frugal value: designing business for a crowded planet
DESCRIPTION
In May 2014, Carina Millstone, visiting research fellow at the Global Development and Environment Institute at Tufts University discussed "What would business look like in a steady-state economy? in a Critical Theme seminar hosted by IIED. In the seminar, Millstone covered the nature and workings of individual private sector organisations in the steady-state economy, with a particular focus on purpose, products and business models. Her presentation consisted of early findings of research she is currently conducting on sustainable business practices. More details: http://www.iied.org/economics.TRANSCRIPT
CARINA MILLSTONE
DESIGNING BUSINESS FOR A CROWDED PLANET
21.05.14 IIED
The challenge of the crowded planet
The Planet The Crowd The Anthropocene
• Global steady-stateeconomy “sized”within planetary limits
• Resource contraction and convergence
• De-growth and good growth
• Resilience
What does responsible business look like on the
crowded planet?
Business models that require and drive frugal products and services
about my project
1. The purpose of business
2. The nature of products and services
3. Business models
4. Scale, place and growth
5. Ownership, profit and financing
6. Operations
7. The limits to business and alternatives
8. Transitions
“If I had asked people what they wanted, they would have said
faster horses.” Henry Ford
1. the purpose of business
Could business innovate to help meet the challenge of the
crowded planet?
On the crowded planet, business innovates for frugality.
Efficiency
Sufficiency
Frugality
Requires innovation in• Technology• Organizations/
Institutions• Behaviors/ Lifestyles• Relations/ Society
Offering efficient and sufficient products and services to customers
Finding ways for making such products and services commercially viable by developing…
Business models that require and drive frugal products and services
Frugal innovation creates a new kind of value.
On the crowded planet, business offers efficient and
sufficient products
2. the nature of products and services
Products can be designed for frugality...
90%
10%
…through the incorporation of attributes for efficiency and sufficiency.
PRODUCTNaturally
- inspiredHumane
Job-efficient
Operation
Skill-supporti
ng
CulturalFunction
Non- proxy
Frugally-normativ
e
Lifelong
InfluenceDwindling
Streamlining Path-
Independent
3. business models for frugality
On the crowded planet, business models require and
drive frugal products and services
creation of a high-volume of products
#1: the product creator and steward
creation and stewarding of frugal products
#2: the product retailer and sustainer
retail ofhigh-volumeof products
retail and aftercare of
frugal products
#3: the product renter
rental of selected products
broad rental offrugal products
#4: the service provider
sales of products and provision of
services
broad provision of frugal
services & product services
#5: the product and service matchmaker
businesses“doing business”
households exchanging
amongst themselves
models and product lifecycle
product flows today
models and product flows
#1 product creator & steward
HHH HHH HHH HH HHH HH HH H H H
#2 product retailer &sustainer
HH HHH H
#3 product renter HHH
HHHHH HHH
HHH
#4 service provider
HHH HHH HH HHH HHHHHH
#5 product & service matchmaker
HH HHH HH HHH
BUSINESS MODEL
models and product attributes
job-efficient
naturally-inspired
humane
skill-supporting
dwindling
streamlining
path-independent
non-proxy
lifelongfrugally-norm
ative
ATTRIBUTE
#5 product & service
matchmaker
#4 service provider
#3 product renter
#2 product retailer
& sustainer
#1 product creator
& steward
the toy
• create frugal toys• toy repair and remanufacturing
• only stock frugal toys• second-hand toys• buy-back programs• repairs
• toy rental
• toy subscription• entertainment services• play centers
• peer-to-peer toy market• barter• gifts
• leasing and servicing• taxi services
#5 product & service
matchmaker#4 service provider
#3 product renter
#2 product retailer
& sustainer
#1 product creator
& steward
the car
• fuel-efficient cars• refurbishment and
upgrades
• secondary market• buy-back programs• repair services
• short and long term rental market
• peer-to-peer rental• peer-to-peer rides
Products and business models
for frugality are insufficient.Organizational design is an integral part of frugal value.
4. some conclusions..
1. How do we consider scale?
2. What is the best ownership structure for different sectors?
3. When is providing products and services on a commercial basis detrimental to frugality?
some questions…..
The crowded planet requires frugal innovation by the private sector
On the crowded planet, business creates value by offering products that promote efficiency and sufficiency of resource use
…and developing models that require and drive such products
Appropriate form, ownership structure and scale are integral to frugal value.
Please get in touch at [email protected]