business

The (missing) human dimension of the circular economy

Posted on September 29, 2017 Leave a Comment

Last Sunday, I attended a “working dinner” on the circular economy. It was held at the Residence of the Holy See Representative to the UN, Chaired by the Vatican Minister of Foreign Affairs, and sponsored by ING. The residence of the Vatican in NYC is extra-ordinary. It was built and donated by the first 20^thcentury mayor of the city: Hugh J Grant. It is the only NYC townhouse with a built-in chapel and a bullet proofed bedroom where 3 popes have slept.

I was intrigued by the interest of the Vatican in the circular economy. That’s because I had missed the reference in Pope Francis’ Laudato Si: “We have not yet managed to adopt a circular model of production capable of preserving resources for present and future generations, while limiting as much as possible the use of non-renewable resources, moderating their consumption, maximizing their efficient use, reusing and recycling them. A serious consideration of this issue would be one way of counteracting the throwaway culture which affects the entire planet, but it must be said that only limited progress has been made in this regard.” [Emphasis added]

The circular economy proposes a growth model decoupled from natural resources. This means a shift from a linear model that “takes, makes and disposes” to a circular model that “reduces, reuses, and recycles”. The concept was born in environmental economists circles. It is connected to other, more familiar, concepts such as the sharing economy, the green economy and sustainable development. It is presented as a response to co-existing trends that contribute to environmental degradation: the increasing resources scarcity and commodity price volatility; and the growth of population and middle-class consumers.

Accenture estimates that the circular economy could generate 4.5 trillion by 2030. The first World Circular Economy Forum was held this year. And more and more businesses, mostly European so far, are embracing the concept. This means big changes to their strategies: Unilever commits to 100% recyclable packaging by 2025, Philipps moves from selling light bulbs to selling lighting as a service, Michelin leasesand retreads tires, etc.

A key question at the Vatican-hosted dinner was about the impact of the circular economy on the poor. This matters because so far the conversation has mostly happened in rich countries and focused on the environmental dimension of the circular economy. Not much has been written on its human dimension. My main message during the dinner was that circular economy advocates should not consider human wellbeing as an ex-post issue only. Rather human wellbeing should be a core element of the model where human capital wastes are considered alongside natural resource wastes. Under this broader message, here are some ideas I put on the table:

The circular economy

Should seek to optimize all resources, including human resources. That would require pricing negative human externalities (eg inequalities) so that goods and services bear the full cost of their production and consumption;
Could make certain goods and services more accessible to the poor (sharing is cheaper than owning);
Could offer jobs opportunities to young “green” entrepreneurs provided they have the skills, finances, and technology.
Would require life-long learning systems.
Could help formalize informal economic activities, in particular when digital platforms are used to share goods and services.

In short, the circular economy concept is transforming big industries into service providers, being promoted by influential political and financial actors, but missing a fully-fledged human dimension that I, for one, would like to help shape.

15 September

Posted on September 15, 2017 Leave a Comment

The just-released Bill and Melinda Gates’ “The stories behind the data 2017” tracks 18 SDG data points on poverty, child and maternal mortality, stunting, vaccines, universal health coverage, sanitation and more. It is a quick and easy read with clear graphs and good stories about what works, accompanied by a cool video. It will be published every year until 2030. Complement or competition to the UN SDG monitoring report? The Gates report is a teaser for the Foundation’s Goalkeepers GA event, one of the three off-site foundation-led events I will be tracking next week to see who wins the race to fill the gap left by the Clinton Foundation. The other two are the WEF’s Sustainable Development Impact Summit andBloomberg’s Global Business Forum. What is your bet?

This week, Apple released its Iphone X. It uses Face ID, a facial recognition option to unlock the phone, make payments, and use third party apps. It is advertised as easy, fun and super secure. But reviews andonline conversations also point to the possible creepy side, eg law enforcement abuse. Last week’sEconomist had four articles on facial recognition, its growing market, and possible uses and abuses. Short and good reads on this topic that some of you said could have featured in our last Horizons. Indeed, facial biometrics has applications and implications for children and young people. Our innovation team explores its potential for detecting malnutrition. This article shows how a software combining AI and facial analysis could “improve the performance” of online courses by picking up when students daydream and quizzing them on what was taught then.

My graph this week is from Brady and al’s “Emotion shapes the diffusion of moralized content in social networks”. It analyzes 560,000 tweets on 3 polarizing topics (in the US) – gun control, climate change and same-sex marriage, to understand how social networks transmit emotions and shape morality. The findings: emotional tweets are contagious. Each moral-emotional word included in a tweet increases its diffusion by 20%. But this effect is much greater within like-minded groups than between. So beware, getting emotional on twitter feeds the echo-chamber.

My quote this week is from Mars CEO Grant Reid launching his $1 billion Sustainability Plan: “Data and connectivity are helping us get smarter about our impact every year. Today, climate science is clear and we understand the environmental and social challenges in our supply chain better than ever before. With this knowledge, it is clear that the scale of intervention needs to be much bolder – now is the time for business to reassess its role and responsibility in the face of the evidence.”

31 March 2017

Posted on March 31, 2017 Leave a Comment

I have not yet written about fiction books here. But here is an interesting trend: sales of dystopian novels are exploding. Orwell’s “1984” reached a 9,500 percent increase in sales in one week end of January. Rather than re-reading the classics, I started exploring those written for young people and finished M.T. Anderson’s “Feed”. It tells the story of two teenagers in a futuristic world ravaged by environmental degradation and driven by consumerism where news, games, advertisement, and chats feed people’s brains non-stop through electronic implants. As her parents decided to fight the feed, one of the main characters did not get her implant in the early days of her brain development and we observe the increasingly damaging consequences of this choice. The book, written 15 years ago before the smartphones and algorithm mania, feels surprisingly close to our “now” with its self-driving cars, occasional trips to the moon, hacking threats and over polluted air and water. It is a thought provoking read.

The Harvard Business Review ran a series on businesses and inequality this week. Interesting articles and powerful graphs, with two highlights for me. One, Nicholas Bloom’s “Corporations in the age of inequalities” calls for a shift of policymakers’ attention from gaps between rich and poor people, to gaps between high-paying and low-paying firms. He uses a growing body of evidence to show that wages gaps between companies is a huge driver of income inequality. And he argues that three trends widen this gap: “the rise of outsourcing, the adoption of IT, and the cumulative effects of winner-take-most competition”. Two, Melissa Kearney’s “Income inequality may harm upward mobility” illustrates how boys who grow up in poor homes are more likely to drop out of school if they live in places with high income inequalities than poor boys living in more equal ones. Her work shows that highly unequal environments lock young people, and especially boys, into “economic despair”.

My illustration this week is from Simon Maxwell’s “A new case should be made for aid. It rests on three legs“: 1. understand the problem; 2. match instruments to need; and 3. tell a story that convinces the public. Agreed. He then sorts out aid instruments according to public support and demonstrated effectiveness.

My quote this week is from Otherlab’s Mikell Taylor in “Cardboard gliders could revolutionize aid delivery in disaster zones“: “It’s a cross between a paper airplane and a pizza box. The plane lands right where it needs to be. You don’t want to have to account for a bunch of assumed [cargo drops] loss because the wind blew your parachutes into a lake.”

17 March 2017

Posted on March 17, 2017 Leave a Comment

Sebastian Strangio’s “Welcome to the post-human rights world” shows how the global rise of populism takes a toll on the human rights movement. He also points to areas of dynamism in the civic space where NGOs are rethinking their strategies and narratives. This led me to a lecture by Philip Alston who paints a bleak picture: “These are extraordinarily dangerous times, unprecedentedly so, at least in my life time.” He asks the human rights community to be innovative and offers 4 strategies to international NGOs: (i) create more synergies between international and local human rights movements, (ii) embrace economic and social rights (in addition to civil and political rights), (iii) use persuasion techniques that go beyond stating principles, and (iv) engage with new actors such as large corporations. Alston was in my “purist human rights guru” mental box so this made me pay attention. It also led me to another human rights guru, John Ruggie, who in a recent speech, asked businesses to step up their game and go beyond do-no-harm and “shared value creation”. He argued that the single largest contribution businesses could make is to drive respect for human rights throughout their global value chains as this could impact over 2 billion people. I felt that these were important readings at a time when the UN leadership reflects on the future of the normative agenda while the World Economic Forum ponders on the future of human rights.

Meyers et al’s “The nexus of microwork and impact sourcing: implications for youth employment” reviews 90 documents and interviews 40 stakeholders to give the latest picture of the microwork landscape. Microwork refers to outsourced online micro-tasks such as data entry or image tagging and is a market projected to grow to $2.5 billion and to provide work for 2.9 million people by 2020. The hype around the microwork potential for development peaked a few years ago when many warned of a possible race to the bottom with very low pay rates and no benefits — the creation of digital sweatshops. This paper looks at the combination of microwork and impact sourcing, a business model where companies work with intermediaries who deliberately employ disadvantaged or vulnerable populations. The paper also gives interesting illustrations of impact sourcing intermediaries training their workers, introducing them to the formal economy and serving as bridges towards better employment opportunities. But this remains a space with little regulation and no social safeguards. Connecting this conversation to Ruggie’s call for action, one can see how the promotion of human rights through these digital outsourcing platforms could have a big impact on young people and their employment prospects.

My graph this week is from Ben Parker’s “US funding for the UN in chart” illustrating the break-down per agency of the $10 billion annual US contribution to the UN. To be read in light of the announced (but not yet specified) cuts to the UN system.

In line with the overall theme this week, here is a quote from Kara Swisher in her Ezra Klein interview [47’35”]: “Whatever you think of Silicon Valley, at least they make stuff, stuff that changes lives. IMB was one of the first to do integration and gave their employees rights, so did Apple. I put less of my faith in policy makers than I do in businesses.”