Feature

We must let nature inspire us

Based on his new book, The Blue Economy: 100 innovations to generate 100 million jobs in 10 years, GUNTER PAULI presents an alternative business model that is environmentally-friendly and sustainable.

Butterfly

GUNTER PAULI is a born entrepreneur whose scope of initiatives spans business, culture, science, and education. In 1994 - with the support of the Japanese government and the United Nations University - he launched an initiative to design an economic framework and business model that converts all waste, including emissions, into a value added cascade, modelled on ecosystems. In 2004, he launched a research project identifying the innovations that will shift business towards higher levels of competitiveness and sustainability, while generating millions of jobs through the creation of a platform for entrepreneurship. In early 2010, he will personally direct a two-year initiative that each week for one hundred weeks will present another business model to inspire entrepreneurs to translate these opportunities into worldwide business initiatives. Pauli is the author of seventeen books published in twenty-one languages, and of thirtysix fables that bring science and entrepreneurship to children at an early age.

 

Just months after the 2008 financial meltdown, the International Labour Organization (ILO) reported the destruction of fifty million Third World jobs. This was the beginning of a social shock that unsettled the world. Downsizing and outsourcing had been the driving force for every major industrial group for decades. Developing economies were deeply affected by the massive layoffs in the formal sector, and the loss of income in the informal sector. For the past few decades, the world economy has been based on money that simply did not exist. “Wealth” was generated by making “assets” appear, as though by magic, through the leveraging of non-existent credit and the creation of obscure and meaningless financial instruments. Money was multiplied over and over in special accounts without risk, or initiative, or the production of real assets. Innovation was limited to investments that could produce multiple returns in a few years. This form of capitalism was entirely disconnected from peoples’ real needs – food, water, health and energy. Entrepreneurs became a vanishing breed.

Fortunately, times have changed. As the second decade of the 21st century sets the stage for a new economy, the core question becomes: “What is the business model that we really need?” Some two billion people barely survive on less than two dollars per day, lacking basic needs such as water, food and health care; and 25% of the world’s youth are unemployed. Yet, one billion of us are over-nourished, and swim in 400 million tons of electronic waste that often contains higher concentrations of metal than the ores extracted from the Earth’s crust. In the past, the model driving our economies depended on perpetual growth, requiring ever more resources and investments. This model has inherent flaws: it leads to societies that are highly unjust, economies that are highly skewed and exploitative, and ecosystems that are destroyed. The new economy must be more effective and competitive. It must become sustainable, using less investment by introducing innovations that generate more revenue, while building social capital. It should not just generate shareholder value and excessive executive pay.

The prevailing economic model pre-supposed that scarcity was the major limitation. Therefore, this model searched for ever higher agricultural yields and industrial outputs, demanding that the Earth and labour produce more. It is time to do more with what the Earth produces, rather than requiring the Earth to produce more. It is time to end the insatiable quest for ever lower marginal costs that drives business towards economies of scale through mega-mergers and acquisitions. It is time to adopt broad-based innovation strategies that generate multiple revenues and higher cash flows, while creating more jobs. This business model relies on a new generation of entrepreneurs who, rather than pursuing a business strategy based on core competence, use what is available to meet the basic needs of a multi-faceted and diverse society.

The shift from core business and economies of scale, to multiple businesses with economies of scope, certainly sounds unrealistic to an ear trained by any leading business school. However, based on four years of research, covering over 2,000 innovations, and a study of creative business models implemented around the world, it is clear that the new approach is not only viable, but has already been emerging over a quarter of a century. The current crisis is highlighting the need for an economic development model based on bold innovations that generates desperately needed jobs, while sustainably addressing the immediate needs of citizens.

Detailed research, analysis, and dialogue with scientists, business strategists, equity providers and policy-makers, reveals a portfolio of 100 innovations that have the potential to generate as many as 100 million jobs worldwide over the next decade. Some of these innovations, all proven and benchmarked at a remarkable scale, simply cascade nutrients and energy in the same way that ecosystems do. The inspirational Las Gaviotas project in Colombia – under the leadership of Paolo Lugari – converted a desolate savannah, created by 400 years of thoughtless cattle-farming, into a lush rainforest that is not only self-sufficient in water, food and fuel, but also builds valuable social capital. In New Mexico, USA, a small area of woodland – a well-known fire hazard – has been converted into a job-creating and food-generating programme that builds on the traditions and culture of Native Americans. It stands in stark contrast to the dramatic images of wildfires that periodically devastate California. The production of silk that substitutes for the high-performance titanium used in health care and certain consumer products, while regenerating top-soil and reducing the burden of mining on the Earth, is just another example in a portfolio of technologies that spans the globe.

Pine tree resin processing in Las Gaviotas, Colombia – Resin harvested from Honduran pine trees grown on land considered unproductive for centuries is converted into colofonia, a raw material for the paint and paper industry.

Las Gaviotas

 

Other innovations show how to substitute “something with nothing”. Our modern society has become so dependent on particular solutions that it is difficult to imagine life without certain products. Unfortunately, over time, many of these solutions rebound, rendering life totally unsustainable, squandering limited resources. Real, lasting solutions require a fundamental shift in our consciousness, and therefore require breakthrough innovations. Just two such innovations highlighted in my forthcoming book, The Blue Economy concern batteries and antibiotics:

Consumers do not realize that the cost of electricity stored by a hearing aid or a pacemaker battery may easily surpass €100 per kilowatt hour or that the production of this battery requires energy-intensive mining and smelting. The race for an effective ‘green battery’ is underway, but the time has come to simply eliminate the battery, and embrace out-of-the-box solutions: The Fraunhofer Institute in Germany has already developed a cell phone powered by the differential between ambient and body temperature, and the pressure generated by our voice.

Antibiotics have certainly made a great contribution to health care, yet alarming bacterial and viral resistance is forcing science to think beyond antibiotics, venturing towards solutions provided by red algae or the vortex. Certain algae jam the communications among bacteria so they cannot form a biofilm, whereas the vortex – the naturally-occurring swirling movement that happens when water is subjected to gravity – increases pressure at the core, eliminating oxygen from water, thereby stopping bacterial proliferation. Since these solutions do not kill, there is neither speedy mutation nor undesired side-effects.

The 100 innovations identified in The Blue Economy have been benchmarked and realized in different parts of the world. After years of research, these initiatives have emerged as viable businesses, bringing profound innovations to the market, responding to basic needs, creating jobs, and also improving the competitiveness of agriculture and industry. The following snapshots of businesses based on these principles show how this is possible:

The slaughterhouse healthcare project
Dirty slaughterhouse offal, along with blood, is currently thrown away. Under hygienic conditions, which improve overall working conditions, this offal can be used to produce maggots. This is happening at the Songhai Centre in Benin, under the leadership of Father Nzamujo, where maggots serve as a crucial source of protein feed for the Centre’s poultry and fish production activities. In addition, maggots are the source of a valuable enzyme that promotes wound-healing in diabetic patients. Pioneered during the Napoleonic era, this technique is still in practice in over 800 hospitals worldwide. There is strong demand for the enzymes, and existing production costs are very high. This has created a new opportunity for the Songhai Centre based on the technologies developed by Advanced Gel in the United Kingdom.

The non-destructive extraction of enzymes by simply washing the harvested maggots in salt water means that, in addition to generating revenue from fish and poultry, there is a third source of income from the sale of enzymes for local health care or for export. This makes offal-processing competitive, reducing feed costs while permitting additional job creation and cash-flow generation. Each slaughterhouse in the Third World could generate 50-100 jobs. If 3,000 slaughterhouses in Africa were involved, there would be an additional 150,000 to 300,000 jobs created, using locally-available resources, and securing a high value-added that justifies sustainable financing for the additional employment. Each of the components produces a cash-flow that services the capital invested. This demonstrates that multiple revenues can be generated from something like offal, which previously had no value – and indeed cost considerable money to dispose of. Precedents such as the European Union’s decision to destroy offal in the wake of “mad cow” disease show that it should also be possible to mandate the re-use of offal.

The coal-based electricity to food security project
The carbon dioxide-rich flue gas from coal-fired power stations can be concentrated in warm water that is kept in the retention basins of cooling towers, and can be used to produce spirulina algae. This blue-green algae has a potential role in fighting malnutrition since it contains all the micro-nutrients necessary for infants and children. This has been already been carried out in Rio Grande do Sul (Brazil), thanks to the work of Professor Jorge Alberto Vieira Costa. The original idea emerged under the auspices of Fome Zero (zero hunger), a programme initiated by the Brazilian Government when President Luiz Ignácio Lula da Silva started his mandate. While Brazil has only five coal-fired plants, the success of the pilot project in the south of the country has motivated the government, business, and academia to pursue this approach.

Given the high volume of coal consumed in countries like China, the USA, and South Africa, the production of spirulina as a cheap source of quality nutrition will greatly and quickly exceed demand, thus stamping out malnutrition. The algae’s lipids are also an ideal source of biofuels. The cost of infrastructure having already been funded by the power generator, only a comparatively small additional investment is needed to increase output to an industrial scale. As many as 100 jobs can be generated at each power plant, which means that more than 100,000 jobs could be created in the countries mentioned above. Fuel from algae becomes competitive with oil at approximately US$100 per barrel, so other multipliers kick-in over the longer term. Further income can be derived from carbon credits generated in the process of converting carbon dioxide into value-added products. Brazil has shown that by purchasing algae for food security programmes, government agencies can help launch such innovative projects.

Caterpillar

“If there was a return to the late 19th and early 20th century level of production of around one million tons a year of silk, an amazing 12.5 million jobs could be created”

 

Agro-waste to rural development project
The single-minded quest for higher crop yields per acre often ignores the value of the biomass that is discarded after a harvest. The search for new technologies concentrates on ways to increase the value of the crop alone, such as genetic manipulation. This is a faulty approach. Coffee and tea plantations, fruit orchards, vineyards, and maize and wheat fields generate huge amounts of “waste,” which – in fact – should never be wasted. The amount of waste often overwhelms the system, making it impossible to plough the biomass back into the soil. Burning is frequently the only solution, contributing to both pollution and climate change. The alternative is a “pulp to protein” programme that converts biomass into value-added products, following the ecosystem logic of cascading nutrients and energy where nothing is wasted. Everything remaining from one part of the cycle turns into food for another.

In Colombia, the application of the simple science identifying plant lignocellulose as an ideal substrate for mushrooms has already created over 10,000 jobs. Coffee bean husks are converted into a substrate for farming mushrooms, and the spent substrate that is left after harvesting the mushrooms is used as animal feed. In the Colombian department of El Huila, over the past twelve months, more than 100 companies producing food on what previously was considered waste have been established. Most of them are run by women.

This nutrient cascade was studied in detail by Cenicafé, the Colombian Coffee Farmers’ Federation research centre, under the leadership of Carmenza Jaramillo. She demonstrated how each component of the waste could be best exploited to grow different types of mushrooms. In terms of protein content, these mushrooms rival meat on a dry weight basis. Professor Jaramillo monitored the implementation of the programme on the coffee farms, as well as in the peri-urban region where coffee is industrially processed and where waste had contaminated local rivers.

The successful “pulp to protein” programme has been repeated in Zimbabwe’s coffee sector. The focus there is on providing food security for women at risk, especially orphan girls in the rural areas of Mutare, Karoi, and Chipinge whose parents have died from AIDS. When these young women, who at an early age become heads of their families, have a source of income and food security, their increased confidence enables them to make better life choices, often resulting in less exposure to HIV/AIDS and other diseases. The Zimbabwe programme is complemented by an intensive international marketing campaign highlighting the way that waste from coffee helps provide food security for formerly marginalized people. As coffee consumers have become aware how the coffee waste is being put to use, a solid new platform for secure sales of a premium priced coffee in the USA, Europe, and Japan has developed.

As the programme in Colombia has demonstrated that on average two jobs are generated per farm, and knowing that there are an estimated 25 million coffee farms around the world, the potential employment for this cycling of nutrients and energy could add up to some 50 million rural jobs globally, while adding another 25 million tons of food to the world’s table.

Regeneration of topsoil to health care
Over past Millennia, China developed the technique of regenerating topsoil by planting mulberry trees. The original goal of the Chinese leadership was to secure fertile farmland, and the opportunity to produce silk was only discovered centuries later. Today we have all but forgotten the capacity of mulberry trees to thrive on poor soil. Since one ton of silk generates ten tons of fertilizer, planting mulberry trees on dry and unproductive land not only regenerates farm-land, but just planting the trees would also generate two jobs per hectare. Silk is no longer competitive as a raw material for textiles, but on the other hand, it offers solutions for sophisticated applications like nerve repair, bone grafts, and orthopaedic surgery. Silk competes in price and performance with titanium, which is mined and requires high temperatures for smelting and conditioning. A reduction in the demand for titanium in medical, industrial, and consumer products will reduce stress on the environment, while the increased planting of mulberry trees will act as a massive carbon sink, not least because silk itself is over one third carbon.

The development of a broad portfolio of silk applications from health care to razors (currently made from titanium and stainless steel) would dramatically increase the demand for silk after decades of losses. The logic is not limited to performance. One ton of processed silk is only half the price of one ton of processed titanium. The additional farming of 100,000 tons of silk could generate 1.25 million rural jobs, and silk manufacturing could support an extra 25,000 industrial jobs. If there was a return to the late 19th/early 20th century level of production of around one million tons a year, an amazing 12.5 million jobs could be created. The project requires long-term funding for the mulberry planting, but is commercially viable, based on technologies benchmarked by Oxford University in the UK through a programme directed by Professor Fritz Vollrath.

Termite-inspired airconditioning – The Eastgate shopping centre and office block in Harare, Zimbabwe, also known as ‘The Anthill’, is modelled on the self-cooling mounds built by termites. The termites’ structures are able to maintain the temperature inside the nest to within one degree of 31°C, day and night. This is accomplished even when the external temperature varies between 3°C and 42°C. The Eastgate building uses only 10% of the energy of a conventional building of the same size.

Eastgate, Harare

 

Low cost social housing based on African technologies
From Latin America to Asia, innovative housing schemes have converted the need for shelter into job generation programmes that provide income, build on local biodiversity, reduce construction cost, and successfully introduce innovations that lead to healthier living conditions. Sustainable housing is more than saving energy and using recyclable materials. Sustainable housing creates a healthy environment in homes, offices, and factories. An estimated 50 technologies, several inspired by know-how available in Africa, have found their way to the market. These remain largely unnoticed. Each of these technologies deserves attention. In the light of the unmet demand for shelter, the integration of a portfolio of low-cost housing innovations demands our attention.

Nature-inspired technologies are already being applied in buildings around the world. The Eastgate shopping and office centre in Harare, Zimbabwe; the Gaviotas hospital in Colombia; and the Lagerberg school located outside Sundsvall, Sweden; all apply termite-inspired air conditioning systems. The results of Professor Andrew Parker’s innovative studies of the Namibian beetle’s water-from-air collection methodology are already used in the City of London, producing water out of the air released by air-conditioning equipment. A Living Filter system, using tropical plants to clean the air, is in use inside the Ford Motor Company garage in Umeå in northern Sweden, much in the same way that the Amazon forest extracts dust from the air. Benchmarked by the Swedish architect, Anders Nyquist, quality construction material is produced from un-recyclable glass in Belgium, the Czech Republic, and the USA. These are but a few of the technologies that could revolutionize construction. Each of them could generate tens of thousands of jobs, with an overall potential exceeding 500,000 jobs within the building industry’s supply chain.

A new business model has emerged:
(1) It operates with what is locally available,
(2) It generates multiple revenues, and
(3) It responds to basic needs while generating jobs through the adoption of innovations that render industry more competitive.

The Blue Economy merges the desire to evolve towards sustainability, with a broad platform for creative entrepreneurship, by bringing breakthrough innovations to the market. In doing so, it resembles the evolutionary path of nature. Indeed, just as ecosystems evolved to ever more efficient nutrient and energy cycles, bringing ever more diversity, leading to resilience, flexibility and performance, the economy will increasingly rely on less energy and provide more diversity. Materials will be recycled without landfills and incinerators, and more players will be permitted to respond to societies’ needs. Innovation, sustainability, and entrepreneurship will be linked, forming a pathway out of the crisis.

With over one billion young people entering the labour market in the next decade, this is exactly the framework we need.

 

December 6th, 2009 at 02:37 comment 3 Comments »

Name *
Display Name? * Yes No (name displayed as Anonymous)
E-mail Address: *
Affiliation * Affiliation and e-mail address will not be displayed publicly.
Comments *
I have read and agree with the Terms of Use of Making It Magazine *

* Required 

comment 3 Comments »

comment
Sender:         Tim Hemmings
Comments: What a great website very informative and easy to view/access excellent

comment
Sender:         Georges Posada
Comments: I have followed the work of Prof. Pauli for decades and this is the best summary of the wide portfolio of opportunities this new industrial model represents.

comment
Sender:         Erin Sanborn
Comments: To order the book, The Blue Economy; 10 Years, 100 Innovations, 100 Million Jobs, please send an email to blueeconomy@paradigm-pubs.com. You will receive notification and a promotional code when the book is available in early 2010 and a 20% discount off the cover price if your email is received before 21 December 2009. Thank you