced white goods that lasted 25 years and would have offered ongoing opportunities for maintenance services, while dramatically improving resource efficiency and cutting back on the waste management.
The sales and marketing strategies have successfully blinded the customer with a lower price and the promise of the latest innovation, as well as the best energy efficiency not realizing that in the end of the day this strategy leads to the predictable collapse of local industries. Worse, the monies that used to circulate in the local economy are now channelled outside the community leading to a deceleration of local development, a loss of competitiveness and an increase of unemployment draining more purchasing power out of the community. This is where the notion of “under-developing nations” emerges.
The Urgent Shift
The core shift in the business model is to go beyond this relentless cost cutting drive and to embrace a business strategy that aims to generate more value with what is locally available. This fundamental shift requires companies to get out of the straight jacket to only focus on one product portfolio. This is a major challenge, since it is fundamentally different from what MBA’s have been brainwashed to believe is the pathway to success.
The upside is that this new business model offers opportunities to generate multiple revenues with resources that are within the immediate reach of enterprise and entrepreneur. The surprise is that when one generates several income streams from available resources then one can extract its business from the hard game of world market prices! Imagine, farmers and miners can look at the flashing numbers on their Bloomberg screen and relax: it is only an indication of one of their revenue streams and does not decide on life and death anymore.
How often are farmers or small scale producers booted out of the market by overseas competition that can beat the prices including transport, and that finds a ready partnership with local distribution that is indifferent about the generation of local purchasing power? What would the remedy be? It is quite obvious that if the workers' compensation is reduced to one dollar per day, that the European social security is subjected to a free fall into bankruptcy with the urgent call of all industrialists that the market should become more flexible. But even African and Latin American wages cannot match the dumping in salaries that is applied elsewhere in the world.
The call for “flexible labor markets” is a sublimation for a demand to cut labor costs and social security. The elaborate assessment of the competitiveness of nations is determined on the basis of the core business logic where the overall cost performance decides the position on the market. While this game is successfully played by less than one percent of the largest corporations in the world, the remaining 99 percent has hardly any chance of survival. As a result consumers are increasingly purchasing globally sources materials, nutrients and energy provided by a few players who control the capital. Europe seems to have accepted the inevitable demise of its social system and imagines solutions that are based on "more of the same", like the free trade agreement with the United States claiming to create a level playing field for 800 million consumers.
Use local resources first
The new business model which we have tested in over 100 sectors of the economy will generate not only more value locally, it also secures that more money will circulate locally. Better: it outcompetes the present globalized model in return on investment, cash flow, poverty alleviation, and the capacity to respond to the basic needs including jobs without the need for subsidies. Governments can now dedicate time and effort to ensure that there is a level playing field.
We cannot stress enough the difficulty to pursue a smart and inclusive growth strategy in any region or nation when cash is permanently drained out of the economy. When the primary and the secondary sectors are not capable of competing with the prices dictated by the international market, then the hard earned income leaves the local economy engendering an unemployment and economic contraction that has become characteristic of the majority of the Europe and Japan (and other nations). The only way to reverse the trend of high unemployment and the downward spiral of economic development is to ensure the generation of more value added with available resources creates more money that flows through local businesses. While this logic goes against the prevailing dogma of free trade at the macro-economic level, and ever lower costs at the micro-level, based on our experience on the ground, we see no other way to extract societies out of the poverty and unemployment trap.
Well there is another way, that is to dramatically reduce cost of labor, even to embrace social dumping and saddle the government with health care, unemployment compensation and pension costs which translates into an untenable increase of government debt, which is followed up by a long period of austerity in order to keep the tax burden that is already too high for a dwindling working population within limits. Let us not forget that global corporations do not pay taxes, and therefore the burden is squarely on the shoulders of the citizens only. Now if we accept that the increase of government expenditure, and the widening of the government deficit beyond the 3% of GDP are not options to embrace, then there is an urgent need to change the rules of the game because the present correction to the misguided spending has only one option: austerity.
Thus the first and foremost rule of the game that needs to be changed is the shift from "ever lower costs" to "ever higher generation of value" with what is locally available. The ZERI Foundation which is in reality a network of organizations throughout the world, has demonstrated through study and practice that this shift is not only viable, it can be implemented short term. We have seen the mobilization of €4 billion and the implementation of +100 projects that generated 3 million jobs and embraces this logic with such ease. The pursuit of value - and not the urge to cut costs - very quickly brings additional products and services to the local market which can also and quite easily outcompete the internationally traded merchandise. This puts the local economy into a growth spiral that goes beyond overconsumption of scarce resources. This is counter- intuitive, yet easy to explain.
China is the leading supplier of photovoltaic panels to the world. The cost per unit has dropped so low that it is within cents of competing with traditional sources of fossil fuels. However, an innovative technology from Sweden permits the combination of energy from the PV, with hot and cold water generated by the capillary pipes inside a sandwich of PV. This is a thicker panel that now is strong enough to be the roof, instead of being put on the roof provided that the base is heat resistant, ideally made from recycled heat resistant plastics offering more jobs since this substitutes aluminum. The cascading of benefits continues since now water is stored at high temperature, not only killing bacteria, but also storing energy, replacing the batteries that all too often make renewables uncompetitive. The break-even of local assembly is reached with only 200 units per month sold. The combination of all these benefits translates into a cost per kilowatt hour that is a fraction of solar. This is not a game of beating the Chinese PV makers on cost, it is winning the competitive game by generating so much more value! It is not surprise that Solarus won this year the innovation price for process industries in China!
The coffee case has been at the core of our work for the past 20 years. The recent developments amply demonstrate this internationally traded commodity has a tremendous growth potential that goes way beyond the cup of coffee. Both at the farm and in the city, coffee waste can be converted to a substrate for mushrooms. The spent substrate, the left-over after harvesting the mushrooms can be converted to animal feed, generating three revenues instead of one. Now the cost of protein (mushroom and animal feed) is lower than the cost of imported food and feed. Better, this generates local jobs and local income. Whereas this program has been dismissed as too little too late, we need to remind ourselves that the worldwide volume of coffee waste surpasses the 10 million tons, good for 10 million tons of mushrooms and 4 million tons of animal feed, all produced locally. And now new biochemical industries have emerged selling UV protection and odor control. If one could earn the same per ton a soy today, then the triple income stream adds another 14 billion dollars to the coffee economy, a cash that not only comes in, it is a cash that does not flow out of the local communities!
Any Change is Hard
Large corporations have great difficulty to embrace this multiple revenue model, incapable of explaining to the financial analysts on the stock exchange their shift from a core business to a multiple cash flow model beyond the established markets. This situation is exemplified by Nestlé’s response to the opportunity of mushroom farming. Indeed, the largest coffee processing company in the world, with an guesstimated 3 millions tons of waste, decided to recover energy from coffee waste, reducing its reliance on fossil fuel. Whereas the generation of power from waste figures prominently in its sustainability report outlining the performance of this food group to cut its carbon emissions, it inscribes itself into the traditional logic of cutting costs. This case would be celebrated in the traditional business logic. Waste that needed to be discarded at a cost now generates power and adds to the bottom line. This fits perfectly in the prevailing business model where the company demonstrates its social and environmental responsibility by “doing less bad”! Would it be possible to convert the strategy to one that is “doing more good”?
Imagine that Nestlé would have shifted from the "cost cutting" to the "value generation" model. The financial, social and ecological benefits from burning a few million tons of coffee waste would look very pale compared to the generation of healthy food at low cost (edible mushrooms offer a healthy nutrition), and the provision of feed for animals that now rely on the importation of soy from Brazil or the conversion of slaughterhouse waste. One does not need to be an experienced economist to quickly calculate the impact of mushrooms and feed on the local economy. The internal opposition to the proposal cites first that mushrooms are not one of Nestlé’s businesses. Second, we often hear in the grapevine that mushrooms are not part of our daily diet. Our response is that hamburgers and corn flakes were not part of the daily food intake either. However, the greatest obstacle the pervasive logic of the food and feed proposal is that Nestlé has determined it is not in the mushroom nor in the animal feed business. Therefore Nestlé will not pursue this chance to add a few billion dollars in turnover.
We realize that companies are not prepared to embrace this business model, and the millions of MBAs who leave the thousands of business schools around the world are all impregnated with the same logic streamlining competition with the search for cost cutting as the safe way to improve cash flow. This imposes a tight discipline on the supply chain enforcing strict adherence to the financial objectives outlined in budgets, reducing the number of suppliers and putting the screws on only price negotiation. These budgets determine the management's bonuses and so secure that everyone performs as is expected. Whatever insensitivity that may be perceived is then quickly overcome through a corporate social responsibility program that projects the company as a responsible citizen even when it just reneged on the opportunity to generate thousands of jobs and provide millions of tons of quality feed at local cost stimulating the local economy with readily available resources and helping to stamp hunger out of this world - not through genetic modification that puts the seeds in the hands of a few producers in the world - but rather by using readily available resources.
We need to shift from the present model to an inclusive growth model, and that can never be achieved through massive additional taxation on citizens nor by a forceful austerity program throwing thousands out of a job, cutting pension plans and reducing health care programs. Time has come to accept that the only way forward to change the way we do business. That will require more than one economist who is preaching to the converted, it requires a minimum winning coalition ready to demonstrate on the market that this new model can outcompete whatever has dominated the logic until today. After all, we are not against anyone or anything, we are in favor of much better.
La Economía Azul aplica el código abierto, mientras fomenta el espíritu empresarial positivo
Cuando tienes soluciones que llevarán la sociedad a la sostenibilidad, capaz de responder a las necesidades básicas de todos por agua, alimento, vivienda, cuidado de la salud y energía, ¿realmente querrías ser el dueño exclusivo y obtener beneficios principalmente para ti mismo? Cuando creas un concepto que aclara la lógica y la práctica de direccionar negocios y comunidades hacia la sostenibilidad, ¿realmente deseas restringir su uso mediante marcas, acuerdos de licencia y hasta modelos de franquicia, impidiendo así a otros implementar soluciones probadas a menos que los participantes te paguen una regalía? ¿Tiene algún sentido hacer dinero primero y principalmente para uno mismo antes de crear puestos de trabajo y valor en una comunidad? ¿No hemos aprendido que la promesa de hacer donaciones una vez el ego ha satisfecho sus necesidades egoístas crea dependencia, mientras que empoderar e invertir en la capacidades de las personas para avanzar en pos de su bienestar es el camino para erradicar la pobreza ?
En los últimos 20 años de trabajo, siempre hemos perseguido el concepto de código abierto con nuestro trabajo, y he compartido los modelos de negocio innovadores libremente. Esto no nos impide respetar las patentes individuales y los derechos de propiedad intelectual (PI) asociados con el trabajo duro y creativo. El respeto por la PI no significa que no pueda compartir los avances en el modelo de negocio diseñado en torno a clusters de innovación, creando múltiples ingresos que van más allá de la tecnología. Mientras que yo poco juego un papel en el desarrollo actual de las tecnologías, mi experiencia es generar dramáticamente mayores ingresos con los recursos disponibles a nivel local. A medida que el pastel se hace más grande, la distribución es más fácil y la participación de todos es positiva.
Muy a mi pesar, crecer el tamaño de la torta tiene un efecto secundario negativo que no puede ser ignorado: las grandes ideas en el campo de código abierto atraen la atención de gente que quiere considerarlas como una oportunidad exclusiva suya a pesar de que todo haya sido compartido con código abierto y sin restricciones. La descarga gratuita de ideas, experiencias y conocimientos hace que algunos individuos deseen un esquema exclusivo para hacer dinero. Y ya que nosotros rara vez queremos hablar de lo negativo, es oportuno abordar la manera de manejar esta situación desagradable sin caer de vuelta en lo negativo, ya que esta explotación ha surgido entre personas que pensamos eran protagonistas del código abierto.
Tomemos el caso de Chido Govera, quien aprendió a cultivar setas a la edad de 11. Gracias a una pequeña subvención, ella y algunas compañeras huérfanas fueron expuestas a la oportunidad de cambiar su situación de víctima por la de líder de la comunidad que sabe cómo proporcionar seguridad alimentaria y recuperar la dignidad. Aprendimos a nuestro pesar que estas huérfanas son abusadas rutinariamente. Sin embargo, en el momento en que ellas pudieron conseguir su seguridad alimentaria, el abuso simplemente no fue tolerado más. Chido obtuvo su libertad a través de la perseverancia y el trabajo duro con el apoyo de una amplia comunidad local e internacional que creía en ella. Ella exploró el mundo de las setas desde recuperar especies silvestres como recurso genético, hasta el cultivo de tejidos y técnicas de cultivo simplificadas, mientras lidiaba con su propio estrés post traumático agudo. Chido concluyó tras más de una década de exploración, que quería dedicar su vida a mejorar la difícil situación de los huérfanos en África, especialmente en su país de origen, Zimbabwe.
Chido tiene un destacado historial en aprender, compartir e inspirar. A través de los años, construyó un nombre genuino y fama por perseguir y hacer el bien, mientras superaba sus traumas personales. Ella trabajó con escuelas en la India, agricultores de café en Tanzania y Colombia, comunidades remotas de Ghana, mientras continuaba su desafío en aprender más acerca de las setas a través de cursos intensivos en China adaptados a su interés en los hongos medicinales. Chido quiere hacer el bien y obtener resultados sobre el terreno en el Norte como en el Sur. A través de sus programas prácticos de capacitación, Chido ha ahorrado cuidadosamente sus escasas ganancias que le dan la oportunidad de invertir en un sueño: crear un centro de formación para los huérfanos en Zimbabwe.
Ahora, ¿podrías imaginar que alguien quisiera apropiarse de esta rica experiencia de vida y de visión para el futuro a través de un trademark bajo la marca "Setas de Chido" y después convertir esta imagen en un modelo de franquicia sin el involucramiento detallado de Chido, para finalmente venderlo a los clientes con la promesa de que "un día" la comunidad de los pobres en alguna parte del Sur se beneficiará de una parte de los beneficios obtenidos con los ricos? Muy a nuestro pesar, este no es un caso hipotético, esto es una realidad. Mientras Chido (y muchos de nosotros) cree automáticamente en las buenas intenciones de todos y presupone automáticamente que quien se beneficia de su bondad sería corresponderle a ella siguiendo la misma línea, la dura realidad nos enseña que esto no es, por desgracia siempre el caso. Las excepciones confirman la regla.
Si bien estamos profundamente afectados por esta falta de continuidad en la cadena del bien, la pregunta que debemos plantear después de despertar a esta dura realidad es "¿cómo podemos evitar que los que disfrutaron del acceso de código abierto a Chido (y otros), no adhieran a la misma cultura ? ¿Cómo nos aseguramos de que los que se benefician sean igualmente generosos? Chido siempre estará encantada con propuestas de organizar estructura y disciplina para las decenas de peticiones que recibe para que comparta su conocimiento y llegar a públicos más amplios. Entonces Chido estará encantada de explorar mecanismos de cooperación para entrenar, compartir e incluso invertir sus propios recursos para crear plataformas de difusión del bien común para más personas.
Aquí es donde surge un dilema basado en las experiencias negativas: " ¿Confías en las personas que se involucran contigo para adoptar el código abierto y la cultura de compartir, o recoges esta relación desde el principio dentro de un marco jurídico estricto para proteger la forma de vida del código abierto? " Todos sentimos que el alboroto legal a partir de acuerdos de confidencialidad, acuerdos de exclusividad y licencias de marcas es contraproducente y socava el enfoque entusiasta donde a uno le gustaría creer que el "otro" entiende el espíritu y la cultura del enfoque de Chido.
Para nuestro pesar – y el de Chido no es el único caso - nos dimos cuenta con el tiempo (y demasiado tarde) que el único interés de los supuestos socios europeos era su nombre y fama. El objetivo final de estos socios era embarcarse en un negocio bajo el pretexto de una empresa social. La dura realidad es que su propuesta no era (ni es) para nada social. Cómo se siente uno cuando el núcleo de la empresa se reduce a cumplir una estrategia de marketing y un plan de financiación pre-determinado que se basa en la exclusividad bien reforzada a través de marcos legales como los contratos de franquicia. Aquí surge la primera dicotomía: Chido (y la Economía Azul) cree que la tecnología de base puede ser la misma (es decir, las setas de la granja en los desechos del café), sin embargo, el desarrollo del negocio debe adaptarse a las oportunidades locales y por lo tanto puede llevar a modelos de negocio totalmente diferentes, incluso en una misma ciudad. Por lo tanto, no se puede estandarizar nuestra estrategia de código abierto en un contrato de franquicia .
Cuando uno se da cuenta de que un enfoque personalizado está forzosamente estandarizado mediante la explotación de una historia apasionante como llegar a los huérfanos a través de una estrategia de comunicación superficial, cuando encima de eso, las decisiones de plataforma se realizan sin la participación de Chido mientras que una estrategia de fondo es adelantada por una dama que se posiciona a sí misma como emprendedora social local, entonces es obvio que Chido es explotada. Está claro que no hay otra opción para Chido que separarse de este equívoco. Cientos de amigos desde España, los Países Bajos hasta el Reino Unido fueron testigos de la pérdida de la ética en este negocio adoptado por unos pocos y se comprometieron a liberar a Chido de este corsé.
Situaciones como éstas son difíciles -especialmente para los que han creído en servir al bien común mientras generan ingresos personales. Ahora bien, esta situación se vuelve aún más difícil de tolerar, cuando quienes explotan a Chido han sido expuestos públicamente por Chido, y luego por una red de amigos y simpatizantes estrechamente tejida. Los autores no encuentran una forma más inteligente de reaccionar frente a la demanda para que detengan el mal uso del nombre y la fama que llevar cada persona a la corte lo que habla en contra de este tipo de esclavitud del siglo 21. Las frustraciones asociadas a la diatriba legal en contra de casi una docena de personas no pueden ser respondidas con más contrademandas legales en nombre de la defensa. Entonces, ¿cómo reaccionas? Podemos reformular esto: ¿cuánta justicia a través de tribunales buscas para este flagrante abuso? La clave, primero, es permanecer fiel a tu ética propia y segundo, aprender las lecciones asociadas con esta desafortunada experiencia.
Hay que evitar convertir el mal comportamiento del otro en mal comportamiento de uno mismo. Creo que no es necesario buscar la justicia por nosotros mismos, ya la justicia llegará. En lugar de tratar de tomar la iniciativa para responder a esta forma de agresión con otro tipo de agresión, vamos a centrarnos en hacer mayor bien. Considerando que este enfoque de no violencia se ha descartado por ingenuo, es importante que abrazamos y reiteramos nuestro conjunto valores cuando no apoyamos el ojo por ojo. Queremos garantizar que todas nuestras energías permanezcan bien enfocadas en lo positivo. Cuando aquellos que anteponen sus propios egos e intereses económicos por encima de los comunes, perdemos la energía positiva de unos pocos individuos que creíamos erróneamente con nosotros. Si además de la pérdida de unos pocos nos disponemos a canalizar lo mejor de nuestras energías combinadas en tornarnos también negativos, entonces el mundo es perdedor neto.
La comunidad de código abierto debe desplegar una respuesta a estos abusos permaneciendo ausente de toda forma de violencia (incluso legal) y debe canalizar toda la energía hacia la implementación rápida y amplia de más y mejores iniciativas. Aún más, el abuso de la confianza de unos pocos no puede ser respondida reteniendo la confianza de los nuevos interesados , ni disponiéndonos ante aquellos que demuestran un gran interés con estrictas documentaciones legal con el fin de evitar el tipo de abusos que acabamos de sufrir. No podemos desviar los recursos financieros y humanos escasos hacia actividades no productivas, ni podemos bloquear el flujo positivo de la energía. Al demostrar exitosamente cómo cultivar hongos en el café puede ser de código abierto y al ampliar las referencias de unos pocos aquí y allá hacia cientos e incluso miles en todas partes, entonces cualquiera en el universo sentirá la energía positiva que se desprende del " Camino de Chido" y la Economía Azul.
A través de la canalización de todo esto hacia el lado positivo, con aplicaciones más amplias , es como el "otro" lado perderá el interés del universo. La atención se dirigirá únicamente hacia los mejores ejemplos de Chido y se sentirá atraída por su enfoque genuino y positivo a pesar de los abusos en su juventud y el abuso comercial ahora en sus años de adolescencia. La cultura negativa quedará expuesta y ese modelo de negocios en última instancia, fracasará. La dificultad de hoy se convertirá en la anécdota del mañana. Esta es la mejor manera de hacer justicia -con una sonrisa y sin pérdida de energía hacia el bien.
Traducción libre: Oscar Ayala A.
The Blue Economy applies open source while encouraging positive entrepreneurship
When you have solutions that will turn society sustainable, capable of responding to the basic needs of all for water, food, shelter, health care, and energy do you really want to be the exclusive owner, and derive profit first and foremost for yourself? When you create a concept that clarifies the logic and the practice of steering business and communities towards sustainability, do you really want to restrict the use through trademarks, license agreements and even a franchise model, thus prohibiting others from deploying proven solutions unless participants pay you a royalty? Does it make any sense to make money first and foremost for one self before creating jobs and value in a community? Have we not learned that the promise of donations after this self has satisfied its egotistic needs creates dependency, while empowerment and investment in the capacities of people to evolve beyond their best is the way to eradicate poverty?
Over the past 20 years of work, we have always pursued the concept of open source with our work, and have shared the innovative business models freely. This does not prevent us from respecting individual patents and intellectual property (IP) rights associated with hard and creative work. The respect for IP does not mean that I cannot share the breakthroughs in the business model designed around clusters of innovation, creating multiple revenues going beyond the technology. Whereas I seldom play a role in the actual development of technologies, my expertise is to generate dramatically more revenue with locally available resources. As the cake gets bigger, the sharing is easier and everyone's involvement is positive.
To my regret, growing the size of the cake has a negative side effect that cannot be ignored: great ideas in the realm of open source attract attention of people who want to consider this as their exclusive opportunity even though all was shared open source without restrictions. The free download of ideas, experiences and know-how causes a few individuals to desire an exclusive money making scheme. And, while we seldom like to talk about the negative, it is timely to address how to handle this unpleasant situation without tailspinning into the negative since this exploitation has popped up amongst people we thought were the protagonists of open source.
Let us take the case of Chido Govera who learned to farm mushrooms at the age of 11. Thanks to a small grant, she and a few fellow orphans were exposed to the opportunity to change their predicament from a victim to a community leader who knows how to provide food security and regain dignity. We learned to our dismay that these orphans are routinely abused. However, the moment they could provide for their food security, abuse was simply not tolerated anymore. Chido gained her freedom through perseverance and hard work with the support of a broad local and international community that believed in her. She explored the world of mushrooms from the recovery of wild species as a genetic resource, to tissue culture and simplified farming techniques, while dealing with her own acute post trauma stress. Chido concluded after more than a decade of exploration, that she wishes to dedicate her life to the plight of orphans in Africa, especially in her home country Zimbabwe.
Chido has a remarkable track record of learning, sharing and inspiring. Over the years, she construed a genuine name and fame for reaching out and doing good while overcoming personal traumas. She worked with schools in India, coffee farmers in Tanzania and Colombia, remote communities in Ghana while continuing her plight to learn more about mushrooms through intensive courses in China tailored to her interest in medicinal mushrooms. Chido wants to do good, and get results on the ground in the North and in the South. Through her hands-on training programs, Chido carefully saved her meagre earnings offering her the chance to invest in a dream: create a center for orphan training in Zimbabwe.
Now could you ever imagine that someone would like to appropriate this rich life experience and vision for the future through a trademark under the brand "Chido's Mushrooms", then convert this image into a franchise model without a detailed involvement of Chido, and ultimately sell it to customers with the promise that "one day" the community of the poor somewhere in the South will benefit from a fraction of the profits made with the rich? To our great regret, this is not a hypothetical case, this is a reality. Whereas Chido (and many of us) automatically believe in the good intentions of everyone, and automatically presuppose that whoever benefits from her goodness would reciprocate to her along the same lines, hard reality teaches us that this is unfortunately not always the case. Exceptions do make a rule.
While we are deeply affected by this failure to continue the chain of good, the question we need to raise after waking up to this harsh reality is "how can we avoid that those who enjoyed open source access to Chido (and others), would then not adhere to the same culture? How could we ensure that those who benefit will be equally generous? Chido will always be enchanted with a proposal to organize structure and discipline for the dozens of requests she receives to share her know-how she reaches a broader audience. Therefore Chido will be happy to explore cooperative schemes to train, share and even invest her own resources to create platforms for dissemination for the common good for more people.
Here is where a dilemma based on the negative experiences emerge: "Do you trust the people who engage with you to adopt the open source and sharing culture, or do you cast this relation from the beginning into a tight legal framework to protect the open source way of life?" We all sense that the legal hoolahoop starting with non-disclosure agreements, exclusivity arrangements and licensing of trademarks is counterproductive and undermines the enthusiastic approach where one would like to believe that the "other" understands the spirit and culture of Chido's approach.
To our regret - and Chido is not the only case - we realized over time (and too late) that the only interest of the supposed European partners was her name and fame. The ultimate goal of these partners was to embark on a business under the pretext of a social enterprise. The harsh reality was that their proposal was (and is) not social at all. How does one feel when the core of the business is reduced to abide a marketing strategy and a pre-determined financial plan that builds on exclusivity tightly enforced through legal frameworks like franchising contracts. Here emerges the first dichotomy: Chido (and the Blue Economy) believe that the core technology can be the same (i.e. farm mushrooms on coffee waste), however, the business deployment must adapt to the local opportunities and therefore can lead to totally different business models even in the same city. Thus, one cannot standardize our open source strategy in a franchise agreement.
When one realizes that a personalized approach is forcibly standardized by exploiting a passionate story of reaching out to orphans through a superficial communications strategy; when on top of that decisions in the platform are made without Chido's involvement while a slick strategy is pursued for one lady to position herself as the local social entrepreneur, then it is obvious that Chido is exploited. It is clear that there is no other option for Chido to separate herself from this misnomer. Hundreds of friends from Spain to the Netherlands and the UK witnessed the loss of ethics in this business venture embraced by a few and committed to liberate Chido from this corset.
Situations like these are hard - especially for those who believed to serve the common good, while generating personal revenue. Now this situation turns even harder to tolerate when those who exploit Chido are publicly exposed by Chido, and then by a closely knitted network of friends and supporters. The perpetrators find no smarter way to react against the demand to stop misusing name and fame than taking every person to court who speaks out against this 21st century type of slavery. The frustrations associated with the legal tirade against nearly a dozen people cannot be responded to by more legal counter-action in the name of defense. So how do you react? Can we rephrase this: how much justice through the courts do you seek for this blatant abuse? The key is first to stay true to your own ethics; and, second to learn the lessons associated with this unfortunate experience.
We must avoid turning bad behavior of the other into bad behavior by oneself. I believe that we do not need to seek justice ourselves, because justice will be done. Instead of trying to take the lead in responding to this form of aggression with another type of aggression, let us focus on doing more good. Whereas this approach of non- violence has been dismissed as naive, it is important that we embrace and reconfirm our set of ethics when we do not endorse an eye for an eye. We wish to ensure that all our energies remain clearly focussed on the positive. When those who put their own economic interests and egos above the commons we lose the positive energy of a few individuals we wrongly believed in. If on top of the loss of a few we were to channel the best of our combined energies into getting negative as well then the world is a net looser.
The open source community must deploy a response to these abuses by remaining absent from all forms of violence (even legal), and channel all energy towards the fast and broad implementation of more and better initiatives. More, the exploitation of trust by a few cannot be answered by withholding trust from new interested parties, nor descending on those who demonstrate a keen interest with strict legal documentation in order to avoid the type of abuse we have just suffered. We cannot divert scarce financial and human resources into non-productive activities, nor can we block the positive flow of energy. By successfully demonstrating how mushroom farming on coffee can be open source, and by expanding the references from a few here and there to hundreds and even thousands everywhere, then anyone in the universe will sense the positive energy that emerges from "Chido's Way" and the Blue Economy.
It is through the channelling of all this to the positive side with broader applications, that the "other" side will loose interest from the universe. Attention will be solely directed towards the best examples of Chido and will be attracted to her genuine and positive approach in spite of the abuse in her youth and the commercial abuse now in her adolescent years. The negative culture will become exposed and this business model will ultimately fail. The hardship of today, will become the anecdote of tomorrow. This is the best way justice is done - with a smile and without a loss of energy towards the good.
The Blue Economy offers concrete perspectives on how to relaunch the economy. The statistics look bad. Unemployment is on the rise, and those who do have a job are hardly receiving a decent pay. Youth unemployment is reaching levels so high that even a sustained growth over years would never absorb the available labor force within a decade. The unemployment levels of youth in Spain (57%) and the inhumane excesses in Palestine (nearly 100% of young under 26 without a job) demonstrates that our present development model and political framework is inadequate. The blind pursuit of economies of scale, where standardized products are manufactured at the lowest possible cost, driven by cheap means of transport, provides conditions where unemployment is a given, even a precondition for the efficient functioning of the market.
The Market needs Scarcity
The market mechanism operates on the basis of scarcity which supposedly permits the efficient allocation of resources. However, in modern day terms this implies that not only employment, but also poverty is a necessary phenomenon in order to secure the efficient functioning of the market. It is a fact that unemployment and poverty are widely accepted amongst macro-economists who peer over statistics especially from the air- conditioned offices of Reserve Banks, World Banks and Monetary Funds. Recognizing the social cost, economist revert to two basic schools for the reduction of poverty: stimulate demand or influence supply. Neither have been capable of addressing the situation, worse political fora like the United Nations are content with cutting the poverty rates in half - never is there a clear dedication to eradicate it. Allocating funds, often under aid programs may have alleviated the hardship of a few. However, the mere dependency on external financial resources has increasingly rendered both poverty and joblessness permanent. This leads me to believe that the market economy as presently practiced sustains poverty and needs unemployment.
Cutting Costs Generates Wealth?
The nexus of the problem is the erroneous belief that cutting costs of production of a product generates wealth for all. The manufacturing of junk at low price has opened a ferocious search for low cost countries where low labor costs and lax environmental regulations combined with the maze of tax havens are preconditions to a competitive position in this globalized economy. Any nation that has the ambition to deliver social services to its citizens and wishes to remain committed to reasonable ecological principles that maintain Nature on its evolutionary path will witness a fast de- industrialization of its economy.
Interestingly enough, our evolutionary economic development model prescribes a path where the primary industries lose importance as industrial activities emerge (and modernization arrives), and even industry become less relevant as soon the service industries become the dominant factor in the generation of value added in the economy. The fact that car companies earn more money financing the sales of cars than their manufacturing has often been heralded as a proof that the transition of the primary to the secondary and the tertiary sector is a natural one. How could we ever have fallen for such preconceived and even perverse ideas that ultimately destroy the very basis on which our economy stands: the community.
Cutting Costs and Community
Another fundamental error is that societies at large have been reduced to consumers with a purchasing power. Communities are not designed to consume at the lowest possible cost. The local economy is driven in the first place by generating more value with what is locally available. Now if we eliminate the primary and the secondary sector by "the grand pathway towards modernity", then communities have little left to generate value in this globalized economy. Hence, any society that is not located in the immediate vicinity of a worldly industrial or trade center will witness a rapid deterioration of the economy, starting with a widespread negligence for the primary sector, followed by an institutional depreciation of the manufacturing sector starting with the educational system that denigrates hand labor. A prolonged shrinking of economic activity leads to a social and ecological disintegration. Hence, the emerging phenomena of violence, drugs and even terrorism. Do we realize that our obsessive pursuit of lower costs has eliminates community, and how we can generate more value locally to sustain it?
Now if the economy is driven by MBAs (Master of Business Administration) who have learned how to eternalize this cost cutting drive against all human and environmental logic, but necessary within the logic of better cash flow, then you have a private sector that has no other option but to cut jobs and get rewarded for it on the stock exchange. The management must search for the cheapest resources and the shortest product life stimulating more demand, while externalizing costs, including recycling. The institutional locking-in of technologies resists fundamental innovations for the simple reason that these breakthroughs endanger one corporation's bottom line. The only way this firm can undertake a humane facelift is by implementing a high profile program for corporate social responsibility (CSR) well supported by public relations initiatives. Whatever CSR projects the large companies pretend to do, the business model on the basis of which they operate is thoroughly flawed from the point of view of the citizens (consumers) they are expected to serve.
From Cutting Costs to Adding Value to What We Have
As soon as we turn the logic from cost cutting to value adding, and once we decide to start with what we locally have, instead of what could be traded from overseas, then we unleash a different dynamic. This approach is easy to observe on islands. Their physical restrictions permit a narrow description of the needs for water, food, housing and energy. It is amazing that islands like Hawai'i with over one million inhabitants a century ago were self-sufficient and now have to import 95% of food and energy. The neglect of local resources, worse, the incapacity to see the local potential which turned invisible through the eyes of a globalized economy, leads to a process of under-development. Communities therefore will face continued levels of high unemployment, worse their culture and tradition will fade in the face of time. Communities die. Is this the age of modernity we all aspire to live in?
The only way to escape from this dead-end is to shift the focus of the economic actors. I am not arguing for an end to the market economy, I am arguing that the obsession with lower costs urgently needs to be balanced by the search for more value added. Now that we have an inventory of +300 projects around the world where solely starting with coffee waste converted to quality mushrooms, it is clear that the local production with available resources does generate jobs, offers healthy food and ensures a competitive industry that uses what is available. It is not since one succeeded to farm mushroom in one business, that we now have the blind trust in getting more mushrooms farmed in standardized facilities. A tree that got to grow 10 meters does not automatically decide to pursue a growth target of 100 meters! The conversion of small local operations into highly automated facilities with little consideration for great taste, where packaging and transportation including temperature controls become the main costs will loose on the market. The opposite, multiple small scale production units will help build community as we have witnessed around the world. The mushroom case may have been the pioneering one, but it certainly is not the only one.
Local Communities Re-Industrialize
The cases we have been involved in demonstrate that a shift away from the core business based on a core competence is the precondition for securing these new levels of productivity whereby it is perfectly possible to increase competitiveness while generating jobs. Now based on the examples before me, a rather interesting observation crystallizes: local communities have the opportunity to re-industrialize. Since any production system requires a continuous supply of materials and feedstock, this process of re-industrialization goes hand in hand with the revival of the primary industries including agriculture, fisheries and mining. Even though most economists would reject the need to revive the primary sectors, I conclude that there is no other option if we wish to reverse the dramatic reality that 25 percent of the young around the world will never find a job. More, if we wish to respond to the basic needs of all on Earth for water, food, housing, health care, energy and jobs - then we will need to improve material efficiency dramatically, and grow the economy. The only option we have to respond to the basic needs of all within the regenerative capacity of our ecosytems is to create value with what is locally available.
The link to the primary sector became obvious when working closely with mining and agricultural enterprises. While Governments have been pushing mining companies to process ore locally, and while agro-conglomerates have been keen on converting produce into ready-to-eat food, the reality is that so much is shipped around the globe for the sake of that one valued ingredient, that local communities are reduced not only to consumers but also to small suppliers of a global commodity managed by world trading companies. The strength of the economy goes up or down with the swings of commodity prices. Still, everyone knows that the price of gold in the form of an ingot is not comparable to the gold paid by an electronic company in the form of dust a few micron thick. The price of rice in bulk paid to a farmer is only a fraction of the price supermarkets command from their clients, knowing that 90 percent of the value added is represented by packaging, transporting and preserving the rice after a thorough quality control. What kind of an economy do we have when the company delivering the packaging makes more money than the farmer?
Going Beyond Core Business
This is why time has come to go beyond the mere search for adding more value to that one sought after ingredient, and rather embark on a design of industrial processes based on the abundant supply of mineral and organic feedstocks with multiple products as output. Whereas the coffee case offers examples in a rural, peri-urban and urban environment, the recent cases demonstrate that this could become a standard. The pioneering case of Novamont converts artichoke thistles (Cynara cardunclus L.) into the feedstock for a biorefinery transforming what once was considered a weed into 6 revenue streams using an available infrastructure of a defunct petrochemical facility. This means that abandoned farmland, because the local population once believed that the future was tourism, can now be productive again, at low cost working with perennials, enticing people to engage in farming at lower capital costs since no irrigation, tilling or chemical inputs are needed, while diverting millions of euros of cash to pay the Middle East for petroleum to paying farmers with local processing. It does not take a PhD in Economics to realize that this process described in less than 10 lines kick-starts a multiplier effect. Since additional income and purchase power is matched by additional production, this is a non-inflationary growth of the local economy.
While we have always been keen to embrace the bio-based economy, I have increasingly become aware that the same logic of coffee and thistles applies to minerals and mining as well. This implies that the link of agriculture and industry is one driver of the economy, mining and industry could be a second one. This is a major breakthrough. Indeed, mining should be practiced the same way as surgeons operate: the smallest possible incision and the least visible scars. Unfortunately, within the logic of the pursuit of more volume at lower unit cost, mining has relied on more dynamite and bolder excavations than on the targeted removal of ore, rocks and tailings. However once mining companies see the value of a smarter extraction that leads to a multiple use of resources through a network of partners, who all complement the core know-how of the mine with the competences required, then a local mine quickly emerges as an engine in the local economy, from farming to processing, beyond the life of the mine itself.
Mining Supports Agriculture?
We typically consider a mine as a detriment to farming. The harsh competition for water is often the prime reason why mines are considered a world apart. The past years have exposed me to sufficient cases to argue even with the fiercest critics that mining must get a chance to reposition itself and become a core partner in modern society. The harsh reality is that we consume excessive amounts of precious, non-ferrous and rare earth metals. Our electronics, transport, energy and medical industry relies on a continuous supply of all types of metals and unless we dramatically reduce our appetite, and improve the urban mining, we will rely for decades on large scale mining operations. And while certain fragile ecosystems should be off-limits for mining, the deposits located in non-sensitive areas should be exploited using the best of all worlds.
This is an opportunity beyond our imagination. When we considered coffee at the outset of the design of the Blue Economy we always insisted that we ingest only 0.2% of the biomass produced by a coffee farmer, thus the potential is factor 500 in case we were able to give value to 100%. Now gold mining goes beyond these extremes. One gram of gold in one ton of rock is only one in a million, thus the potential of mining is either a multiple in disaster or a multiple in opportunities. Now traditionally all waste has been considered a cost, a major cost indeed. The rock refuse deposit as well as the tailing dam typically represent a huge component of the capital cost, and represent a long term liability that makes up a major part of the investment. Imagine that one can eliminate this capital expenditure, while reducing the operational expenses and mitigate the risks associated with these waste streams and their long term disposal.
Mines Make Paper
Today it is confirmed that all rock waste can be converted to stone paper, and most of the tailings dam - after removing the water - serves as an ingredient for the construction industries. Producing paper from pulverized rocks offers an opportunity to produce tree- free paper, manufactured without any water and is 100% recyclable forever. This means that over time the vast swats of land reserved for forests could be substituted by a permanent stock of paper. The cost is now converted into an asset, very much like aluminum cans have ended up on balance sheets instead of mere costs of packaging. The substitution of pulp with stone (and a small percentage of recycled plastics) will free up millions of hectares of land and puts our drive towards food security in another dimension. Mining supporting agriculture seems far fetched indeed but is a reality once we consider the whole system.
Cheap Because of Value
It is along the same logic that we can build hundreds of cases - all demonstrating that an advanced form of material efficiency, generating value from the diversity of materials that any mineral or biological feedstock has, can generate more revenue and jobs in the community. The power of this approach is that it breaks the trend that in order to have higher economies of scale there is a need to invest more capital. Now the multiple revenues generated from one feedstock reduce the requirement for proportionally more capital while it increases cash flow from multiple value propositions. This reduces the cost of the core product - not because you have cheap labor, spoil the environment and exploit tax shelters - because you generate more value. It is even better, this process makes the pricing (and costing) independent of the traditional commodities market.
From the Micro to the Macro
The revolution in the field of seaweeds is a case in point. When China opts for a dramatic reduction of cotton farming, freeing up land and water resources in order to produce more food, the shortfall in cotton fibers is likely to be supplemented by textile materials produced from alginates, extracted from brown seaweeds. Now if countries like Indonesia were to embark on large scale seaweed farming making use of its rich biodiversity of more than hundred species naturally occurring in their territorial waters spread over more than 17,000 islands, then Indonesia could at the same time tackle its strategic deficiency in animal feed.
Today, Indonesia is a large importer of animal feed. If the country embarks on a new growth strategy based on seaweeds for textiles, then the by-product - which will be more than 50% of the feedstock - serves as a key component in a healthy feed supply. The shift from water guzzling and chemical hungry cotton to seaweeds processed without water that provide a solid local supply of animal feed symbolizes the new type of economic development strategy that emerges when the focus is put squarely on generating more value and shifts away from the core business.
The whole stigma of cost cutting and the associated elimination of jobs can be quickly replaced by a development strategy that responds to people's needs with available resources generating income and jobs. While this approach renders commodities increasingly insensitive to the fluctuations on the world commodity markets, it also clears the path for an economy that secures the millions of jobs we never associated with agriculture, mining and manufacturing as we know it today. This new business model represents a renaissance of industry, spurred by the rediscovery of the potential of the primary sector. It is an opportunity for Europe which had given up on economic growth.
Communities Value and Give Value what They Have
If we succeed in relaunching agriculture, mining and manufacturing along the lines described here, then we will be able to respond to the basic needs for water, food, housing, health and energy, while generating the jobs. Better, the new sectors that emerge will be competitive, and outcompete those who stick to the core business model, which means that the jointly generated revenues permit a growth strategy that renders the traditional logic of economics obsolete and drives the economy towards to social and ecological justice based on communities that value and give value to what they have. This is a welcome alternative to the harsh reality of an economic model that considers poverty and unemployment a given in the equation.
Why recycling and renewable energy is not enough to create a just society
Programs to recycle are applauded. The use of renewable energy is encouraged. Eating organically farmed food is hip, and the switch to vegetarian is often considered a major step towards sustainability. While all these initiatives are taking us in the right direction, we need a society that not only embraces the circular economy, the green (or blue) economy, where we all evolve from recycling to upcycling, we need a society that firmly embraces core ethical and universal principles. Ethics is part of the new business model. If we wish to embrace innovative businesses that transform society, then ethics will have to be at the center, otherwise we may meet material needs and abate environmental damage, but our disjointed societies will not be redressed on the basis of more efficient flows of material and energy only.
We are often confronted with the harsh realities of our short sightedness. Biodegradable soaps which rely on palm oil depend on large areas of destroyed rainforest. How can we defend the cleaning up of the rivers in Europe by destroying the habitat of the orangutan in Asia? Vegetarians who promote the consumption of mushrooms certainly reduce the footprint of their protein consumption by substituting animal and animal feed with fungal protein.
However, few mushroom friends realize that the Chinese are fast destroying their oak forest in order to boost the output of shiitake mushrooms. This implies that saving animals could well destroy natural forests. We very often do not realize the unintended consequences we have and therefore we need to think in terms of connections, seeing and searching for the broader impact we have consuming and producing as we do.
While we can easily be concerned about our lack of understanding, and the subsequent errors, we have a lot of engrained routines that do not allow us to fundamentally change our approach to business and the way we live. Let us take the case of fishing. We should assess a few realities of this industry with a deep ethical perspective. First we overfish, we take too much of what can be sustainably harvested. Second while fishing the fish we want, we harvest up to 70 percent of the catch fishes we do not want. While this sound quite stupid, our fishing techniques do not permit us to differentiate. Third, we drag nets around the ocean, often scraping mile long dragnets made from Nylon 6 on the bottom of the sea, killing life for years - even decades to come. To make matters worse, a medium-size fishing vessel will consume 250,000 tons of fuel per year, nearly always subsidized by governments. And, apart from needing energy to drag the nets, a lot of power is consumed to feed the compressors that drive the ice machines. Worse these vessels (and the processing of their catch) consume more water than communities ever have access to.
While this is the standard worldwide, and the problems are well known, it is difficult to change behavior in a world of dwindling resources. While everyone desires more of the same, it is exactly that "more of the same" that destroys ecosystems beyond repair. And while all parties debate the harsh realities of unsustainable fishing, there is one reality that everyone overlooks: female fish with eggs! There is no cattle farmer who will send his cow for slaughter one month before a calf is to be born. There is no fruit farmer who destroys his harvest weeks before fruits are ripe. But all fishermen around the world find it normal to catch females with eggs and throw them along with all other fish on freezing ice. This is one of the most unsustainable acts of modern times and yet, it is never debated nor are attempt has been made to redress this anachronism.
So if we agree on a basic ethical position that females with offsprings should always be protected irrespective of the species, then it becomes clear that we need to change our fishing model. We cannot simply continue to catch fish and submerge it on ice. Basically, freezing temperatures lead to a rapid release of acids attempting to counteract congelation, and while this affects the taste of fish, the freezing approach requires massive energy. In addition to the unethical behavior, the dragging of nets and the production of ice represent more than half of the energy required operating a fishing vessel, with the balance needed for the propulsion of the boat. If we eliminate the production of ice, and find another way of catching fish than with nets, then the energy requirements of any boat will shift.
The new fishing vessel design starts with a catamaran, powered by electric engines. Fish could be caught using a combination of nets and air curtains - just like whales and dolphins do - and are preserved into cold water tanks with temperatures between 2-4 degrees. Energy consumption drops dramatically. We could equip the boat with 4 fixed sails, especially designed for the currents and winds of the region, inspired by the unique designs of the BMW-Oracle ship that won the Americas Cup. When there is no wind, the masts drop and convert the sails in solar panels capable of generating electricity to power engines. The goal is to quickly process all fish into value added products. It is here that an innovative ecographics system permits to check each fish for eggs. A breakthrough technology, much along the same logic as pregnancy tests have been performed for decades, permits the identification of pregnant fishes. Each female with eggs is immediately released from her state of hibernation and put back into the sea water securing the repopulation of the fish stock.
We often loose sight of the fact that a half kilogram female fish could carry up to 500 eggs, whereas a one kilogram fish could have 3,000 eggs. This exponential growth in reproductivity is the main reason why the catching of females is so counterproductive. The experience on the island of El Hierro in the Canary Islands (Spain) permitted to demonstrate that the protection of female fishes through the creation of a UNESCO Biosphere zone provides the opportunity to redress fish stocks within two years, offering from then on an exponential growth in productivity and fish catch. While the fishermen of El Hierro applied the simple approach of total protection of an area known as the egg spawning area, the innovative ecographics approach permits a very targeted selection of all egg bearing females.
The design of fishing vessels that have the protection of the reproductive fishes in mind will shift the logic of the business model. And, as always happens once a direction is chosen, a cascade of additional innovations emerges. A boat that requires no ice, nor power to drag nets, can operate with electric power only. When the boat is sailing with wind, it can even generate power from the woke by applying the same principle as a hybrid car, recovering energy from the brakes - now from the turbulence caused by sailing. This new vessel design is the most sustainable and while it offers opportunities to cut out fuel altogether, it creates chances to translate the subsidies associated with fuel for the fishing industry into financing for the new vessels. Indeed, every government around the world reserves state funding to support fishermen. Now if the new catamaran operates without fuel then the subsidies committed for years to come can be converted into a net present value that takes subsidies (and corruption) out of the equation and puts renewable squarely on track.
The new designs of the vessel which checks each fish for eggs, now processes the whole catch on the boat, thus generating more revenue from filets, Omega-3, collagen and fish meal that is produced from all process left-overs. This allows the processing with seawater, thus saving drinking water on shore and permits the sale of the processed catch prior to landing. This system cuts down the intermediation by middlemen securing that the fishermen, who in the end of the day risk their lives each day, generate at least double the income, and in some cases (especially thanks to the Omega-3) even 5 times their standard revenue. A new boat benefits from a start-up funding thanks to the elimination of subsidies, and enjoys lower risks thanks to the generation of more income with available resources.
This breakthrough design is driven by a simple yet blunt statement when it comes to sustainability: protect the female fish carrying eggs. It is seldom that the drive towards sustainability generates better income and more jobs, while eliminating the dependency on fossil fuels. However, the most important result of this paradigm shift is that more cash is now circulating in the local economy and this generates a badly needed multiplier effect urgently needed to create growth in the local economy exploiting available resources sustainably.
Now, once the multiplier effect kicks in, then one sees the brain-drain back. This project is pioneered in Morocco, a joint-venture between French and Moroccan entrepreneurs. The power of this approach is that highly qualified Moroccan engineers are keen to contribute to this innovative business development operating out of Caen (Normandy, France), and soon they will want to travel back to their motherland contributing to re- industrialization of the economy that could even include the local construction of fishing vessels, a sector everyone had considered long gone and impossible to ever recover. It took a deep ethical shift in fishing - to protect the expecting females - to lead to the relaunch of industries we could not even have imagined.
How to secure that innovations in business help transform society
When I went on record over a decade ago that the only way to transform business is to sack all the MBAs, it created a seldom seen flood of reactions. For the first time I even had to read a series of hate mails. While I know all too well that I did not come to this world to please everyone, it is seldom that my blunt statements hit such a raw nerve. I should have known better. After all the MBA diploma has become the passport to fast track careers in large corporations. It is one of the money making diplomas on offer around the world, both for the students who graduate and the school that offers the diploma for which aspiring career people pay thousands in cash to get all the promises related to this paper chase.
It is time to be honest and transparent: I also thought that an MBA was the best ticket towards a future in business and management. Little did I know in 1980 when I applied with INSEAD Fontainebleau for entry, and for the record, my application was first refused since I had a lousy GMAT (General Management Aptitude Test). It was already clear from day one that I did not fit the prevailing management culture where standardized multiple choice exams determine your qualifications. However, I had my way of persuading the admissions committee. Before I graduated - on the Deanʼs List - it was clear that I would consider this academic degree as one of the major obstacles to move business towards higher levels of competitiveness, to move society towards better health and happiness, and to put nature back on its evolutionary path. What went wrong? I never considered that the MBA contributed to my career path.
An MBA is nothing less than a certificate of brainwash. This is another bold statement, perhaps even more offending than the earlier one. But let us be honest, what do the MBAs learn? We learn to make abstraction of all reality in the world, pursue corporate strategies from technology, to organizational behavior, to product design and marketing in one common language all around the world: cash flow. And while many will argue that the teachings I received in the early eighties is quite different from the modern day MBA courses, reality before me demonstrates that the Master of Business Administration is solely focused on business. While there are some reflections on the fringes about corporate social responsibility and environmental management, finance remains at the core, and the driving force behind the logic of this academic training is the philosophy of the core business principles to pursue ever larger economies of scale in an endless chase to achieve ever lower marginal costs, leveraging assets through mergers and acquisitions in order to compete in a globalized business reality. After 50 years of graduating MBAs, there are armies of individuals executing the same logic. It will be hard to stop them - after all I consider them brainwashed.
The notion that we should compete globally with standardized products on volume and price has lead to the unacceptable effect that whatever is damaging to the environment and is of low quality, while depleting natural resources is cheap; and that whatever is good for you and the environment, while generating jobs is expensive. The good with quality is relegated to niche markets, while the cheap and branded is advancing in this global market. While the concept of core business made sense after the devastation of the second world war, in order to rebuild infrastructure and society around the world, we have to realize that this model is not well adapted to respond to the basic needs of 10 billion people on earth. It is not even capable of guaranteeing the minimum of quality of life for 8 billion. After the arrival of another 2 billion, this business model where cash flow is king will only stress out the system.
The globalized economy, driven by highly standardized products where there is a permanent quest to cut costs requires a great discipline in management philosophy, culture and approach. Hence the need to put the operations into a common and highly predictable mould, i.e. the MBA. Since the markets are by definition within this business philosophy global, the rules of the competitive game are global, then you need to solidify the whole framework by reliable global players. This is only possible when there is a blueprint of training. The fact that Europeans have high unemployment, suffers from dying communities and the whole industrialized world consumes too much of everything requires an overhaul. I have called for a conversion of the Master of Business Administration into the Master of Brilliant Adaptations. We have to shift from Administration to Adaptation since it has become increasingly clear to me that the tools that have been installed through the logic of the MBA prevents managers to adapt to the new realities. All the tools, including remuneration is geared towards maintaining a strict financial bottom line. In brief: the MBA is resistant to any redefinition of the business model and the rules of their game.
Business environments have embraced the culture of certification, independent market studies, rating agencies, audits and consultants approval. There are hundreds of certifications that litter the minds of corporate executives, confirming that they conform. While the business of certification is itself run by MBAs, it has become one of the blocking agents in change. After all, once you have your ISO 14,000, it is confirmed that your business operates within the pre-established minima of environmental management. The fact that you know the waste you produce, as the certificate proclaims, hardly makes the industry sustainable. At best it gives the key players in the supply chain management the comfort that a common minimum has been achieved. Any deviation is discouraged, since these certifications block any dramatic innovation, and certainly render a change in business model impossible. While the world of voluntary certifications certainly has turned quality and environmental management a little bit more transparent, it has not made brilliant adaptations likely.
Today just about any shift, change or innovation will be subjected to an audit, worse a committee decision that will make certain it never really happens. An innovation will be subject to a rigid review internally, and if it were to have a pervasive impact into the business operations, then a third party review will impose itself. Technology audits have become the rule of the game, with a third party who confirms the expectations by establishing clear deliverables, so that these can be trustworthy enough to change the business plans (including the discounted cash flow analysis). It is hardly expected that a bold adaptation will receive a smooth approval. The risks involved with change, especially the unsettling of the tightly organized supply chain management will hardly get a chance. There is a remarkable preference for trimming and nibbling around the fringes, and a stubborn resistance to bold shifts.
The armies of consultants that accompany corporations have not by surprise emerged from the audit function that has become another feature of the globalized economy. Everything gets audited, and even the law or the by-laws of stock exchanges require broad audits of everything imaginable. When a factory is considered for closure, then the auditors will establish the closure costs, a great unknown. It is no surprise that companies prefer not to mothball an uncompetitive plant, and fast track embrace a breakthrough innovation, since the provisions that will have to be decided by the board are imposed by the auditors. And that were not enough, the insurance companies will also have their way of questioning any changes since they only work with standard agreements from where no deviations can be permitted. Once a process has been set in motion, certified and operating it turns into autopilot. Any attempt to implement a brilliant adaptation will find that the logic of innovation is all too often equated with the logic of the status quo.
Of course, if some breakthrough were imminent, then there are still the lawyers who will have to check, and double-check if the proposed changes are not causing additional risks. In a business environment where the MBAs are all applying the same straight jacket of analysis, and where the multiple whammies of certification, audits, insurance rules and legal reviews make society not just risk averse, any change from the median will be considered too dangerous for management. In order to overcome the impressively shy attitude of management, the human resource director will suggest to take the team to an experience in the forest, to increase their capacity to take risks and improve the willingness to navigate into the unknown. While these experiences in the wild are unique opportunities for development, business will have to increasingly adopt the philosophy “rather ask for forgiveness than permission” instead of sticking to the prevailing logic “better be safe than sorry.”
This does require that management eliminates the shackles from all staff. However, while people on the shop floor and those interfacing with clients have an innate desire to adapt through dialogue with colleagues and customers, the traditionally moulded MBA will require everyone to stay in step, since the overall whip, sweetened by bonus based on performance of the quarterly data will continue to search for ways to further improve profit margins by cutting costs, and engage in financial operations to improve cash flow in order to justify further mergers and acquisitions which are solely valued on the expected savings in money and people, and the capacity to pay back the loans taken to finance the next leap in the globalized economy. Of course, all certified with every point ticket off by the legal advisory team.
It is against this background that the design of new business models must evolve rapidly from the core business philosophy, to one that generates multiple benefits, measured both in financial terms (as the MBA can do well), but most importantly also in terms of the strengthening of the commons and the building up of social capital. How could a business ever obtain a license to operate if it were not strengthening the commons like the provision of free drinking water, the building of top soil, the purification of the air, the resilience of biodiversity. This is not about protecting the environment, and reducing water consumption, this is about revolutionizing business by ensuring that the capital and operational expenses decrease, while the value increases, and the externalities benefit society, instead of the dumping of the negative on society.This is not about paying fair wages to the workers, and providing cheap products at low cost. This is about building social capital that can be measured in improved purchasing power, thanks to making the most healthy, durable and desirable products that the market has ever known, thus revolutionizing the production and consumption model where clients do not simply consume.
The Blue Economy permits us to design these innovative business models. The reason why this represents such a shift is not because the pervasive innovations in technology, rather because of the logic that emanates from the philosophy that underpins the way strategies emerge and corporations shape their relationships through the capacity to respond to the basic needs of all with what is locally available.
Its a problem that people do bad - worse is that people refuse to do good
The world needs positive action. We cannot be satisfied by stopping negative attitudes and asking those who do harm to do less harm. A thief who is stealing less is still a thief. However we have this strange situation that a company that pollutes less gets environmental awards. It is still polluting! How is it possible that we developed this double moral, celebrating what is clearly insufficient? If you know you pollute, and you are aware of the collateral damage you cause, how can one solely engage in programs to do less bad. It is unethical and should not be condoned, and certainly does not merit awards which have proliferated around the world justifying this mediocre shift towards sustainability. The jump from doing less bad to committing to do more good requires a shift in business philosophy where external costs cannot be tolerated anymore and the building up of social capital is as important as competing on the market. And while traditional managers will denigrate this concept as unrealistic, one sometimes must demonstrate that the present crisis is real and caused by an economic system that is not capable of responding to the basic needs of all, let alone control its aberrations.
It is difficult to write - but timely to admit that several large global environmental organizations are often as conservative as multinational enterprises. Therefore it is no surprise that they find each other next to each other - and not anymore opposite to each other debating subjects that seems to make little difference on the ground to the people that matter, especially the bottom of the pyramid. How come institutions like the International Conservation of Nature (IUCN) and WWF can only set targets for protecting nature while 40 years of action on the ground can present a few anecdotes as successes, while the world statistics of conservation are dramatic: loss of species like never before and loss of ecosystems of unparalleled magnitudes.
If the chief executive of an enterprise misses all targets while having had a tremendous groundswell of consumer interest and support in his products, would we not all agree that time has arrived to fundamentally shift the strategy, instead of accusing others for failure to live up to the expectations, and complain of having insufficient funds to get the job done? Or is the excuse for failing that the politicians who were not cooperative, or even corrupt? It is time that environmental organization shift their strategy and bluntly state that protection has been attempted for 40 years and we have clearly fallen short of most of the even modest objectives. Let us therefore be ambitious and aim to put nature back on its evolutionary path, drastically reducing the time and the money spent on analyzing the problem, calling for an urgent call to this creative force of millions who are committed to design a new way forward.
Labor unions are unfortunately loosing members by the millions and as such find themselves face to face with an erosion of their legitimacy. Whereas strikes are increasingly wild strikes supported by non-unionized members, an increasing amount of union representatives are only aiming to preserve what has been acquired. Just like conservationists who want to preserve, and end up losing; union representative wish to preserve the acquired rights of workers, and end up losing; and, corporate executives want to maintain their market loose market share. It suffice here to mention that bankers who wanted to continue making huge bonuses by making money on other peopleʼs money without risking much of their own, also ended up loosing taking the savings of rich and poor with them. Protecting is a first step in the right direction, only preserving is no guarantee you move forward in a more promising direction.
Over the past years we have seen courageous whistleblowers who exposed corporate greed and political corruption as well as the lack of respect for human rights. These people often risked their careers, and even their lives in order to show the excesses of a system and rightfully so have obtained legal protection thanks to a broad societal support. We should continue to encourage those who have the guts to come forward and secure that corruption and deceit are rooted out. Apart from the few high profile cases, there are thousands of small whistleblower scale cases which have never been exposed but to some friends and colleagues. Abuse goes far and unnoticed for too long I recently had to expose a Berlin-based team that was offering money for scholarships under the pretext of supporting further education and specialization, only asking worldwide exclusive exploitation rights to the new know-how acquired by the students. Imagine for a mere €6,000 lifelong modern day slavery was expected. We cannot tolerate this and should not only prevent this from happening again, we should expose it in order to avoid other people falling into the same trap - definitely with the same people.
However, while the unveiling of bad practice is well known, I believe time has come to support a new type of whistleblower: the person who exposes those who refuse to do good. From an ethical point of view - doing bad is bad, but refusing to do good is also bad! It is a well established fact that if you are witness to an accident, and refuse to attend to the people in need, you are possibly condemned by court, and if you leave the scene without rendering assistance, the penalty could include jail time. Now we need to take this logic to modern enterprise, environmental organizations and even to labor unions and ask ourselves: are these organizations aware of the tremendous opportunities before them (and us).
It is true that most organizations, especially in the industrialized world, spend huge resources in both time and money on analyzing the problems. We have armies of people who have committed to understand every angle of the issue, and know how to argue the case. It is no surprise that in this culture we have more lawyers than we need to be happy. To my great regret, we have too few people trained to observe a situation and quickly evolve from the description of the problems to the identification of a portfolio of opportunities. These urgently required new insights will give us ideas, which are certainly quickly discarded by experts of fantasy; it will provide access to prototypes, which are always ridiculed as non-functional in the real world; it will even give us pilot cases that are ignored as too small to have an impact on the problems we need to address. However, once you have cases that have outgrown the growing pains that accompany any innovation, then what can the response of the nay-sayers be?
When back in 1992, Prof. Shuting Chang studied for the first time the farming of tropical mushrooms on coffee waste, it was nothing more than an idea. When Carmenza Jaramillo (Colombia) documented over seven years the application of the science, complemented by the pioneering work of Ivanka Milenkovic (Serbia), then pilot projects emerged both on coffee farms as well as in the inner-cities like San Francisco, Seoul, Mexico and Amsterdam. Now there are thousands of people working in the conversion of coffee waste into food, and the conversion of post-industrial and consumer waste into material for odor-controlling polymers for textile and carpets. Then one wonders how long can the makers of instant coffee - who burn millions of tons of pure coffee waste - pretend that this is not an option for them, the community in which they operate and the world which requires fundamental shifts towards a better future. While some may argue that they did not know - once they know - how long are they negating the opportunity to make their company more competitive and their community sustainable while generating jobs and cash flow.
A preliminary calculation indicates that the worldʼs largest maker of instant coffee is discarding an estimated three million tons of coffee waste, which could be converted to three million tons of tropical mushrooms, dramatically increasing the availability of healthy food on the world market at very competitive costs since the substrate has been sterilized in the process and the space needed is minimal. How long can the company maintain that since it is not in the mushroom business it prefers to incinerate the waste and only recover some energy from it? Is it not time that we get positive whistleblowers and say that the refusal to create the opportunity to turn waste into possibly 100,000 jobs at this one company, and to introduce healthy food at lower prices to consumers in a world where half of the world is turning obese due to an economic system where whatever is bad for you is cheap and therefore preferred, especially by the poor.
Now I would like a team of positive whistleblowers take this case to the top 10 instant coffee producers and ask: “How much longer before you want to do good - and make more money?” Unlike the negative whistleblowers, these positive whistleblowers are not preventing companies from making money in the wrong way. These positive whistleblowers empower corporations to make more money, generate better cash flow, and contribute to a positive shift in society towards more and healthy products. This helps to create an economy where the good is cheap and whatever supports the environment to embark on its evolutionary path is possible.
The regeneration of the forest, as demonstrated by Paolo Lugari in Las Gaviotas (Colombia) shows beyond any doubt that the errors of the past can be converted into productive centers of today, while regenerating a native forest and pursuing a clear strategy to respond to the basic needs of all, including the need for fuel and mobility in an isolated zone. This project is now self-sufficient and generates social capital. When we presented the opportunity to expand this to 100,000 hectares the proposal was discarded by the Government. The introduction of soy and corn monocultures with special seeds (read GMO) and a satellite controlled planting and harvesting received the green light from the government, not even generating a 100 jobs on 65,000 HA of land. How can one prefer the short term exploitation by a private group which needs security guards to prevent invasions, to the creation of community that requires no importation from the outside. Is the wish to speculate with land, the drive to export soy to satisfy animal needs elsewhere, and impose genetically modified crops that are chemically controlled the best option for the people? Or should we expose that there is an opportunity to replicate a development inspired by the nearly three decades of hands on experience on the remaining five million hectares, before these will also succumb to the appetite of speculators? There are hundreds of cases that permit us to turn “less bad” into “more good” without falling in the trap of “refusing to do good”.
The key will be to rely on these positive whistleblowers who expose the great opportunities we can quickly identify provided we shift our mindset from the negative to an unconditional positive, scanning for the opportunities while screening for the best options without getting diverted by the audits of the doubters and the demand for more proof of concept than the best one you can offer: go, visit and see for yourself. After all that is the most disarming response of the positive whistleblowers, and one that works even with the staunchest opponents to change. So positive whistleblowers stand up and unite.
© 2012, Gunter Pauli - publish and reprint only with permission
A framework to guide innovation that guarantees social capital and sustainability
Engineering has evolved into a logic where without further and certainly no deeper thought chemistry is used to transform materials, genetics determine new forms of food, mechanical pumps are planned in production, and air conditioning systems have become indispensable to operate a house or an office. The introduction of automated computer designs for everything from a simple home to the planning of complex petrochemical refineries uses existing and known solutions off-the-shelf often without any deeper thought. As a result we engrain a portfolio of standard solutions into the design of just about everything. Legal obligations and risk reduction requirements -with the best of original intentions- combined with our computer tools block the introduction of innovations which are only admitted after major expense and dramatic improvement has been demonstrated, often at high cost. The result is that engineering has lost its deeper meaning and innovations are limited to changes on the fringes. Industry finds itself in a straightjacket incapable of pursuing fundamental shifts.
While business students will occasionally get exposed to social responsibility and the green economy, engineering students are hardly challenged in their approach to design. Students and professors seldom have any notion of the underpinning philosophy that should guide their logic of using materials from complex plastic molecules to energy. This is not a call to expose engineering students to Socrates or Schumpeter. However, we are in need to go beyond the simple drive towards ever higher levels of efficiency measured in simple parameters as time and energy. Engineers are taught that “The slower the process, the more retention, the more space”, thus costing more and encumbering competitiveness. The faster the process, the more energy and the less space that is required, the more competitive the process. My own experience in the making of liquid detergents convinced me that the traditional forms of blending ingredients in water would have been revolutionized if a fundamental philosophy would have determined the direction of innovation. Unfortunately, in those days I lacked the insights I enjoy now.
When I observed that a 10,000 liter vat with a screw at the bottom requires 45 to 60 minutes of mixing, the best my research team could imagine was a new screw, one that did not move around in circles, but one that creates slow movements of an eight. Substituting fast screw revolutions with slow turns into an eight could save about 30 percent energy while the retention time remained unchanged. The engineers described it as a revolution inspired by the anthroposophic philosophy proposed by Rudolph Steiner. I was happy to innovate. It took me over a decade to realize that Viktor Schauberger, an Austrian forester had imagined a completely different mixing system that did not require any screw or blender. The vortex emerged as a remarkable gravity- based naturally swirling movement permitting to blend all ingredients in a matter of minutes, instead of hours solely relying on the law of gravity as a driving force. The ecological factory, with dozens of ten thousand liter vats could now have been reduced to one vat, and one only. The savings in space and energy are now not measured in percentages, rather in multiples.
After reviewing over two thousand innovations in the framework of the writing of my Report to the Club of Rome entitled “The Blue Economy”, it occurred that the reason why many of the “obvious” innovations could never find their way into industry is because the underpinning philosophy of engineering is focusing on known efficiency with known machinery. In this context, the best we can expect is a marginal improvement like saving energy, but never a paradigm shift that goes beyond the obvious. Engineers are not expected to rock the boat, and change the fundamentals. Engineers are expected to build on the established fundamentals. Time has come to rock the boat and the best way forward were to expose students in all classes of engineering to some fundamental principles which one day could emerge as a new philosophy of engineering. That could warrant a fresh look at innovation, steering society towards health, sustainability with the capacity to respond to the basic needs of all.
All is Connected
The first line in this philosophy should be that “all is connected” based on the extraordinary insights of Arne Naess, the Norwegian founder and inspiration of deep ecology. While even many of my green friends have hardly ever heard his name, Professor Naess who was recognized by the Royal Swedish Academy of Sciences with a life time achievement award, argued very effectively for a rigorous understanding of how everything is connected. If we pursue a singular goal, a simple objective like energy savings or speeding up processes, then we are bound to cause unintended consequences, like the excessive use of harsh chemicals. Deep ecology unravels the links amongst everything we know and see. While this increases the level of complexity in a world fascinated with simplicity, it allows the design to resolve issues that could never be tackled in an isolated fashion.
The Law of Physics
When we realize that “all is connected”, then we will have the freedom of mind to observe that the laws of physics should be applied before we attempt to revert to chemistry and genetics. It is amazing how often designs of production or construction systems go against the laws of physics. Pumping cold air up as is done with air conditioning systems, or pumping water down as is done in mining, simply does not make any sense, and yet these are the standard. How come we could ever permit this level of “ignorance” in engineering? Or, should I ask who taught such stupidity and tolerated its widespread replication?
The laws of physics have no exceptions. Hot air always rises, and water is more dense than air, therefore generates more pressure when moving. This puts hydropower at the top of renewable energy, since it generates potentially 832 times more energy than wind ever could. Then physics also teaches us that for any force in one direction, there are forces in the opposite direction. That helps us understand why the apple can get up in the tree, before subjecting itself to the law of gravity. While we teach all these core facts of life one by one in high school, engineers seem to have forgotten the basics once they graduate from university. The mere fact that we pumps water in straight pipes, with elbows that move the direction of the flow in 90 degrees angles leads to a generally accepted use of pumps that consume up to ten percent of all energy requirements of production facilities. The introduction of energy efficient pumps, or for that sake even solar pumps, does not change the fact that a smart gravity based process could eliminate pumps all together.
Substitute Something with Nothing
When I observe the theory of evolution, and realize how ecosystems evolved over millions of years, then there is one principle that inspires me most, and one that should guide our engineering design: “substitute something with nothing”. While the majority of engineers are frightened by the idea, and therefore ridicule the concept since it eliminates the core building blocks that are part of the automated designs, it is a sign of the master when one succeeds in turning production and operations simpler by eliminating what is not needed. I have often argued for keeping it simple, but here it is kept so simple that what was considered key is now superfluous. Many of the eliminations are possible only because we rely on the laws of physics. The fact that we can cleanse water with a vortex, driven by gravity, or that we can have color, without color pigments, or that we can eliminate bacteria without chlorine, or control fire, without fire retardants helps us imagine cheaper, healthier, more sustainable solutions that are also very competitive. In order to embark on such fundamental shifts - substituting something with nothing - does require the capacity to think out of the box and embrace solutions that are not off-the-shelf. These solutions are not even on the shelf!
Work with What you Have
When Anders Nyquist exposed me to the possibility of refreshing the air in a school in the North of Sweden every thirty minutes all year around without the need for additional energy, it occurred to me that architects and construction engineers have no exposure to this philosophical approach. We have to respond to the basic needs with “what we have”. The engineers in modern society operate on the premise that we can get whatever we want even when it is not immediately or locally available. Now the laws of physics unveil tremendous predictable forces that are available all the time and everywhere. And, if we adhere to the principle that we use what is locally available, then we can strengthen the concept that we should substitute something with nothing.
The consumption of batteries is an obvious point in case. The desire to have a permanent source of power for our miniaturized mobile electronics leads to the production of 40 billion batteries annually which unfortunately spur the need of mining in the four corners of the world. This leads to the indiscriminate dispersement of minute amounts of metals in our environment. The introduction of green batteries which last longer and use less toxic metals will not change the predicament: we still deplete the earthʼs crust, we continue to consume non-renewable energy to make it, and we force our living environment to accept our incapacity to recover the precious materials. While these metals can never be destroyed, the uncontrolled waste flows into our habitat, even with green batteries.
Keep it Simple
What we need is mobile electronics without batteries, applying the core principle that we have to substitute something with nothing. Now cell phones, iPads, and gameboys could all function based on physical and locally available forces like temperature and pH differentials, pressure, also created by our voice, radio frequencies, and dozens more that can be converted into the low voltage that is required. If the electronic and electric engineers focus on circuits that require ever lower energy, by shifting to materials that have less resistance, then we see emerge before our eyes a world of efficiency and mobility without ever having to rely on the toxicity of metals nor the exploitation of more greenfield mines. This implies that the laws of physics permit us to evolve from the elimination of something with nothing to the clear practice that we have to keep it simple and we use what we have. Of course, those who have been trained as engineers, this may even sound heretic, and that is the reason why we have to revert to the need to agree on a philosophy of engineering, instead of the simple pursuit of productivity measured by one parameter only.
The leads to the next baseline in the new philosophy: the pursuit of multiple benefits. Engineers are trained in the Cartesian logic of cause and effect. If you increase pressure and temperature, then you speed up the chemical reaction splitting long molecules into shorter ones. And, if that does not do the trick, increase the acidity. The toolbox of engineers has become oversimplified and does not permit the discovery of multiples opportunities. When we gain the insight that synergies are easily generated once a complex approach is pursued, then the “cause and effect” toolbox will emerge as too limited, not permitting the full exploitation of all potential. Therefore, the cause-effect logic fundamentally affects the productivity and the competitiveness of the overall operations. I am not against any of the past engineering exploits, I am in favor of doing much better.
If more water is needed, engineers may revert to water treatment and design a closed loop water use. An ore processing facility located adjacent to a mine potentially stresses out the water reserves of the whole region. Engineers would quickly embark on an expensive design of a water treatment plant that would reduce consumption of fresh water. However, a quick review of the ecosystem could reveal a broad presence of exotic species that deplete the water table, irrespective of the mineʼs presence. The replacement of the non-native eucalyptus and pine trees with a diverse portfolio of native vegetation not only increases the water retention, it also contributes to the replenishing of the top soil, the provision of construction material for housing, posts for farming, and fibers for paper production. Instead of increasing the investment and operational expenses, this approach reduces costs, while offering local solutions to local issues, including the strengthening of the commons (top soil generation) which offers a major plus to the influence zone. This approach position the company as a truly social and ecological enterprise that improves its competitiveness.
Strengthen the Commons
This highlights a key component of the Philosophy of Engineering: the engineering design will also contribute to the commons. If we aim to respond to the basic needs of all, then we must strengthen the commons: the ecosystem services on which life, especially our human livelihood depends. This includes clean water, fresh air, top soil, conversion of waste into nutrients, and an ever evolving biodiversity which provides resilience to change. While the costly management of each of these critical components of life lead to the exploration of private public partnerships especially for water and waste management, this has converted the commons into a commodity. While there may be a market logic to impose a scarcity framework for all the commons, this approach has decreased the purchasing power of the bottom of the pyramid. This created a poverty trap from which they cannot escape. This means that the only sustainable phenomenon of the dominating engineering principles today is poverty itself?
Therefore we have to engineer innovative business models in such a way that the commons can be guaranteed, free of charge as originally intended, through the systemʼs design. Paolo Lugari at Las Gaviotas designs the regeneration of the forest, with results in a major increase in asset value, thanks to the generation of drinking water which is supplied for free to the local population. The management of solid municipal waste through its blend with the slurry of waste water treatment plants provides clean water while generating revenues through the production of biogas. This is sufficient to pay for the water treatment, even providing room for a profit. Whereas the dominant business model is based on taxing citizens for public water and waste management services, the new model generates revenues in excess of costs, eliminating the need for taxation, and therefore implying the reinstatement of the commons.
Health is the Overriding Priority
While the commons, and their wide availability to the most vulnerable in society is key, we need to ensure that whatever we do improves the healthy living conditions. This is more important than preserving our environment. Actually when we guard our health as the true objective that united all races and classes, then we share this common goal to enhance life on Earth. This goes beyond the control of bacteria and the use of antibiotics, which are not in tune of the philosophy of engineering outlined above. This means that we will undertake all we can to have quality air to breathe and rich water to drink. We ensure that our food is modulating our immune system, enriched with trace minerals, and that radiation of all types is brought to quasi nil. Metals are not dispersed, and plastics do not have the minute softeners and UV control agents. If we agree that health is the overriding priority, and even our mental health is considered a priority, then many solutions that may have appeared interesting, are now discarded from our portfolio of options.
If and when the new production and consumption system provides for the commons, made possible thanks to the multiple benefits, created thanks to the rigorous application of the laws of physics, going with the flows, then we can eliminate numerous superfluous components of the mechanical and chemical world. This cuts costs, renders the operations less vulnerable, thus more profitable while at the same time creating more value. The overriding principle is that we will enhance life, not in years but in quality. This Philosophy should be taught to students from economics to engineering. It provides a fresh look at how a market economy can turn social and sustainable, while generating jobs and improving competitiveness, finally lifting a major portion of the worldʼs population out of poverty, not by chasing ever higher wages, but rather by improving their quality of life, including an improvement of their purchasing power.
© 2012, Gunter Pauli - reprint only with permission
If you are against growth think again - if you are in favor of growth think again as well
The Reports to the Club of Rome in the early seventies described the facts beyond any doubt: unbridled growth pursuing ever more gross domestic product will soon hit a brick wall. It is not a matter IF, rather it is a matter WHEN. Exhaustion of natural resources, starting with the commons like water, air and top soil, will lead to a collapse in productivity, rendering societies incapable of responding to the basic needs of all. The concept of the carbon footprint described in clear terms that we are already in need of more than one Earth in order to satisfy human needs. We have clearly gone beyond limits. On the basis of this set of data, we need to stop growth.
On the other hand, there is massive poverty and billions need access to the most basic products and services to lead a humane life. It is impossible to refuse the right to respond to the need for water, food, housing, energy, and health. The drive to supply the basics to the bottom of the pyramid has been considered as an impulse to the old growth model. So the question is: are you in favor of growth, and further deplete the Earth faster? Or are you against growth and negate a few billion fellow earthlings the right to life? It is clear that the issue is not - either / or - we need to change the framework of thinking in order to satisfy both.
In previous articles I argued in favor of the multiplier effect, and the faster circulation of money as appropriate strategies to grow the economy without inflationary pressures. In this blog I expand on the power of innovation to increase purchasing power. In the end what consumers are interested in is purchasing power, not simply a salary. If there are urgent calls for increasing the miner wages in South Africa, the income of electronics industry workers in China, or the airline staff in Germany is that people just cannot make ends meet. Then, the only prevailing logic it to increase wages. However, more income for employees represents higher costs to the company, and in the globalized economy model, this equates to a reduction of competitiveness, profitability and ultimately share value on the stock exchanges. This clear sequence has lead to the absurd logic that whenever companies announce a massive lay-off or closure of operations, that this companyʼs stock price will reach historic highs. There can be nothing more devoid of human logic.
In the 20th century, the social movement set up cooperatives permitting its members to embark on joint purchases, thus reducing cost and improving purchasing power. This cooperative movement still has a strong base in Sweden, Netherlands, Germany, Austria and Switzerland. It expanded from basic needs to insurance, banking, and lately also to green energy purchases. Time has come to revisit this logic of corporatism and and salary negotiations to some more fundamental shifts that will finally achieve the objectives we all want.
For example. If we succeed in bringing a solar system to market that offers power, heat and chill, then we are harnessing the real force of the sun. Instead of having three separate capital investments, we now could combine it all in one. The photovoltaic (PV) cell functions on both sides, regular solar on top and concentrated solar on the bottom; the heat generated by the reflection in the mirror chamber produces hot water, and tubes in the solar cells cool the water to six degrees since the black PV radiates out all heat at night and secures a continuous daily supply of cold water. Since hot water rises, and cold water drops, a hot water tank is always ready for use on the roof top, while the fresh water keeps a container of two cubic meters cool all year in the cellar of the building. On top of that, the casing of the “power, heat and chill system” is made from heat resistant recycled plastics, offering a great market for waste that otherwise gets - at best - shipped off to China to be converted into garden posts.
In Europe up to 30 percent of the electricity and gas is used to heat water. This cost is eliminated in the above described model. The acquisition of a refrigerator is considered key to health and safety, however these cooling devises are equipped with energy guzzling compressors and cost cash to buy and to operate. That is also eliminated. Then, the electricity consumption for daily use is reduced to the PV generated power, which is more efficient than the grid offering access to power at approximately 4.0 cents per kWh. Thus, design of the Solarus triple power panels not only offers a dramatic reduction in energy costs, it eliminates the need for capital expenditure. This releases purchase power for families across the board through the introduction of innovations that really respond to basic needs. And let us not forget, that additional jobs are created by converting waste plastics into a substitute for aluminum represent the entry into the job market that is much needed. This positively affects as much the bottom of the pyramid, more jobs means more income, and then more purchase power for all.
While the salesman of refrigerators is likely to loose customers, and the electricity supplier is not required to plan for an expansion of power generation, society now has additional funds available to make critical acquisitions and expenditures. We need to shift our production and consumption patters towards one that is capable of responding to the basic needs with what we have, so that our carbon footprint remains in line with the regenerative capacity of the Earth. This does not imply a reduction of consumption, on the contrary this model permits an increase of consumption without suffering from the rebound effect, whereby we observe that a lower cost of energy generates more demand so that the absolute effect even is worse than before the improvement.
The well known examples of maggots and mushrooms demonstrate that we are in a position to ensure more food and better health care at lower cost, and since this cascading effect trickles through the system, we observe a decrease of poverty, and an increase in consumer satisfaction, without this explosive overall growth that has dogged our sustainability models for the past decades. In my book “The Blue Economy” I indicated that we have to design with the flow. Each time we must generate value from existing matter, nutrients or energy flows, we must generate good use at every interval. The process to simplify everything so that whatever is not needed is designed out provides further improvements. In the end, we succeed in making so much more with what is available, and we can respond to more critical demands without having to increase salaries. Of late I have been challenged that my examples are always related to food. So let us take a case that has no relation to nutrition at all.
The mining industry in South Africa asked my opinion on the present dilemma of social unrest. The doubling of salaries as requested by unions would be detrimental to the survival of the mining industry. On the other hand, the amount of available cash to the people working in mining should double in order for them to lead a meaningful life. We cannot and should not negate their necessity either. So, if the mine owners and the workers now solely haggle over the percentage of the increase in salary then both will loose. If on the other hand both embark on a bold development strategy using all the assets opportunities of the mine sites both closed and operational, I am convinced that first of total employment could double from the present 500,000 to one million workers in South Africa alone. And second, perhaps more important, specific innovations that target responding to the basic needs for food, water, housing and health using the existing cash flows of the mining operations will make everything cheaper than thus increasing funds for spending without requiring a rise in individual salaries.
Now the doubling of employment in and around the mine sites does not mean a strategy to double output from the mines, or to carry a larger personnel count on the payroll than is needed to exploit the business. It means that we have to convert existing costs into revenues, provisions into investments, undervalued and hidden assets into value adding proposals. My first analysis of the mines unveil multiple opportunities beyond what is obvious for a mine, but self-evident for anyone who knows how to connect the available resources. Let us look at a concrete example of a new mine in Latin America.
Mining concessions reserve thousands of square kilometers of land as their influence zone. A mine requires water. How can a mine not secure that its operations will never interrupt the present supply of water, nor jeopardize future generationsʼ access to this source of life? Mining indiscriminately requires to undertake a surgery in the earthʼs crust. The restoration should include reforestation. Imagine with me the following scheme: 1,000 square kilometers of mining concession is used to regenerate a bamboo forests that once stood. Bamboo regenerates hydrological cycles, creates new creeks and rivers, plus regenerates topsoil at a rate of 50 centimeters over thirty to fifty years, the typical life of a mine.
Three years after planting bamboo (Guadua angustifolia), the first poles can be harvested. The 25 meter long bamboos offer 6 meters of structural building material, perfectly suited for social housing. The Guayaquil (Ecuador) experience of prefabricated bamboo houses demonstrates that 42 houses can be produced every day at a cost of $950. Now, the remaining 19 meters of the pole can be used to produce fluff, ideal for the production of paper, especially for applications like toilet paper which today requires genetically modified eucalyptus or pine, or recycled paper shipped from around the world.
A mine would typically have to reserve major provisions in its balance sheet to cover the cost of restoring land after extraction of ores. A paper and pulp company would normally have to invest long term in the plantation of forests, a major immobilization of cash to secure supply independent of market price fluctuations. A social housing company cannot afford to buy land, and has left-overs from construction. The production of charcoal from the waste construction material is one option for most of the structural components, offering an additional revenue from the same bamboo. This already offers already a fourth benefit. Now it is most important not to loose out of sight the fact that once bamboo is harvested, it will sprout again annually for the next seventy years.
The outcome is clear: mining is restorative by design, generating more water than there was before, social housing can be offered at an even more competitive cost, and the replacement of a water guzzling eucalyptus with a fibre producing ten times more fluff on land that one does not have to purchase, but rather help restore, and assist in the creation of a model for social housing holds a completely different logic. This mindset underpins a fresh competitive approach to mining, housing, and paper products. The bottom line is that it represents a major cost reduction for consumers, an improvement of their purchase power. This also represents a better use of cash flow and capital investments of corporations. Thus, while the industry gets more competitive, more jobs are generated, thus rendering more income to the people to get out of the poverty trap, while at the same the time cost price for key items is cheaper and the commons like water can now be guaranteed long(er) term instead of falling into the trap of privatization.
Today salary increases are the subject of delicate negotiations between unions and employers. At times of economic downturn as we face now, at best the unions will succeed in getting additional pay in line with the additional inflation rate. This means that there is a fictional salary increase, since there is no additional purchasing power, one only keeps up with inflation.
That is why the economic model of The Blue Economy is more than an bundle of innovative technologies, a proposal of new business models, it is a fresh way of transforming society in cooperation with government, academia, large corporations, small and medium sized companies, NGOs and civil society at large in order to respond to the basic needs of all. It is a chance to eradicate poverty through increasing purchasing power, while securing more entries into the labor market. It is this double effect of more jobs by going beyond the core business model, and higher purchasing power for the basic needs that allows the economy to turn socially just and ecologically sustainable without depleting its resources and forcing the poor to remain poor.
© 2012, Gunter Pauli - reprint only with permission
When I wrote for the first time on the need to embrace the principle of Zero Waste and Zero Emissions, it was a surprise to me that the article was initially published in 1991 in Korea where the President of the Kyung Hee University in Seoul took notice and secured its wider distribution. To distance myself from the notion that we have to reduce our impact was a bold statement. We have to do better. The suggestion that preserving and protecting what we have is a necessary first concern, but not enough to steer our societies towards sustainability sounded for many too far fetched. Twenty years ago I declared that we need more than the desire to reduce our negative impact. So I suggested the design of a production and consumption system where the bad like waste and emissions is converted into inputs for another process generating value. The concept of the biorefinery was born. This has now been solidly established by concepts such as the circular economy. Now we need to make the next bold steps, eliminating what is not needed (like batteries, pumps and so much more) and undertake 1,000 small steps in the right direction all at once.
The human race has to become more ambitious. Instead of seeking one minor improvement after another, celebrating tiny changes we must realize that we have the capacity to generate a broad and positive impact without ever leaving ugly traces behind. We have to be clear, it is not enough to reduce our footprint. We cannot leave a footprint behind! Steeling less is still steeling; polluting less is still polluting. Humanity should be part of the ecosystem and join this evolutionary path where we can redress the errors of the past by making multiple positive contributions and eliminate our chronic dependencies on the unnecessary. Since this approach is beyond the standard today, time has come to qualify this with some examples in which I have been involved over the years.
When the small green detergent maker on which board I served was at the point of collapsing, I accepted my duties as a board member to first become the interim CEO, then part owner and chair to convert this embryonic pioneer into a global statement on how sustainable enterprises could compete starting with the construction of perhaps the first ecological factory in the world. The building, which stands tall two decades later has a life expectancy of at least five years more, and only cost $2.5 million to construct.
Within months after its inauguration, the green factory with the green roof mobilized a multiple of its investment in advertising value through extensive media attention and thus created a unique emotional bond with millions of customers who remain loyal to the brand to date. The most coveted relation between producer and consumer - loyalty and repeat sales was established as a sign of appreciation from clients for the pioneering actions we undertook. It was more than a green factory, it was a new way of doing business.
The process and the message of constructing the factory was more important than the actual building itself. It helped change the state of mind of a significant segment of the market, offering people a chance to look beyond the obvious. A team had spent years imagining the green factory, but never gathered sufficient momentum to secure the funding and never had the drive to implement. Nine months after I took the leadership of the company, the Environment Commissioner of the European Union Carlo Ripa di Meana, and the environment guru Lester Brown, founder of the WorldWatch Institute planted the first flower seeds on the roof - instead of cutting a ribbon. Planting flowers, not cutting ribbons was the symbolic language for a factory that had its own wetlands to treat its waste water. It was an exercise of empowerment, permitting everyone to be their best and to go with the flow - even if it felt like a roller coaster of dozens of small, pragmatic initiatives.
The green roof turned brown within months, unaware of the fact that we inadvertently relied on a monoculture of grasses to provide a green cover. While we were debating what to do next, the birds and the bees did the job. Before we could finish our dialogue with the experts, biodiversity was invited to take over the football field some 10 meters above the production floor and turned the symbol of the green factory into a diverse and lively cover that regulated the temperature inside. We had provided the living conditions, and once nature took over, the looks turned back to green. In addition, already 20 years ago we experimented with biofuels for mobility. We encouraged carpooling by offering parking space closest to the entrance for those who come to work in the most fuel efficient car, and promoted the use of bicycles as a means of transport. Our staff in the factory received Patagonia long johns and undershirts. This move surprised Yvon Chouinard, owner of the outdoor clothing company who never thought that energy conscious companies would opt for his quality wear. Dressing up workers as if they were going to scale the highest mountains permitted us to save on heating inside the factory. All our findings were published, open source and created a media buzz at a time when fax machines were the only innovative communication tool around.
The chosen direction - sustainability - is a good but is embarrassingly insufficient to steer our societies towards the future if we only take one step at the time. We need to undertake many steps in parallel. That is what Paolo Lugari did in Las Gaviotas1. He was never content with the sole production and installation of water solar heaters. His team was not satisfied with the mere planting of trees. It is the attitude that you need to deploy multiple initiatives - each with multiple benefits that creates a platform for real change. Twenty five years later Gaviotas demonstrates that it can tick off results attaining basic needs in terms of water, food, housing, energy, jobs and health, while at the same time regenerate biodiversity. Better: Gaviotas not only meets the Millennium Development Goals, it also meets the tough financial criteria in terms of return on investment and cash flow in a part of the world where government services excel through their absence.
My approach to Bhutan has been comparable. A country that is opening itself to a globalized society faces hard choices when it wishes to preserve its culture and tradition like the farming of buckwheat in remote villages or the use of soap nuts as the basis for hygiene. Whereas the Royal Government of Bhutan has clearly opted to grow its capacity to respond to the basic needs of all in an effort to improve the happiness index, reality is that the country has been swamped with cheap imported goods that offer its citizens a temporary pleasure of the “new” at low (perceived) costs, but completely drains its cash resources from the local economy. A widespread shift towards the cheap and the easy fundamentally alters the direction of development, away from sustainability, depriving the local economy of the financial resources to keep it liquid. Unfortunately, few realize the cascading of these negative effects when comparing prices on a supermarket shelf.
Now, if we only argue to substitute cheap imported GMO rice with subsidized buckwheat that has fallen out of favor with the locals since advertising has convinced them that white rice is “in”, and brown buckwheat is “old” then the country will never succeed in its quest to maintain its tradition and culture, while developing the economy and ensuring happiness for all. The smart development of buckwheat for the future includes a myriad of initiatives with buzz words like beer, malt extract, animal feed, wild yeast harvesting, overseas licensing with a royalty fee that generates more than the original cost of farming, plus a local brew( 2). Only a clustered approach could succeed in making a dent. Implementing a dozen of those, puts a sustainable Bhutan squarely into the globalized world. Other recent initiatives like the one for the Province of Limburg (Belgium) equally highlights how it is possible to embark on a portfolio of innovative business models, and as Herman Reynders, the Governor of the Province states, this causes everyone to change their way of thinking. We need more than new technologies, we need a new way of thinking: shift from doing less bad, to doing more good.
When we observe the potential of the island of El Hierro today and compare the reality with the impressions a decade ago when few considered that there would be a future for this island without water, dependent on subsidies for diesel fuel to keep the grid humming, then we realize how few thought this would ever be viable. Now, even the Spanish Minister for Industry, Energy and Tourism takes notice realizing that the island does not even need subsidies anymore, a welcome message in a cash strapped society that is struggling to keep its head above the water with a staggering unemployment rate in excess of twenty percent. The same cluster approach mentioned for Gaviotas, Bhutan and Limburg demonstrates like the initiatives in El Hierro that it is possible to develop of portfolio of initiatives that deliver results. In this case the offer includes competitive electricity that provides more water, strengthening the productivity of local farming, which now goes organic, and more value for the economy with a cheese factory and a slaughterhouse, and a ready market to buy all excess output. This strategic portfolio approach not only reduces the carbon footprint and ultimately eliminates the footprint, it generates jobs and offers a future in the periphery of Europe. Now, it is the periphery - a small island located closer to the coast of Africa than the Spanish Peninsula that shows the center how many actions can be undertaken on the ground - with patience and tangible results.
The Blue Economy (3) I propose solely embraces projects that have by design multiple benefits, and when we then embark on dozens of these initiatives in parallel in well defined regions we can realize the change we can implement. Honestly, I see no other way. The key to success is to design positive interactions, to envision synergies, and to facilitate progress by multiples of ten to one hundred and it does start with a wide portfolio of initiatives. We are often blinded by the notion that one small initiative can hardly have a global impact. Let me be clear, we do not need to see the global impact, we first need to see multiple local impacts. Successes at the local level, not one small one, but dozens connected ones all in parallel will turn the global conditions around.
What my original work at the green factory has in common with Las Gaviotas, Bhutan, Limburg, El Hierro and the other initiatives I have had the privilege of being involved with is that everyone choose a clear direction, and teams embark on a portfolio of initiatives. No one expects a quick fix, no one wants to embark on one trial only. We know from experience that pilots and tests lack commitment and therefore fail in producing the breakthroughs that are needed. We need the science that offers certainty and entrepreneurs who are prepared to embrace the risks. And, as we weave more examples together, solutions bring the message home, and touch peopleʼs heart, as well as their wallet. Then we can start beyond a remote village or a distant island.
Therefore we need to change that overly careful management style of taking one step at the time and expose people to all the opportunities right before us at the local level, and leave the global debate for what it is: frustrating and without concrete results. Then, we will realize that reducing our footprint is a good idea, but it is not good enough. Better, then we realize that we are capable of doing so much more, so much better, and that is what inspires me to pursue the work I do, and should inspire you.
(1) The case of Las Gaviotas can be seen in the video that I produced and is available on YouTube
(2) This is is described in detail in Case 98 which you can download from http://www.zeri.org
Recycling was a great idea, cascading matter even better, the best is to KISS
When the elementary school teacher wondered how a tree recycles its leaves, common knowledge hit smack into the face: a tree never even attempts to reattach the leaves that dropped in the fall to its branches in the spring. While this seems to be self-evident, it sheds new light on the logic applied by societies to recycle. We have imagined and imposed closed loops that turn glass bottles into bottles, and newspapers into paper.
And while we learn the lesson that glass should perhaps become glass foam, through a chemical reaction with carbon dioxide, and paper may rather become an insulation material extending the life of cellulose, we start to understand as a community that merely recycling comes at a high cost, and that there are better options. In addition, we fail to see that while recycling is a great step towards a circular economy, the mere recovery of a waste stream often perpetuates the very non-sustainable behavior of modern society that is putting such stress on our limited resources - even when we recycle. We need to design a society that meets the needs of all by generating more value while consuming considerably less stuff. That is the reason why I call for KISS as a design principle.
Since the Club of Rome shook the establishment and presented a clear logic with the publication of the 1972 Report entitled “Limits to Growth”, we need to increase material efficiency in order to render our societies sustainable. Industry has embarked on the reduce, reuse and recycle concept. While we applaud all the efforts in that direction including the popular notions like the circular economy, cradle to cradle, increasing material efficiency by Factor 4,5 and 10, we must realize that recycling renders our consumption and production pattern inflexible as we continue to rely on and thus promote the use of totally unsustainable resources. This means that we continue to consume too much stuff. The mere reduction of materials and their recycling is great but not good enough. The rebound effect makes us consume more as efficiency increases and the continued population explosion is expected to add an extra 2 billion people implies that we continue to stress out our limited resources. That is why we need to go way beyond the mere 3R, and embrace the principle to substitute something with nothing. Only then can we respond to the basic needs of all.
While this expression “substitute something with nothing” seems unrealistic it is urgent that we embrace simplicity as a core principle in our endeavor to steer society towards sustainability, and eliminate many of the standard components, products and processes that we consider part and parcel of modern life. Take the example of the battery. While the industry delivers 40 billion batteries a year, most of which end up as uncontrolled waste, the large majority of mobile and electronic devises never needed a battery in the first place. The convenience of a power source like batteries spurs mining, smelting requiring high energy consumption and a wasteful consumption of precious resources. This battery approach to the storage of electricity neglects the potential to exploit a mere difference in temperature, pressure, or pH and the conversion of pressure from noise to generate sufficient power to operate 95 percent of all mobile electronic devices. There is no need for a green battery, we simply need no battery.
We should embark on a broad initiative to finetune and introduce technologies that eradicate the need for batteries - as simple as that. This should be one of the global initiatives in the interest of cost, health and the Earth. When exceptions apply, we should eliminate all one way batteries by law and solely operate with power accumulators that can perform the job at least 2,000 times. Or, use water that can be recharged indefinitely as a power source through the accumulation of heat. This design principle can be applied to hundreds of products and we should review a few to clarify how easy it is to have the same quality of life, without all the stuff that chokes ecosystems, risks our health, relies on too much mining and energy and was not needed in the first place!
The challenge we are facing is a dependency on material cycles which are superfluous. While recycling should be a part of life, as a part of our desire to create a culture around products of service we continue to consume excessively. I repeat: many recycling programs perpetuate totally unsustainable products and services. So instead of promoting recycling and the cradle to cradle logic, which were great strides forward at their time of conception, we need to go way beyond and eliminate. We can obtain clean drinking water without filters, pumps, membranes or chemicals, simply using the vortex, the swirling movement that rivers have applied thanks to gravity to remove unwanted particles.
Take the emerging practice of burning solid municipal waste under the pretext to generate power. While we know that incineration produces little energy at high cost, the capital investments lock in the pattern of turning waste smaller and more toxic preventing for the next 20-25 years the opportunity to practice urban mining, recovering the precious components. This “burning” locks in a destructive process. Even the more sophisticated versions of pyrolysis and plasma reinforce the closed loop approach for unsustainable elements, which will continue to be over-exploited since the worldʼs population continues to grow and ascend to the middle classes.
The broadening practice of burning waste from agriculture ranging from the bagasse of the sugar cane and the black liquor of paper production destroys the opportunity to generate more while eliminating the unneeded. Bagasse should never be incinerated since it provides the core ingredients for mushroom farming, generating ten times more protein than sugar could ever have imagined. Why would one not facilitate a ten fold increase in nutrition knowing that millions of tons of the raw material are available nearly for free? Even the promise of generating energy should not divert our attention to secure more quality food at lower cost. The same logic applies to the processing of pulp and paper. While black liquor has been traditionally viewed as an energy source, due to its high lignin content, it should never have been considered as a fuel in the first place.
Black liquor provides a rich source of biochemicals which could be converted into a feedstock of fine and renewable chemicals including the raw material for cathodes, a core element in the battery which is traditionally produced out of metals, but could now be manufactured out of bio-based materials. The same logic could be applied to antennas, screaming at us at high energy cost and metal intensity competing for waves to reach our phone, computer or internet connection. If the new Superformula by Johan Gielis were widely applied, then we could reduce the stuff related to this standard equipment by factor one hundred since transponders, relays and WiFi senders and receivers will not be needed anymore.
Custom designed and powerful antennas can be produced out of recycled plastics, mining the tremendous excess of thermo-stable petroleum derivates that now pollute the air (due to indiscriminate incineration) and the seas (through accumulation in huge plastic islands that need 500 to 1,000 years to degrade). We can substitute metal antennas, while dramatically cutting back the energy consumption of antennas that is hardly ever debated. Do we realize that each cellphone antenna unit that dots the skies especially along freeways consumes electricity as if it were a Hummer car?
The conversion of our local electricity networks from 110 or 220 Volt Alternate Current (AC) to 12 V Direct Current (DC) while relying on at least seven different sources of renewable energy forms abundant and available in the immediate neighborhood of consumption, cuts dramatically back on copper wires perhaps with factor one hundred, while simplifying all electric and electronic equipment. About 80 percent of energy efficient systems used at home or at the office, operate with electronic devices and controls requiring less than 12V. All electricity needs can be met without the need for converters and inverters, it even reduces the need for pylons and transfer station that dot our urban and peri-urban environment exposing us to poorly understood radiation risks. This would eliminate the charger business. It is another case of substituting something ... with nothing.
If we substitute cotton, the standard natural fiber dressing the world, which consumes an estimated quarter of the worldʼs agro-chemicals and irrigation water with nettle fibers and alginates from algae blooms, then we not only free up land for food production, the nearly 100 million tons of cotton could become more than 100 million tons of protein for human consumption. At the same time we eliminate the chemicals and put water to a better use. The nettles can be farmed on degraded land, clean up the soil from contaminants, and the algae absorb CO2 cleansing our air. This substitutes large scale farming of cotton with small scale industrial units for nettles and alginates processing that are competitive provided we take all the benefits and externalities into account and not simply compare a ton for a ton. We substitute water for irrigation with “no water” since nettles are stronger when stressed in their growth, and algae convert abundant seawater into a base for farming, instead of consuming precious drinking water. This approach not only frees up essentials, it takes the negatives out of the equation.
It is well known that we do not have enough steel, cement and concrete to meet all the housing needs. The 200 million homes required over the next decade in the tropical belt will only be met with poverty and violence if the cement, brick and mortar approach dominates. Since 100 square meters of land reserved to farm bamboo provides sufficient space to “grow” a house every year (after an initial 3 years) for 75 years we can once again add up what is not needed in modern construction industry: no energy, no water, no metals, no additives. Even the preservation of the bamboo can be achieved by converting the non-structural parts into charcoal and the gases are impregnated eliminating the chemicals that are otherwise needed to extend the life of the house by protecting it from insects and fungi. And while we plant thousands of hectares with bamboo forests, we secure that the hydrological cycles provide local drinking water. A 2,000 hectare bamboo forest secures - as is done in Guayaquil (Ecuador) 42 prefabricated homes a day at a cost of less than one thousand dollars. The house can be signed up for in the morning and delivered in the afternoon at a cost of $17 a month. Who said housing is expensive? Who argued that we should reduce our carbon footprint? We can even have a negative carbon footprint by providing social housing low cost.
The infamous PET bottles with PP caps are a disgrace in our modern societies, defying the intelligence of the human race. How can one use a water container with ingredients that do not degrade for hundreds of years, and then invent incineration as the solution to rid ourselves of the excesses of plastics? It seems to have slipped out of our reality checks that unlike plastics, glass cannot be destroyed, only transformed. Whereas plastics can be produced and burned once, that is it. Now if we convert the end-of-life glass into glass foam while consuming CO2, then we eliminate the need for fire retardants, considered indispensable in society. This necessary evil does not have to pursue its search for “less toxic” ingredients. We can simply eliminate the need by choosing materials that will not burn!
The Blue Economy cases that I have been monitoring, supporting, implementing and learning from provide me the proof of concept. Substituting something with nothing is an important guideline to simplify our society that is over-consuming, accumulating stuff that has no exit, while releasing resources that are abundant without stressing the Earth beyond the carrying capacity. Time has come to keep it simple - may I say - stupid!
tʼs time to go beyond the great proposals that guided us 20 years ago.
I remember standing in the grand hall reserved for the heads of state at the Rio Conference in 1992. It was magical to be one of the few who were adorned with the special badge that permitted entry into the sanctum that gathered more heads of state than ever before. Other special guests were Jane Fonda and Ted Turner. We all signed this huge board with declarations of admiration of, commitment to and love for our Mother Earth. Why did I deserve to be there? What made me a darling at this conference? The invitation arranged by the Minister of Foreign Affairs of Colombia was based on the enthusiasm of the international community with an entrepreneur who was taking market share from multinational corporations like Procter & Gamble, Unilever and Henkel with biodegradable soaps, without advertising. We could all celebrate a new business model.
Biodegradability was rightfully considered as one of the key breakthroughs in steering business towards sustainability. I had claimed that my soaps - made from fatty acids derived from palm oil - degrade 3,000 times faster than the standard petroleum-based cleaning products. The response from the industry was fierce: this is a lie. And, after an independent consultant verified my statement, it indeed turned out to be a lie - he concluded that my soaps were “only” 1,000 times faster dissolved into nothing. I suggested that Iʼd be condemned by the courts for misleading the public. Obviously no one took me to court. However, it revealed an amazing reality: the world did not know in 1992 that biodegradation is measured on a logarithmic scale, one that moves from 1 to 10 to 100 to 1000.
It was remarkable that key parameters like biodegradation depend on complex measurements that remain poorly understood. And yet, even when people slowly started to grasp the importance of biodegradation, then we realized that this was not enough to take us towards sustainability. Indeed, it would take another 16 months after the Rio Summit before I would be face to face with the destruction of the rainforest in Indonesia where I realized that a rising demand for these ecological products that clean up the rivers in Europe, and which decrease the risk of allergies are causing a massive annihilation of the habitat of the orang utan. It was a shock and I fell into a depression.
Over the next months I tried and failed to communicate with the key actors in the green movement about this plight that my attempt to clean up the rivers in Europe lead to a disaster in Asia, only to be met by disbelief. It was as if I was destroying their green dream that social and ecological entrepreneurs like Anita Roddick (The Body Shop) and Ben Cohen (Ben&Jerryʼs) and I could indeed change the economy from the grassroots up. I must admit - I failed. Worse, I must admit that I was not in a position to correct my business model.
When you do not know the unintended consequences of your actions you developed with the best of intentions, you are ignorant and perhaps forgiven. However when you know the consequences of your products, processes and business model then you knowingly cause collateral damage which cannot be condoned by society. And if society tolerates this damage, it displays a double moral. Indeed, a thief who steals less will always be considered a thief, whereas a company that reduces pollution by 80 percent is heralded as an environmental success. That cannot be! Whereas I could not image an immediate solution, it did motivate me to look beyond my level of consciousness and frantically started searching for all the connections that at least would avoid the damages. Soon and thanks to a generous team of researchers linked through the United Nations University in Tokyo (Japan) this exploration evolved from avoidance of the bad to the design of multiple and positive effects. I imagined business that does good.
This is how the Zero Emissions Research and Initiatives (ZERI) transformed its philosophy into action, known as The Blue Economy. It is therefore painful to read that the RIO+20 conference continues to live in the world of twenty years ago and has not yet grown into the new context where youth unemployment (one third worldwide under 26) turned chronic, basic needs are still not met since we continue to change details on the fringes without taking a fresh look at reality and accept that the green economy as worked out today is too little, too late, and too expensive. It is disheartening to observe that more time and platform is reserved to representatives of multinational corporations and hardly any for the entrepreneurs who make the difference on the ground.
Then, the RIO+20 Conference continues to plea for the transfer of billions to introduce business models that are based on Cleantech without ever changing the supply chain management, the core business based on core competence paradigm. Yes indeed, reducing pollution was the obvious logic two decades ago, now time has come to eliminate the concept of waste and pollution all together. Can we be that brave for once? We cannot do less bad - we need to do more good! We cannot only give money and technology we believe are best from our industrialized point of view, we need to jointly explore the marvelous opportunities embedded in culture, tradition, biodiversity, using what is abundant, renewable and locally available. Remember after peak oil we are witnessing peak globalization.
An economic model that is based on Breton Woods world financial structures, Chicago University macro-economics and Harvard Business management principles will argue that this discovery of this type of opportunities will not enable us to tackle the urgent crises that humanity is facing, starting with excessive government debt and the need to alleviate poverty through growth. Here is why we differ.
After decades of global negotiations we are not steering our societies towards sustainability, on the contrary, we keep on discovering surprises like the plastic islands in the Pacific Ocean and the acidification of our air and waters beyond repair while the CO2 continues to rise unabated. Therefore it is time to consider changes on the ground, initiatives in the communities, breakthroughs beyond the rule of the existing game and when the innovative business models are implemented, move forward on a broader scale. It is not about economies of scale, it is about clustering these opportunities that shift our material use, build social capital, accrue assets (not debt) and create a learning environment where we can all strive to do better - perhaps forever.
If humanity is prepared to embark on this evolutionary path, then societies can be transformed. Or do we really believe that politicians assisted by an army of lawyers will ever succeed in hammering out the global agreements that turn spaceship Earth towards a worthy livelihood? I must admit - I believed it but as time evolves I perhaps have become a little wiser.
For months we are been bombarded with news reports about the crisis of the Euro. In the end we even believe that the Euro is in trouble. We should be very clear: the Euro is not in crisis. Excessive government spending is the culprit of the crisis, whatever currency is used. Outrageous government spending destabilizes the world economy. It does not matter if it is referred to in Euro or Drachma, Pesetas, or Deutschmarks. Let us be clear: European Governments spent money beyond their means. Unfortunately, the Old Continent is not the only one that reserved the right to mortgage the next two generations of citizens’ tax earnings.
While the excessive spending of governments cannot be condoned, time has come to propose a more solid assessment of “sovereign debt”, or the debt owned by the government. The risk of a loan is directly related to the capacity to repay that same loan. While expenses are one side of the problem, revenues represent the other side. The capacity of governments to pay debt, next to cutting expenses, depends on the capacity to generate revenue. There are some short term opportunities like selling assets and privatizing operations, however the key to long term success of balancing budgets depends equally on the capacity to secure tax revenue.
If we wish to assess the capacity to secure tax income, it is important to study first and foremost the accumulated debt of citizens and corporations as a percentage of annual gross domestic product. If the government is overspending, and the citizens are maintaining a solid savings ratio, while the corporations are not leveraging their balance sheet and investing in future activities as is the case with Germany, then there is no reason to worry (too much). If on the other hand consumer credit is at its limits, estimated at 100 percent of annual income, and if companies have leveraged their balance sheet to the extreme, maintaining a debt/equity ration in excess of three for debt and one for equity, then it is obvious that the government has little flexibility but to cut down spending dramatically, cause excessive pains to all members of society and generate social unrest.
I would like to suggest that instead of panicking over the pericles of the Greeks, we should worry over the American triple debt: the federal government plus the states have more than 150 percent of GDP in debt with the State of California hovering on the brink of bankruptcy. As a percentage of GDP, the US federal and state debt is equal to the Greek one. The real crisis of America (and not Greece) is in the huge accumulated debt of the individual Americans. The private citizens have assembled more debt than their total annual income. Greek individuals have but a fraction of the private debt as a percentage of their revenues and have maintained savings rates in excess of debt accumulation, a rather healthy indicator.
Perhaps the worst debt situation is the state of affairs with Corporate America which has leveraged its assets and mortgaged its cash flow carrying a massive debt. The debt has grown to such proportions with the largest corporations and banks, that these are now deemed too large to fail. Hence, business benefits from a safety net provided by the Government, or better said by future earning of its citizens who will be taxed to pay for the irresponsible decisions made by business and financial policies imposed by shareholders. Whereas a debt equity ratio of 3 to 1 is the norm, many companies have evolved to a ratio of 5 to 1. A 10 to 1 debt/equity ratio is no exception and even tolerated provided that there is cash flow to cover the interest payments. A company like Lehmann Brothers did not even have 3 percent coverage, meaning that its debt equalled 30 and its assets just one! However what is worse, is that publicly held companies that have a healthy one to one ratio will be pressed by shareholders strapped for cash, to either acquire additional assets (complemented with additional debt) or increase dividend pay, draining the money out of the company.
This dramatic triple level of debt (state, corporate and citizen) means that there is hardly any propensity to increases taxes in an effort to reduce government debt. This explains the allergy of Americans towards any additional levies. Everyone is so busy trying to pay off interest on debt that there is no room for additional levies. Whatever can be creamed off is already committed to the financial institutions. Under these circumstances, interest rates are comparable to taxes, the only difference is that these are paid to banks, which are guaranteed their operations through bail-out schemes with government. If citizens and corporations do not pay the interest anymore, then the banks will fold, and the government has to pay the difference - with tax payers’ money. So we are back to square one.
If we assess the European private and business debt (with the exception of the UK), we see a much healthier situation. While we all agree that taxing citizens when the economy slows down is not wise, continuing to bail out the financial institutions, and thus committing tax revenues for approximately two generations to non-productive investments which are not contributing to alleviating social stress in society. The Belgian Government finally reached an agreement on its budget deficit, cutting some €12 billion, but at the same time, it provided €90 billion guarantees to a defunct bank Dexia, compromising the future capacity of its citizens social security. After all the debt accumulated at this magnitude can only paid back by forcing future generations to cough up the cash. The great difference is that in Europe, there is a propensity to impose more taxes, since the capacity to generate income by private individuals and corporations remains strong due to their lack of massive debt. In America, none of that is available. The surprise came when Sweden surpassed America as the highest per capita investor in venture capital stimulating innovation. A country with the most generous social security scheme in Europe shatters the presumption of uninformed protagonists in America that social security in Europe is at the heart of the problem.
So who should we really worry about: the Euro zone, the Greek economy or the Americans? We should worry about them all. However, the latest report on poverty in the USA confirmed that already 24 percent of the population lives below the magic poverty line, and the number of poor Americans has been growing for decades. The American dream does not exist anymore for one quarter of its population. The American dream is the privilege of the one percent that enjoys the wealth of Wall Street. Everyone else is struggling to make ends meet, abate obesity and make end-of-month debt payments. Do you believe that children can imagine a future under these conditions?
Common practice in conflict resolution involves a third party, disconnected from the harsh realities of decades of aggression, to mediate in establishing an agenda that brings sworn enemies around the same table to discuss a common way forward. The agenda includes agreed subjects of conversation, and time to listen to the pain inflicted on each other. There is a great logic in this approach. Few, but convincing examples show how this approach can bring an end to long lasting conflicts, including the one in Northern Ireland and Namibia. However, as the recent statistics on conflicts indicate, we seem to add more aggressions than resolutions. Especially our record on fighting extremism seems to suffer from our incapacity to reconciliate. Politicians eager to impress an unimpressed electorate have a clear preference for the recourse to weapons. The key problem is that we fail to understand that aggression today is the seed of counter aggression in years or decades to come. Thus the question is how we can bring opposing parties together - who have paid for their survival, livelihood and dreams with pain and blood. My experience tells me: do not bring them together at all - but get action on the ground without any further delay.
Families who suffered acts of expropriation, expulsion, oppression, humiliation, extended periods of hunger and exploitation, indiscriminate incarceration with innocent children and mothers killed in collateral damage condoned by society on both sides have a hard time imagining ever sitting around the same table with the aggressor. And if they ever do, no one will trust the other, whatever the status of the mediator, whatever the financial and political prowess she or he brings along to entice the parties to talk about a possible agreement. Whenever there are two opposing parties who have two opposing dreams, it is indispensable to elevate the nightmare of one - which is the dream of the other - into a broader context while focusing on the simple basics of water, food, shelter, and health. If you have a problem, bring another one to the table that needs a resolution, and if there are three situations in need of out of the box breakthroughs, even better.
The strategy of bringing the core problems to an outsider for resolution, independent of a physical meeting with the arch enemies, could move societies in conflict towards a peaceful solution. Quick, creative and pragmatic solutions to immediate problems can be embraced by all. After all, a dream is more than a declaration of independence. A dream consists of the capacity to respond to basic needs, especially when it comes to water, food, housing, and jobs. Therefore, the conflict resolution that focuses on getting quick results to priority needs should be the first step in a long healing process. As soon as the hungry are fed, the unemployed youth has jobs, and shelter is provided, then self-confidence builds up. How else can be expect to find any agreement on the bigger picture.
As long as conflict resolution first relies on an agreement on the agendas as a pre-condition to meet, we are facing hostile responses and tedious negotiations with little chance of success. And while patience has always been preached in any resolution process, what we should need is impatience in getting key issues resolved immediately. People who have been neglected and mistreated for generations cannot be requested to take time. We know all too well that the buoyancy of the young generation that has seen its parents suffer beyond reason requires fast, clean and clear results on the ground and now. We have to celebrate that impatience, and work with this tremendous energy as a pre-condition to success.
While this blog on Conflict Resolution is detailed in a separate article with a few concrete cases, and a detailed methodology the bottom line is simple: imagine pathways forward where everyone realizes their dreams, step by step - here and now. And since words can never convince anyone that the only way to realize once’s dream is that the other achieves a dream, deeds though do convince. The attainment of the best for one is actually the precondition for the opposing party to also achieve the best. And when two parties are on a pathway to reach all of their goals, then these ancient enemies empower others who have not been part of the inter-generational conflict to also achieve their best. This creates conditions propitious for a long lasting peace.
Whereas I do not claim that this is the only way to achieve a peaceful society, experience teaches me that it is a novel form of getting things done on the ground, build up the confidence that peace at home and in our minds can be achieved, while spreading the enthusiasm that more can be done - even with the enemy. And when the opponents know that only in the end - when a few dreams have been achieved - there is a need to meet the enemy- that broader peace process can be put on track faster than we believe. We all know that the absence of war is not peace. What we should now realize it that conflict will always be part of reality. However, when a conflict emerges we should embrace it as an opportunity for societies to reach a higher level of common purpose in life, first and foremost within one’s own culture, religion and language.
Sustainability has been defined as “The capacity to respond to the basic needs of all with what we have”. If we apply this logic to energy, then we are forced to rethink our present model. Indeed, ever since the concept of a centralized production and distribution of electricity emerged over a century ago, potential local power sources have seldom been taken into account. If we neglect this portfolio of energies that can be accessed where we are and with what we have then we will continue pay high cost both in terms of price and pollution. If on the other hand we switch our mindset and integrate multiple local power and heat sources, then our energy balance could evolve from scarcity to abundance, at lower cost, increased flexibility, while we can finally cut back on contamination. The surprise effect may even be the lowering of local taxes.
Green energy has always been associated with increased costs. Somehow the system of generation and distribution of power convinced consumer and government alike that whatever is good for health and the environment requires a premium. How often are we not requested to perform a cost benefit analysis that amounted to business as usual? The classical management adagio of “core business and core competence” lead to the imposition of the economies of scale, based on few energy sources aimed to reduce the cost per kilowatt hour (kWhr) for the producer. The energy mix today is driven by the capacity to respond to base load and peak demand at predictable rates with guaranteed margins, passing the additional cost on to the client. This resulted in the adoption of nuclear, coal, fuel and natural gas as the core sources. Renewables were typically dismissed since - as the argument goes - the sun only shines 5 hours per day, and wind is unreliable. Then renewables need back-up and storage. This increases the cost borne by the customer or requires subsidies from (bankrupt) governments which in the end are also paid by citizens through higher taxes.
Time has come to reassess this logic. There are two guiding principles of The Blue Economy that determine the identification of a new energy mix beyond green power. First, use what you have. Second, search for multiple benefits. To succeed in this endeavor requires a change of the rules of the game. It has been widely overlooked that our grid today distributes power at 240 V in alternate current (AC). Nearly all renewable energy is generated in direct current (DC). The integration of DC into the grid requires additional capital. If we were to create local 12V DC grids, then many well known but little used renewables would immediately become economically viable without major investments.
The AC enigma made us neglect the potential of all renewables. Photovoltaic cells are only used on one side, even though these could generate more power when sun light is exposed on both sides, especially when concentrated solar is applied to the bottom. If this power were fed straight into a 12V DC local network, then it would outcompete the power supplied by the grid. Unfortunately, electric engineers have been groomed in the AC logic, and off-the-grid homes or communities have been equated with investments in back-up batteries, increasing the cost to the consumer beyond reason. Only the very green and wealthy could afford this option.
Anyone committed to renewable energy produces predominantly power in DC, then converts it to AC supplying the grid (sometimes with feed-in tariffs), only to reconvert it back to DC at the point of consumption. Do we realize the inefficiency and the cost of this? The electronic engineers, driven by energy efficiency have chosen DC as the standard. Over 80 percent of home and office appliances driven by micro-electronics operate in DC, which combines processing capacity with mobility and miniaturization. Suffice to check the number of chargers, which actually are AC/DC converters that are scattered through our homes to realize the inefficiencies that we tacitly tolerate.
Time has come to rethink the decision on the AC standard that has been made over a century ago. The creation of local DC-grids linked to local power sources that can easily supply power in DC represents a new competitive model with high efficiency reducing energy requirements up to 60 percent without compromising on performance or comfort. A local DC grid also influences health and safety. It reduces the risk of fire and electrocution, cuts wiring, metals and maintenance. The switch to local portfolio of DC power is only a first step, additional adjustments are required including a smarter exploitation of available sources. The first and foremost set of opportunities are embedded in a better management of water.
Home owners and office users will quickly agree: water is key. It always has come as a surprise how little effort building designers make to use the laws of physics to improve the quality of life in general and energy efficiency in particular. A fresh look at water could change that. For example, a thermosyphon functions all year, with hot water rising predictably to the top. Today, residential and office buildings rely on pumps - with increased cost and energy consumption. If on the other hand solar energy, or even just luminescence were used to generate electricity and to heat water, exploiting both sides of photovoltaic panels as provided by the Swedish innovation company Solarus AB, then four to six units are sufficient to provide electricity, hot water and cooling to a family home in Scandinavia. Multifunctional technologies provide multiple benefits, reducing the cost per kWhr.
Whereas the thermosyphon gets water to top of the building, the downward flow of water - predictable with precision of 6 liters per minute - could generate power while adding extra benefits. For example, the flow could power the production of ozone to purify water on site from dissolved oxygen in the water, and could destroy elemental chlorine at the same time. If the water were stored in tanks at 80 or even 90 degrees, then water can be delivered at 38-40 degrees, providing additional DC power through a solid state heat exchange exploiting the 40-50 degrees differential. This power source used to be considered negligible, since the amount of power that could ultimately be fed into the AC grid is trivial.
We can continue the logic of “use what you have to gain multiple benefits” to waste water, and solid waste management. Any building or block in a city hands over its waste to a service provider against a fixed cost per cubic meter or ton. Insights into the biochemical reactions of the slurry from black water and organic solid waste permitted to generate four times more methane gas than previously considered viable. These waste streams, guaranteed as long as people are present, now provides a stable and cheap source of methane. If one combines this smart chemistry provided by Scandinavian Biogas with the vortex technology of AgroPlas from the UK, one has on demand access to local hydrogen to power fuel cells, with solid carbon powder of commercial value as the sole residue. While this will be readily dismissed by the experts in the field since it sounds to good to be true, it is already reality. Better it is competitive, thus it will change the rules of the game.
The biggest challenge we face is that too few building designers and energy experts have been trained to think along these lines. In addition, the few who have this capacity lack access to off-the-shelf tools and equipment to implement this. The few opportunities and options described plus dozen others presented on <www.blueeconomy.de> are therefore understandably dismissed as unviable, futuristic or at least too costly. Time has come to navigate from fantasy to a vision based on science so that these opportunities can soon become mainstream. This requires leadership from a few, and a preparedness to leave our comfort zones. Then we can embrace the shared need to steer business and society towards sustainability - with what we have.
The aim of this blog is to present a fresh look at realities around us. Whereas I do not pretend to present the truth nor a definite position, I do wish to push the reader to think beyond the obvious. After all, time has come to dramatically improve the plight of millions, and that requires more than the predictable. Sometimes it forces us into spheres of discomfort.