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Towards a collaborative world, where waste becomes a resource

Jul 14, 2015 11:54:00 AM. By: High Tech Campus
For around the last 150 years we’ve lived in the industrial age of mass production. We dug raw materials out of the earth, turned them into manufactured products made on production lines in factories and sold them to eager customers.

They used them until they decided they ceased to function and then disposed of them. For the most part, it all ends up in landfill. As some of those raw materials get scarce, so several large multinational companies are rising to the challenge set by a British yachts-women.

Ellen MacArthur spent 71 days circumventing the world alone, gaining a deep understanding of what it’s like to live with finite resources. She started a foundation to discuss and promote a different way of thinking – the so called circle economy.

The approach requires companies to extend the life of existing products and design new ones that last much longer. It means taking products back for reconditioning and reuse. They’ve recently launched an extensive website called Circulate which is a great place for insights. Philips has been a global partner with the MacArthur foundation from the start, taking an active part in changing the ways it provides value to customers and conducts its business.

Open Source Meets Circle Economy on Campus

Saskia Verbunt is Senior Consultant Sustainability at Philips Innovation Services on the High Tech Campus Eindhoven. She was one of the organizers of a recent open discussion event on campus that looked at cross-over innovations that can help to accelerate these goals.

“Throughout society we’re seeing more and more developments in open source software, hardware, data and design”. Saskia explains. “Look at all kinds of community and commercial initiatives that are springing up around technologies like 3D printing or new textile materials and wearables.“

“At the same time there’s a growing chorus of people and companies advocating that our economy needs to transform from a linear to a circular economy. So we organized a brainstorming event on the High Tech Campus during the recent Open Source Circular Economy Days. We’re in the process of understanding how these open source developments can be applied to accelerate the transition towards a circular economy. In fact, it is surprising what initiatives have already being taken. Collaboration is an important enabler for the circular economy, so we decided from the outset to open our discussions to external participants. In fact, the collective intelligence provided by all participants was key to a really useful discussion.” 

The kickoff speaker was Markus Laubscher, who is circular economy program manager at Philips. He set the scene for the workshop discussions.
“Philips will be splitting up in two companies, one part exploring new areas of connected lighting. It’s all about the innovation to improve life that goes well beyond illumination. The other Philips will focus on Health-Tech, where we integrate the home activities and professional health care into a single health care continuum. It spans from helping people to enjoy healthy lifestyles to home recovery and care.”

“Both companies have digital technology and connectivity in common.  To explain our interest in Open Source and the Circle Economy we need understand what’s changing and bust a few myths.”

Understanding the journey from a Linear to a Circular Economy

“When you create a product by taking virgin materials and mineral resources from the ground, you start creating value during its life cycle. The user will pay for the value that you add when you make a product and when they use it in some way. But once they dispose of it, even if it is recycled, then almost all of the value is destroyed. The circular economy approach is simple: how can we keep and preserve this created values for much longer time?”

“With the circular economy we want to preserve the values as much as possible, grow our businesses, be responsible citizens and return the recycled materials to the system. If you look at the map of our closed business loops, you can see that “recycling” is actually the last loop of our circular economy, since brings in the lowest value preservation. This is what you want to do in the end not at the beginning.”

“In the business world, for instance, we’ve already launched “Lighting as a service”. Philips offers access to lighting equipment rather than selling lighting fixtures and bulbs. The customer is the user, not the owner of the equipment, so there is no capital expenditure. Customers pay a regular fee for the complete package including maintenance within an agreed period. At the start of the contract, an agreement is made as to what will happen when the contract ends. If the customer decides not to renew, then we take back the products in order to extract additional value out of those assets.”

As we move forward, we see the following grand challenges with Circular Business Models:
  • Scalability: We need to move from pilots to business as usual: In many of our businesses, we are still developing pilot schemes which need to be scaled up. We need to accelerate this process so we can benefit from the economies of scale.

  • Design: Products need redesigning to support circular business models. At the moment, many designs are not focused on a second or third life. It may require more investment at the beginning of design, but that investment comes back when your product goes into its second or third life.

  • Market perception: In many developed societies, “pre-owned” is seen as a second, inferior choice: If you want to scale up the circular economy, a change of mindset is necessary. The customer demand should therefore be based on value rather than if the product is new or not.

Organizational ownership: The design departments at Philips are already convinced of the benefits. But now we need to propagate these across other departments in Philips and its partners.

The power of Collective Invention.

Independent open-source researcher Dr Peter Troxler and Laurens Schuurkamp, a Philips designer with wide connections in the Open Source movement discussed what appears to be a paradox. Eindhoven is the world’s most inventive city, judging by the number of patents filed. But isn’t there a contradiction here with the aims of the open-source community?

Troxler pointed out that people need to find the right balance between Intellectual Property Protection and Open Source transparency.

“Open Source is often perceived as new. In fact the approach has been around since the 19th century: Knowledge sharing among innovators in the past was commonplace. It was never a marginal activity. Open Source does not mean giving up intellectual properties and rights! ” 

“Key technologies at the heart of industrialization, such as high pressure steam engines, iron and steel production techniques, steamboats, textile machinery, even airplanes, were developed through processes of collective invention at several times and places.”

“Open Source helps people develop business loops that go beyond making money, touching on various aspects of societal, literacy and community values. It will raise questions like: can open-source machine data lead to a significant increase in healthcare equipment utilization? That could drive down costs, reduce waste and improve patient care.” 

The conversation will continue as this discussion forum (http://www.oscedays.org/ ) takes shape. For questions, suggestions, or to get involved in the discussion, send an e-mail to saskia.verbunt@philips.com.    

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