Renewable Matter # 1 / Next Europe

It Takes an Integrated and Connected Knowledge

by Gunter Pauli

The onslaught of bad news about the environment, poverty, unemployment, human rights abuses and the inability of policy makers to face up to global crises 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 continues 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 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 an integrated and connected knowledge that is required to create a vision indispensable to design fresh and effective pathways forward. 

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 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. 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. 

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 first to basic needs of all, circulates the newly gained purchasing power in the local communities and generates capital, especially social capital while strengthening the Commons. We have to evolve from consuming something once through an authoritative linear supply chain management, to unending cascading of nutrients, matter and energy, like ecosystems do, and a biobased economy can, backed up with a creative upcycling of minerals. This not only strengthens the local economy, it creates resilience against global shifts and shocks.

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, and rely increasingly on regenerating resources within the limits of its carrying capacity. This fundamental shift forces companies out of the straight jacket to only focus on one product portfolio. The acceptance of this novel – yet easily understood strategy – is a major challenge, since it is fundamentally different from what Mba’s have been trained to pursue as 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, entrepreneur and the communities while it could put nature back on its evolutionary path – not just protect it from the ignorant consumer. 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! 

This is not the advent of the end of globalization, it is the beginning of something much better!