Digital ecosystems are where we’re all increasingly spending time, be that the behemoth that is Amazon, the bank app on your phone or any of the numerous networks of inter-connected companies or products. What we are seeing though, is a convergence of those systems with the inexorable and vital move towards the ideas of natural capitalism.
This is not a new idea. Natural Capitalism: Creating the Next Industrial Revolution is a book released in 1999 on environmental economics co-authored by Paul Hawken, Amory Lovins and Hunter Lovins. The book talks about the global economy as being dependent on natural resources and ecosystem services that nature provides. The authors posit that it is only through recognising relationship with the Earth’s resources can businesses, and the people they support, exist, and prosper.
They claim that a more harmonious co-existence is possible and “such an economy would offer a stunning new set of opportunities for all of society, amounting to no less than the next industrial revolution.” Over 20 years on, the book has never been more relevant.
An important element of Natural Capitalism is waste reduction. The key to achieving that is via circular and regenerative systems that extend the life and usefulness of assets over a longer period or repurposes them to return into society. The authors present a plan not only for solving the problems but turning them into a business opportunity, and this financial incentive is one of the key elements.
Ask a person to recycle a plastic bottle and they will more than likely ignore that call, despite the fact they know recycling is an inherently good thing. But if you tell them that recycling plastic bottles in a Reverse Vending Machine, will give them a reward for doing so then the person is far more likely to act.
The same principle works with capitalism, as companies act in their self-interest, and markets guide that through fluctuating prices. Previously, the problem was that what’s in the best interests of a company was often at odds with what was in the best interests of people, the environment or the planet. But now we are seeing that changing. The incentive for companies is now increasingly apparent.
Here’s one big example. A report from Carbon Tracker in 2020 revealed that it’s now cheaper to invest in renewables than in coal. Back in 2009, building a new solar farm was 223 per cent more expensive than building a new coal plant, but now electricity from a new coal plant is 177 per cent more expensive than from new solar panels. As a result, people are increasingly looking to invest in solar.
A tipping point has been reached. Forbes points out that renewables are on track to overtake fossil fuels as the world’s largest source of electricity within five years, and accordingly, investors are flocking to sustainable energy as the must-own asset of the future.
The Global Commission on Economy and Climate says that a new climate economy, based in part on circular economy principles, could deliver at least $26 trillion in economic benefits by 2030, compared with business as usual. And the customer base is growing every day. Industrialists and economists can change to work in harmony with the environment. Many of them already are doing so — and improving the profitability of their business in the process.
The circular economy
In her book, Doughnut Economics, Kate Raworth states: “the last 200 years of industrial activity have been based upon a linear industrial system whose design is inherently degenerative.” It’s a system that she describes as “the cradle-to-grave manufacturing supply chain of take, make, use, lose…”
But manufacturing is beginning a change from degenerative to regenerative through the circular economy. The circular economy creates more value and is designed to reduce waste. Value is maintained for as long as possible and digital ecosystems that we increasingly use are helping to make that possible.
At re.life we’ll soon be launching re.life market which will work as a virtual marketplace for business-to-business buying and selling of recovered commodities such as scrap metal, recyclable plastic, mixed fibres, all via a real-time interface on your smartphone. That digital ecosystem will connect people in a digital market, creating an economy just as was described in Natural Capitalism.
This can be augmented with our existing re.life collect service, we are already enabling people via a mobile app, to collect or dispose of heavy, bulky items from one location to another, thus keeping them within the circular economy.
In an age when six billion people — likely to grow to nine billion in a lifetime — are using up resources at accelerating rates, it’s increasingly the only way to grow an economy without depleting the natural capital upon which it’s based.
While the economy worked in the past by largely converting raw materials into useful products, which are used and then discarded, the new digital ecosystems are facilitating a different economy using the principles of Natural Capatalism. And it’s a win-win scenario for everyone.