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Chasing the Dragon: Scaling Circular Economy Innovation

Chasing the Dragon: Scaling Circular Economy Innovation

The story of the industrial era is centered on business capacity to reach mass markets. Advances in efficient manufacturing fueled the American consumer revolution in the early twentieth century. This was followed by the dramatic elimination of trade barriers in the 1990s, which drove down consumer prices and facilitated an unprecedented era of global growth.

As the world begins to pivot from the so-called “Made in China” model and we experiment with greener and more “circular” innovations, the goal of many innovators and their backers remains to scale new solutions. But to what extent is this possible?

Two forces are at work that reshape how markets work in the greening economy. The first is related to technology and the second concerns trust in innovation. Both forces are evident in the African context.

Among the most significant technological revolutions taking place in manufacturing is 3D printing. 3D printing opens new possibilities for low-cost prototyping, customization, and distributed manufacturing. Thanks to the plummeting costs of 3-D printers, design and production is moving from the hands of institutions to individuals. This transformation is especially useful in stimulating local innovations.

Muyiwa Oyinlola, Associate Professor of Engineering for Sustainable Development at De Montfort University in the United Kingdom and leader of DITCh plastic network is a serial innovator who has been hard at work to make this happen in Nigeria. Because 3-D printing can use waste plastic as an input, it is an especially useful tool in the Nigerian context, where plastic is a prevalent waste stream and one that is recognized as a significant environmental problem.

Oyinlola’s approach has been to work directly with local communities to understand their needs and consider how local materials including plastic waste can be deployed to produce relevant solutions. Through this process the Circular Plastic GCRF Cluster   which Oyinlola is involved with, have designed tools to enhance the productivity of dredging, fruit gathering, agriculture and aquaculture using plastic waste and a 3-D printer. What is unique about this approach is that these innovations serve small “micro” markets. Unfortunately, for the time being there is not a viable business model that efficiently gets these innovations into the hands of potential users.

What does a successful business model which is based on recycled plastic look like and how can it be scaled if it is based on serving small communities instead of mass markets? In Nigeria, lack of trust in new technologies makes it even more challenging to answer to this question.

Oyinlola has worked extensively to develop products using local materials. Beyond 3-D printing, Oyinlola was involved in the Bottle House project; a transdisciplinary, international, research collaboration between academia, industry and end-users in rural Nigeria. Observing that empty PET bottles were an environmental problem that were available in high quantities, the team developed a prototype house using PET bottles filled with sand and water. At about £3,000.00 the costs to build the house was nearly double the cost of a mud house of the equivalent size but only 35% of that of a house made of sandcrete blocks.

On measures of eco-efficiency, flood resistance and temperature moderation, the house outperformed its peers. However, the research team found that potential users believed a house made of rubbish would be of inferior quality to a new build, regardless of construction material.  According to Oyinlola “negative perceptions about the aesthetics and quality of a house made of bottles was a bigger hurdle than reducing the cost of building.”

Bankole Oloruntoba, CEO of the Nigerian Climate Innovation Centre echoes these sentiments. As he puts it “after being told for decades that owning a car is a sign of wealth and success, we are saying you should go hop on a bus? Social norms just don’t change that quickly”.

Joseph Pistrui, entrepreneurial management faculty member and the former dean of executive education at IE Business School in Madrid says that as economic systems and business models become more local, the key to their success will be for broader local participation in green businesses, pointing out “it is more likely for someone to be a proponent of a bottle house or any other comparable technology if they are a supplier or a manufacturer.”  Paradoxically, technological innovation facilitates these types of local business opportunities.

While the task may appear Sisyphean it is certainly not impossible to develop business models can be both scaled and tailored to very specific markets. One needs only to look to the tech giants of our time such as Amazon and Google for inspiration. Indeed, because they optimize resource use and facilitate markets for re-use and sharing, digital platforms are a key feature of “circular” economic organization. However, what Oyinlola’s work demonstrates is that as capabilities to cater to local markets continue to improve, scale-ability need not be the primary objective of all business innovation. For green and circular markets to thrive, it is equally important to invest in small-scale businesses who are closest to customers and can potentially help boost demand for new innovations.