Cranfield University Alumni Symposium Keynote: 20/20 Vision:
Global Megatrends and the drive to a Circular Economy: Professor
David Grayson CBE, Professor of Corporate Responsibility, and
director of the Doughty Centre for Corporate Responsibility,
Cranfield University
Just over a year ago, the Oxford Martin School published the report of
their commission for future generations, entitled “Now for the longterm.” The commission was chaired by the former WTO directorgeneral Pascal Lamy and included nearly 20 other, distinguished
international figures such as Arianna Huffington, Mo Ibrahim, Nandan
Nilekani, - former CEO, Infosys, Chris Patten, Nobel Laureate Amartya
Sen, Nicholas Stern (Lord Stern of Brentford), and Jean-Claude Trichet,
former President, European Central Bank.
The report starts with the arresting statement: “NOW is the best time
in history to be alive.”
I start one of my MBA lectures with that statement and ask students
whether they share the view “NOW is the best time in history to be
alive.”
- And I ask them what they are going to do to help make that
statement a reality!
“Now for the long-view” justifies their statement as follows:
“Our world has experienced a sustained period of positive change. The
average person is about eight times richer than a century ago, nearly
one billion people have been lifted out of extreme poverty over the
past two decades, living standards have soared, life expectancy has
risen, the threat of war between great powers has declined, and our
genetic code and universe have been unlocked in previously
inconceivable ways. Many of today’s goods are unimaginable without
collective contributions from different parts of the world, through
which more of us can move freely with a passport or visa, provided we
have the means to do so. Our world is functionally smaller, and its
possibilities are bigger and brighter than ever before. Never before
have so many people been optimistic about their future.”
But then they caveat:
“While the future is full of opportunity arising from the extraordinary
advances of recent decades, it is also highly uncertain and
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characterised by growing systemic risks.”1
They – and several other reports such as KPMG’s Expect the
Unexpected, PWC’s 2014 Global Megatrends review2 – explain these
systemic risks in terms of global mega-trends or mega-forces. Let me
try and summarise and synthesise these different analyses, which
provide the context for why ideas like Circular Economy and other new
business models are so important.
DEMOGRAPHIC AND SOCIAL CHANGE
There is a website where you can see how many people were alive
when you were born. I was born in 1955. Just under 2.8billion people
were alive then. If I live as long as my mum, now in her 93 year and
still living in the family home in Sheffield, then by the time I am her
age, there will be 9 – 9.5 billion people on the planet. In the course of
one person’s life-time – mine – that is a 3-4fold increase in the
number of people on the planet.
And as we know, it is not just many more people. Many more of them
will live in cities. Many more of them will aspire to the same standard
of living as you and I take for granted. Depending on whose estimates
you use, there will be between 2-3 billion more middle-class
consumers on the planet by 2030.
We had the then UK Government Chief Scientist, Prof Sir John
Beddington speaking here in this auditorium three years ago. He
talked then about a Perfect Storm. By 2030, the world will need 50%
more energy, 50% more food, 30% more water – and all that whilst
dealing with the challenge of Climate Change.
A year later, the US National Intelligence Council published the latest
in their four yearly trend reports: Global Trends 2030: Alternative
Worlds. Their estimate for the increase in food required is lower than
that quoted by Prof Beddington, but otherwise, they confirmed his
Perfect Storm message: 8.3billion people in 2030, will require 50%
more energy, 40% more water, and the NIC suggests, 35% more food.
1
Now for the Long Term: The Report of the Oxford Martin Commission for Future Generations
– 2013 http://www.oxfordmartin.ox.ac.uk/downloads/commission/Oxford_Martin_Now_fo
r_the_Long_Term.pdf
2
Expect the Unexpected: Building Business Value in a Changing World, KPMG 2012;
www.pwc.com/gx/en/issues/megatrends/index.jhtml
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I am finding many business leaders and their advisers are seeing water
as a more immediate threat than Climate Change – although, of
course, inextricably linked. Earlier this week, the NGO CDP’s Global
Water Report 2014, ‘From water risk to value creation,” was launched.
Two-thirds of the world's largest companies are reporting exposure to
water risks, some of which have potential to limit growth. The news
comes amid mounting shareholder concern around the business
impacts from water scarcity, accessibility and poor water quality.
CDP’s latest annual global water report, finds that 68 percent of
businesses report exposure to water risk that could generate a
substantive change in their business, operations or revenue. 22
percent of companies anticipate that issues around water could
actually limit the growth of their business.
The analysis is based on the water management data of 174
companies listed on the FTSE Global 500 Equity Index provided to CDP
at the request of 573 institutional investors with US$60 trillion in
assets. The number of investors pressing for corporate accountability
on water and related information through CDP has increased by more
than 300 percent since 2010, reflecting growing shareholder attention
to water challenges.
Given almost half of the 853 reported risks — such as closure of
operations and decrease in shareholder value — are expected to
impact now or in the next three years, companies could quickly find
themselves at a competitive disadvantage. 3
As the authoritative US NIC Alternative Worlds report states:
“Climate change will worsen the outlook for the availability of these
critical resources. “ Only last weekend we had the latest report from
the IPCC signed off by governments around the world and concluding:
Climate change is set to inflict “severe, widespread, and irreversible
impacts” on people and the natural world unless carbon emissions are
cut sharply and rapidly.
The NIC report says:
“We are not necessarily headed into a world of scarcities, but
policymakers and their private sector partners will need to be
proactive to avoid such a future. Many countries probably won’t
www.sustainablebrands.com/news_and_views/next_economy/
sustainable_brands/
cdp_identifies_853_water_risks_threatening_growth_wor
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have the wherewithal to avoid food and water shortages without
massive help from outside. Tackling problems pertaining to one
commodity won’t be possible without affecting supply and
demand for the others. Agriculture is highly dependent on
accessibility to adequate sources of water as well as on energyrich fertilizers. Hydropower is a significant source of energy for
some regions while new sources of energy—such as biofuels—
threaten to exacerbate the potential for food shortages.
There is as much scope for negative tradeoffs as there is the
potential for positive synergies. Agricultural productivity in
Africa, particularly, will require a sea change to avoid shortages.
Unlike Asia and South America, which have achieved significant
improvements in agricultural production per capita, Africa has
only recently returned to 1970s’ levels.”4
Unsurprisingly, organisations like the World Economic Forum talk of
the Food-Water-Energy Security Nexus. They principally mean security
of supply, but as Britain’s Ministry of Defence had already concluded in
2009, there is a significant correlation between multiple stress zones
and recent conflicts5 .
MATERIALS SCARCITY
Increasing populations, increasing affluent populations also directly
impacts another major megatrend: Materials scarcity.
It might be argued that we don’t need to worry about materials. After
all, during the 20th century despite increasing populations and rising
affluence, commodity prices halved. But during the last ten years,
rising commodity prices have more than wiped out those gains and
cost almost as much again in reverse. Companies are also having to go
to more extreme locations to produce raw materials – and that, of
course, produces greater environmental and social risks.
To give just one example: demand for steel is projected to increase
80% between 2010 and 2030.
As the Carbon Trust has asked: Are businesses sleep-walking into a
resource crunch?6 Just look at this data about when businesses think
4
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https://publicintelligence.net/global-trends-2030/
MOD Strategic Trends Programme - Global Strategic Trends out to 2040
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Source: https://www.carbontrust.com/media/227059/business-resource-crunch-infographiccarbon-trust.pdf
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that they will need to make significant changes in their business
operations to combat resource-scarcity (six years plus) versus when
they will actually have to do so7. Businesses believe a resourceconstricted way will impact them in a number of ways, but admit they
are doing little yet in response. 8
The management consultancy McKinsey & Co ask: “Are you ready for
the resource revolution?”9
Meeting increasing global demand requires dramatically improving
resource productivity, argues a March 2014 McKinsey Quarterly article.
McKinsey argue that a $1 trillion investment per annum is needed to
tackle the resource revolution.
In their book, Resource Revolution: How to Capture the Biggest
Business Opportunity in a Century (New Harvest, April 2014), Stefan
Heck who is a consulting professor at Stanford and an alumnus of
McKinsey’s Stamford office and Matt Rogers a current McKinsey
director refer back to Adam Smith’s The Wealth of Nations (1776),
which identified three primary business inputs: labor, capital, and land
(defined broadly as any resource that can be produced or mined from
land or disposed of as waste on it). Heck and Rogers write:
“The two industrial revolutions the world has thus far seen focused
primarily on labor and capital. The first gave us factories and limitedliability corporations to drive growth at scale. The second, from the
late 1800s to the early 1900s, added petroleum, the electric grid, the
assembly line, cars, and skyscrapers with elevators and airconditioning, and it created scientific management, thus enabling
corporate globalization. But neither revolution focused on Smith’s
third input: land and natural resources. “
Heck and Rogers argue:
• “Combining information technology, nanoscale-materials science,
and biology with industrial technology yields substantial
productivity increases.
• Achieving high-productivity economic growth in the developing
www.carbontrust.com/about-us/press/2012/12/businessessleepwalking-into-a-resource-crunch
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Source: https://www.carbontrust.com/media/227059/business-resource-crunch-infographiccarbon-trust.pdf
/www.mckinsey.com/insights/sustainability/
are_you_ready_for_the_resource_revolution
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world to support the 2.5 billion new members of the middle
class presents the largest wealth-creation opportunity in a
century.
• Capturing these opportunities will require new management
approaches.
Rather than settling for historic resource-productivity improvement
rates of one to two percentage points a year, leaders must deliver
productivity gains of 50 percent or so every few years.”
They argue this will involve five distinct approaches, either individually
or in some combination:
•
substitution (the replacing of costly, clunky, or scarce materials
with less scarce, cheaper, and higher-performing ones);
•
optimization (embedding software in resource-intensive
industries to improve, dramatically, how companies produce and
use scarce resources);
•
virtualization (moving processes out of the physical world);
•
circularity (finding value in products after their initial use)1
•
and waste elimination (greater efficiency, achieved by means
including the redesign of products and services).
It might be argued that the Circular Economy has become a shorthand for all these.
Spotting substitution opportunities takes hard work. Apple and GE
have gone through the periodic table element by element, assessing
which ones pose the biggest risks for supply, costs, and regulation.
These companies have developed substitution opportunities for each
risky element.
Another way for companies to boost the productivity of existing
resources is to optimize their use—for instance, by integrating
software into traditional industrial equipment or providing heavy
equipment as a service. GE, for example, outfits its jet engines with
advanced software and sensors that yield important real-time
maintenance data midflight. As a result, planes can radio ahead with
spare parts and servicing requirements before they land. GE often
prices its maintenance per hour of flight, so anticipating and
streamlining maintenance activities is critical to business profitability.
During the MBA study tours that I have led to China for the last seven
years, we have had the opportunity to tour the GE Aviation Control
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Centre in Shanghai which is tracking all the planes they are servicing.
I was in Lagos last Thursday for a Nigerian business summit on
sustainability organized by the Lagos Business School. We were talking
there about how sustainability champions from emerging markets
have embraced the challenges and the opportunities of sustainability;
and that typically such champions do three things: They:
1. Proactively turn constraints into opportunities through innovation
2. Embed sustainability in their company culture
3.
Actively shape their business environments10.
In the Doughty Centre, we are working on all three of these topics with
researchers looking at responsible innovation, sustainability culture,
and I have been looking at business collaborations.
To innovate effectively, WEF and BCG argue, New Sustainability
Champions focus attention on these key points:
• They address lack of resources. One response to a current or future
shortage of a particular resource is to find ways to reduce the amount
used. While this often makes sense from an efficiency viewpoint, it also
increases the longevity of the business by preserving a critical
resource. Importantly, Champions recognize that the reductions need
not be limited to their operations but can, and should, apply to their
suppliers and users.
Another way in which New Sustainability Champions turn resource
constraints into opportunities is by exploiting the by-products of
other companies’ outputs or processes.
Frugal innovation
One of the key factors behind this growth is a different mindset when
it comes to innovation, explains business strategist and author Navi
Radjou. He believes western companies have been guilty of
“industrialising the creative process”, introducing resource-intensive
procedures that chug along to the tune of “more with more” but are no
longer sustainable in a resource-constrained world. “There is a
growing awareness that there needs to be a new model for both
producing and consuming that focuses on doing better with less,” he
explains.
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World Economic Forum / BCG New Sustainability Champions 2011
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It’s an idea epitomised by the concept of frugal innovation, an attitude
often born of necessity, where entrepreneurs view the lack of water, or
a limited electricity supply, not as a constraint but as a creative
opportunity. In India, it’s called the “jugaad”, a Hindi word that roughly
translates as “innovative fix” or “improvised solution”.
Brazilians call it jeitinho, the Chinese zizhu chuangxin, the Kenyans
jua kai. Tellingly, there’s no such word in English. The closest we get is
“make do and mend”, which doesn’t quite have the same kick.
“Can we be frugal and innovative? Can we do better with less? This is
an area where emerging market companies have an advantage
because, by default, they have to deal with less - they don’t have the
money or resources,” says Radjou.
“Scarcity is what drives this frugal mindset – and the world is waking
up to it with economic recession in the west,” he adds11.
Virtualization
Back to “Resource Revolution: How to Capture the Biggest Business
Opportunity in a Century.”
As a thought experiment, you might create a list of physical objects or
products that you no longer own or use, even though they were an
everyday part of your life just five or ten years ago. For many people,
that list might well include traditional calculators, paper calendars,
cameras, alarm clocks, or photo albums. All of these have been
rendered virtual by smartphone technology.
Virtualization means moving activities out of the physical world or
simply not doing things, because they’ve been automated.
Optimization and Virtualization are possible because of another
megatrend and that is Technology and extreme connectivity. By 2020,
there will be over 5 billion internet users, with over half of them
accessing the internet over handheld tablet devices and 80 billion
connected devices worldwide.
The Anthropocene
Can business take sustainability cues from the emerging markets?
www.theguardian.com/sustainable-business/2014/oct/13/businesssustainability-emerging-markets
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Back in 2011, The Economist ran the cover story "Welcome to the
Anthropocene – Geology's new age."
"Rather than placing us still in the Holocene, a peculiarly stable era
that began only around 10,000 years ago, the geologists say we are
already living in the Anthropocene: the age of man."
I first heard the concept a year earlier when the distinguished diplomat
and environmentalist Sir Crispin Tickell spoke about it at our Cranfield
Corporate Responsibility Network.
The Economist's leading article says of the Anthropocene:
“What geologists choose to call a period of history normally matters
little to the rest of mankind… The Anthropocene is different. It is one
of those moments wherea scientific realisation, like Copernicus
grasping that the Earth goes round the sun, could fundamentally
change people's view of things far beyond science. It means more than
rewriting some textbooks. It means thinking afresh about the
relationship between people and their world and acting accordingly."
The editorial goes on to argue:
"The challenge of the Anthropocene is to use human ingenuity to set
things up so that the planet can accomplish its 21st-century task …
For humans to be intimately involved in many interconnected
processes at a planetary scale carries huge risks. But it is possible to
add to the planet's resilience, often through simple and piecemeal
actions, if they are well thought through. And one of the messages of
the Anthropocene is that piecemeal actions can quickly add up to
planetary change."
MEGATREND: POLLUTION AND BIO-DIVERSITY LOSS
Humankind’s seemingly voracious appetite for stuff is causing
pollution and serious bio-diversity loss.
A few weeks ago, I was chairing the judges for the 2014 Responsible
Business Awards and organised by Ethical Corporation magazine. One
of our winners was MBA Polymers. It is a fascinating company which I
had not come across before. MBA Polymers is a recycling company
with operations globally that recovers plastics from end-of-life
durable goods. They specialize in recycling durable goods from waste
streams such as electronics and auto-shredder residue, using their
patented technology for extracting and recycling plastic from
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computers, printers, mobile phones, televisions, fax machines,
refrigerators, vacuum cleaners, and other forms of waste.
By coincidence, last month, I met the visionary founder and CEO of
MBA Polymers: Mike Biddle. Small world – one of his first investors was
Doughty-Hanson – the Private Equity fund fc0-ounded by the late
Nigel Doughty, the founding sponsor of the Doughty Centre here at
Cranfield: www.shft.com/watching/the-big-shft-mike-biddleplastics-pioneer
Mike Biddle is eloquent on the need to switch to the Circular Economy.
Where most see garbage, Mike sees above the ground mines.12
He talks about the pollution caused by discarded plastic. This is an
installation from the Zurich Museum of Design which shows the
volume of plastic thrown away every fifteen seconds. Much of it ends
up in the oceans, where it acts like a sponge, hovering up lots of other
pollutants. This is actually rather effective, except that then the plastic
gets eaten by fish, which then get caught and eaten by humans.
MBA polymers is working with companies like Coca-Cola and
Electrolux to recycle plastic. Using recycled PET bottles produced by
MBA Polymers, Coca-Cola Enterprises, for example, have reduced their
CO2 emissions by 182,000MT 2007-13 – that is an average of
26,000MT p.a. – 2MT per employee.
I am going to be visiting MBA Polymers newest and most advanced
recycling plant in the world, in Workshop, Nottinghamshire.
Significantly, one of MBA Polymers biggest plants is in China,
reflecting the final megatrend I want to comment on – the shift of
economic and political power from North to South and West to East. At
some stage in the next decade or less, China will overtake the USA in
purchasing power parity to become once again the world-s largest
economy. If you take the long-view this is, of course, as we get
repeatedly reminded on our Cranfield MBA study tours to China,
simply the restoration of the status quo ante. China has been the
world’s largest economy for 18 of the last 20 centuries. The reemergence of China is part of the much bigger shift in economic and
political power.
On current trends, the aggregate purchasing power of the ‘E7’
emerging economies – Brazil, China, India, Indonesia, Mexico, Russia
https://wealth.barclays.com/en_gb/smartinvestor/trends/You-seegarbage-we-see-above-ground-mines/rare-earths.html
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and Turkey – will overtake that of the G7 by 2030. By 2015, Asia
Pacific will have a larger middle class than Europe and North America
combined.
So a series of global megatrends which are driving business model
innovation: "A new or different system of creating, delivering &
capturing value."
DEFINING CIRCULAR ECONOMY
We are talking today about one of the potentially most transformative
of these new business models: Circular Economy and how to thrive in
the Circular Economy.
There is a good introduction to the Circular Economy and the
challenges and opportunities it represents for business written by
Arpita Raksit and published by the consultancy The Corporate
Citizenship Company : “Ahead of the Curve. How the circular economy
can unlock business value” 13, Corporate Citizenship, 2014 which you
can download for free from their website.
Our current economic model is linear: Take, make, use, dispose.
Circular Economy seeks to create value by:
-
reconfiguring – what goes into products
re-designing – for greater durability
re-using products
repairing and re-using
recycling
and using renewable energy in production.
It may also involve a switch to servitization – for example, B&Q
renting you tools rather than selling them to you.
Bart Goetzee, senior group sustainability director at Philips explains
that Circular Economy is “an industrial system that is restorative by
design which means you can focus on economic growth without the
increased use of natural resources.”
A group of faculty from different parts of the School of Management
have been looking at one company which has embraced Circular
economy or as it was previously known, Cradle-to-Cradle. This is the
“Ahead of the Curve. How the circular economy can unlock business
value”, Corporate Citizenship, 2014.
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Dutch headquartered carpet- and floor-tile maker Desso. We are
producing a series of business school teaching cases looking at the
Desso business transformation, including separate cases on
marketing, suppy chain, innovation, leadership, programmemanagement, Human Resources and sustainability.
DESSO is behind products that serve a multitude of carpeting
businesses, government offices, residential homes, airplanes and even
athletic fields. It operates in an industry currently dominated by linear
thinking – in 2010 alone, 600 thousand tons of floor covering
materials were thrown away and only 1 percent recycled.
In 2008, a new management team and new owners committed the
company to Cradle-to-Cradle or Circular Economy. By 2020, the
company hopes to use 100 percent renewable energy in production
and corporate facilities. It also aims to have 100 percent of its carpet
tiles Cradle to Cradle® certified. The plan is to address carpet tile
material first, and then move into sport systems and wool carpets as
Cradle to Cradle® success gains momentum. Ultimately, DESSO
intends to transition to a service-based model in which it leases out its
carpets and later takes back the old tiles in order to recycle and reuse
the underlying materials.
In 2008, DESSO initiated its Take Back Program, eventually renamed to
the DESSO Refinity Program, which takes old carpet backing material
and separates yarn and fibers for reuse. The used depolarized yarn is
then returned to material manufactures to create new durable yarn in
any colour. The used yarn can also be upcycled to produce expensive,
durable plastic.
Further, since 2010, DESSO has partnered with Aquafil, a yarn
supplier, to embrace the initiative “Healthy Seas, a Journey from Waste
to Wear.” As a result of this collaboration, DESSO now uses ECONYL
yarn made of material from ocean waste like fishnets. ECONYL is 100%
recyclable and maintains durability even when repeatedly reused.
DESSO’s EcoBase carpet tiles have been awarded Cradle to Cradle’s
Silver Certificate for eliminating 97 percent of toxic materials. The
company also reduced CO2 emissions by 50 percent between 2007
and 2011. Perhaps most notably, over 90 percent of its commercial
carpet tile is now Cradle to Cradle® certified. And bottom-line
performance has improved markedly.
Another company that has outperformed the market is Umicore, the
Belgium-headquartered company which has transformed itself from a
mining business into a metals refining business. I had the privilege of
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interviewing Thomas Leysen, the former CEO and now chairman of
Umicore a few weeks ago and to learn of his business vision.
CIRCULAR ECONOMY AND THE BUSINESS ZEITGEIST
Now I have always been healthily sceptical about placing too much
faith in presentations about future trends.
I remember the ditty of the economist Sir Alec Cairncross:
“A trend is a trend is a trend.
But the question is, will it bend?
Will it alter its course through some unforeseen force
and come to a premature end?”
However, business leaders are recognising the importance of
sustainable development. You could say, it is the new business
zeitgeist.
As Justin Keeble may tell us more later, Accenture has run a series of
triennial CEO surveys with the UN Global Compact. In their last survey
in 2013, they found a significant uptake in interest in Circular
Economy.
PwC’s latest Global CEO Survey (‘Fit for the future - Capitalising on
global trends’):
Most CEOs surveyed agree that business has social as well as financial
responsibilities.
80% say it is important for their business to measure and reduce its
environment footprint.
Over three-quarters think that satisfying wider societal needs and
protecting the interests of future generations is important to their
business.
74% agree that measuring and reporting non-financial impacts
contributes to their business’ long-term success.
69% say that the purpose of business is to balance the interests of all
stakeholders.
In addition, McKinsey & Co's ‘Global Sustainability Survey 2014’ also
shows an increasing proportion of CEOs identifying sustainability
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either as top priority or a top three priority for them (up from 3% and
31% respectively in 2010, to 13% and 36% respectively in 2014).
What are the purposes and responsibilities of business, now and in the
future? This is the topic which Coca-Cola Enterprises commissioned
our team at the Doughty Centre for Corporate Responsibility at
Cranfield School of Management to explore ahead of their 2014 Future
for Sustainability Summit.
Working with our colleagues at the Financial Times and the
international organisation Net Impact, we conducted interviews and
surveys with current and future European business leaders – which
included over 50 serving CEOs and almost 150 MBA and MSc students
and recent business school graduates across Europe.
Our research found that the two generations have very different views
of the ‘social purpose’ of business and how well companies are
delivering this.
•
While current and future leaders overwhelmingly believe
businesses should have a social purpose, only 19% of future
leaders think businesses actually do have a clear social purpose,
compared to 86% of CEOs.
•
Current and future leaders also have different views about what
the biggest barriers are to adopting a social purpose. Current
leaders focus on external factors such as government and
regulation, while future leaders believe internal factors such as
current management attitudes, lack of information and financial
considerations play a larger role.
•
Both current and future leaders agree that profitability and
shareholder value are the key indicators of business success
today. But while current leaders believe these will remain
important, future leaders believe that other factors such as
societal and environmental impacts, innovation and
development of future talent will define the successful business
of the future.
If you think about it, these differences make sense. Every generation
of business leaders is a product of their life experiences. Current
business leaders have grown up and managed businesses through a
period of drastic change where business purpose and responsibilities
have been tested to new limits. Business schools, particularly in the
US and the UK, taught today’s CEOs that maximising shareholder value
was the purpose of business. By contrast, future leaders have grown
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up with a much greater awareness of social and environmental issues.
They have experienced both recession and societal stresses that they
see worsening in the future and have a greater expectation that
business will play an important role in addressing these problems.
CONCLUSION
Why am I so excited about the Circular Economy? It has the potential
as a transformational business model to help to transform sustainable
development to enable the current generation to meet the aspirations
without constraining the ability of future generations to do so as well;
enabling 9-9.5 million people to live reasonably well within the
constraints of one planet by 2050. As Justin Keeble will emphasise
later this morning, the circular economy offers substantial benefits to
business as well as to society.
The reason why I am so excited by the circular economy as director of
Cranfield University School of Management’s Doughty Centre for
Corporate Responsibility is because I believe, like the late great Peter
Drucker, that every global problem or social issue is a business
opportunity in disguise.
Indeed my very first book back in 2001, was called “Everybody’s
Business; managing risks and opportunities in today’s global society”. The circular economy offers a business model to change the world. It
develops a number of existing innovative business models:
· base of the pyramid
· corporate social opportunity / shared-value/blended-value
· net positive impact
To be successful in the circular economy, companies need the science
and technology as well as management know-how, so, a university like
Cranfield which is strong in science and technology and management
has a real competitive advantage and can have significant positive
impact. I hope the One-Cranfield vision and strategy which our CEO and Vice
Chancellor will talk about at the end of today will give us a platform to
realise this opportunity. As you will learn during the day, there are a
number of existing research projects and teams in different parts of
the university working on circular economy, either explicitly or in
practice. Sir Peter Gregson will tell you more at the end of the day.
As Tom Friedman from the New York Times wrote in his book, “Hot,
flat and crowded”
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The task of creating the tools, systems, energy sources and
ethics that will allow the planet to grow in cleaner, more
sustainable ways, is going to be the biggest challenge of our
lifetime”
And as Peter Senge of Fifth Discipline fame wrote in The Necessary
Revolution:
“The organisations that truly lead in the profound changes
starting now to unfold around the world, who do not get
stranded in just being “less bad,” will be those who convert
sustainability challenges into compelling strategic opportunities.
They will be the ones that create the truly new products, the new
businesses, the new energy infrastructures, and the new
management practices and organisational structures.”
I hope you are looking forward to an exciting and informative day!
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