Marie Curie NetworkCircular European Economy Innovative Training

Centre for

Sustainability

Gertjan de Werk – g.dewerk@tudelft.nl Prof. Arnold TukkerAssociate Director LDE Centre for Sustainability Scientific Director

The circular economy – what is it?

• High quality of life, low resource use

• Strategies

Prolonging product life

Repair

Re-use

Remanufacturing

Recycling

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The circular economy – what is it?

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Centre for Sustainability

Enabling the transition to a circular economy by research based contributions

to demand-driven innovation. Key drivers:

• Resource efficiency especially for critical raw materials

• Proven impact over the whole product chain and life cycle

• Beyond technology. Social, cultural, financial (including ‘the wide society’)

• System innovation by new cooperation and business models

Governance, policy, regulation & transitions

Circular product design & circularbusiness models

Clean technology forresource efficiency

Industrial ecology & economics

Research focus & application areas

Focus: Research & Development Application: Knowledge & Innovation

Raw Materials

Urban Systems

Production Consumption

Chains

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• A collaboration of the Ellen MacArthur Foundation and the LDE

Centre for Sustainability, co-ordinated by TU Delft

• https://www.youtube.com/watch?v=74jLSzBT440

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Feed-in and catalyse the Innovation pipelineCfS is the driver to create dynamics and large amounts of ‘activities’

MinorsProjects

GraduationPhd

Postdoc

ShowcasesSummerschoolsProf. Education

Thought leadership

Living labs/Incubators

Roadmaps

K&I labs

Marie Curie International Training Network

ITN Summarized

• Train new generation of creative, innovative early stage

researchers able to face current and future challenges and to

convert knowledge and ideas into products and services for

economic and social benefit.

• Required Impact

– High quality innovative research and doctoral training

– Trigger ‘inter’cooperation between organisations (PPP)

– Enhance researcher’s employability

– Shape entrepreneurial researchers and raise attractiveness.

ITN: CIRC€UITCircular European Economy Innovative Training

• Mobility scheme for Early Stage Researchers

• Highly competitive: 7% success rate

• Format

– 15 PhD researchers

– 4 Million Euro

– Network of universities (in our case: 7)

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ITN: CIRC€UIT

• University participants

– CfS: Leiden University and TU Delft, Netherlands

– Linkoping University, Sweden

– NTNU, Norway

– University of Grenoble, France

– Aston Business School, UK

– Cranfield University, UK

• Collaborators

– Ellen MacArthur Foundation

– Companies like Toyota, Winnow, Ericson

– More collaborative industries still welcome!

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Objective of the proposal

To develop a scientific framework to understand and further develop

• Service-oriented business required for a sustainable circular economy

• Assessment of its environmental, economic and societal impact.

Method: Interdisciplinary approach to ‘develop’ disciplinary knowledge

• User research, resource economics, environmental sciences, design

engineering, manufacturing, and business and management research will

• to understand and optimize service-oriented business models

Proposition

• Linear economy is stubborn

• Business (model) thinking seems to be the key to transition

• Broad systems perspective lacks in state of the art

• Circular business models still in niches

• Inconvenience, emotions and uncertainty about costs

Hypothesis

Innovative design and manufacturing of products is no longer a guaranty for

competitive advantage. So, we need to get beyond incremental innvoation.

Product Service Systems (=service oriented business) are the solution

• To overcome fierce price pressure, firms have to offer integral solutions, or

even experiences

• Service orientation means: company remains owner of materials

• So less new/raw/critical materials required

Company perspective

PSS poses challenges in terms of Business as Usual. It influences

design, production, distribution and branding/marketing:

• Switching to PSS may pose risks and uncertainty

• PSS might weaken the position in the value chain.

• Radical change of design, manufacturing and retail infrastructures

• Intensified communication with end users to ‘close the cycle’.

• The infrastructure for reverse logistics is not well established.

This is where the case studies come in

Company/ Organisation Topic

Ellen MacArthur Foundation Circular Economy

Toyota Material Handling Europe Design, Business Models

Winnow Solutions End-of-Life Management

NeoPost Business, DesignPhilips, Ericsson Users

Integrated approach needed

Comprehensive challenges out of obstacles

User level (B2B/B2C):

• User acceptance for circular resource efficiency

• Market introduction, branding and retail of CE value propositions

• Participation in and co-creation of CE value propositions

Comprehensive challenges out of obstacles

Business model level:

• Large scale application of PSSs and relevant value propositions

• Development of product / product-service roadmaps

• Organization strategies and digital enablers (open data)

Supply chain level:

• Sharing value along the value chain

• Reverse logistics

• Recovery strategies and management

Comprehensive challenges out of obstacles

Circular design level:

• Development of design strategies and methods/tools

• Validate design methodologies through creative demonstrators

• Technological aspects of design (Internet of Things, embedded

electronics)

System level:

• Overall environmental impact

• Overall economic effect

• Playing field as defined by regulations

Project structure

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Deliverables

1. Circular business model design methodology, tested with companies

2. Organisational change roadmap for companies with CE business models

3. Model on how digital strategies can create added value in a CE context

WP 1 BusinessHow to create business value in a circular business context?

Deliverables

1. Reverse logistics network design methodology (=CE condition)

2. Best practices and strategies for maximising retained values of PSS

3. Tools and demonstrators to specify a recovery solution

WP 2: Supply ChainsHow to organize supply and delivery chains for circularity?

Deliverables

1. Assessment of user (B2B, B2C) acceptance of circular value propositions

2. Decision making framework to facilitate identification, justification and

marketing of circular value proposition for companies

3. Communication manuals about CE risks and benefits to stakeholders

WP 3: Use and consumptionHow to stimulate and motivate circular use/consumption?

Deliverables

1. Tested approaches and manuals with design strategies, methods and tools

based on user and business requirements.

2. Design methodologies based on company demonstrators.

3. Validated design methodologies for optimal circular implementation of

advanced technologies.

WP 4: DesignHow to design circular value propositions and solutions?

Deliverables

1. Assessment of macro-environmental implications of circular business

2. Assessment of macro-economic implications of circular business models

3. Analysis of effectiveness of policy packages that facilitate the CE

WP 5:SystemsHow to ensure economic and ecological benefits and support?

Focus of the PhD research

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Systems: economic & environmental gains

Business: circular business models

Design: design of circular solutions

Systems: Governance

Supply chains: organisingcircular chains

Consumers: how to stimulate circular cons.?

Conclusion

15 PhDs to form a coherent research program and training network:

• Providing new insights in and business models for CPSS

• Reducing ecologic impact by boosting PSS across Europe

• Driving future innovation in the realization of CPSS

• Connecting industry and academia to develop new approaches to CPSS

• Disseminating the expertise to promote CPSS beyond the current network

• Triggering tripple helix co-operation

CfS: Demand driven innovationScience-based impact together with practice

Centre for

Sustainability

Gertjan de WerkAssociate Director LDE Centre for Sustainability

Goal Delivery mechanismEnhancing employability and career perspectives

Publication of the recent EU circularity package shows the relevance of the resource-efficiency in industry. Europe has currently no interdisciplinary post-graduateprogramme in this field. We therefore provide: Training by top EU universities covering the business, design, consumer and

system level perspective of circular business; some of those partners havealready established a bilateral collaboration on summer schools (i.e. doctoralspring school on PSS amongst Grenoble, Cranfield and Linkoping) or onnumerous European projects (e.g. H2020 ERN – Delft-Linkoping-Grenoble)

On the job training and secondment at the participating industry partners Access to a network of outstanding senior researchers via exchange visits to 1-

2 participating universities Opportunity for the ESRs to get involved in the EIT KIC Raw Materials and the

network of the Ellen MacArthur Foundation (EMF), which also means potentialaccess to more than 100 companies covering a vast industrial sectors

Shaping future generations of entrepreneurial researchers

This ETN focuses on how circular business models can work, addressing aspects oftechnology, business, users and systems. This implies: Training and PhD research inherently focused on entrepreneurship; the

interaction with companies on case studies will stimulates this Inherent project engagement with pro-active business circles (EMF, WBCSD,

EIT KIC RM) giving inspiring examples of circular entrepreneurshipRaising the attractiveness of research careers

We argue that practice-theory interaction is essential and attractive for raising a newgeneration of entrepreneurial academics and the attractiveness of careers in academia.Moreover, this research demonstrates the way the multidisciplinary and appliedresearches can be effectively conducted, by: Placement of the PhD students in activities organised by their university

related to sciences diffusion to first degrees or project sharing Participation to general public events (annual science fairs, annual day for

sustainability, annual day for mobility) Publication in consumers’ magazines, trade journals or to advertising for

companies projects

• Combining knowledge on sustainable consumption and production, disruptive innovations, and transition management (e.g. Christensen, 1997; Geels, 2004), we distinguish five main perspectives that are particularly relevant for a transition towards circular PSS business models.

• Business models. New ways are required to organise and value businesses and services. In addition to the businesses involved along the value chain, the interactions with design, user and system are explicitly taken into account. The core research question here is: How to create business value by circular provisioning?

• Supply chains. The role and weight of players along the supply chain will change, especially asking for developments in the areas of services, reverse logistics and remanufacturing. New ways of data acquisition and data management need to be implemented The core research question here is: How can we organize supply and delivery chains for circularity?

• User, i.e consumer (B2C), user (B2B) or government (B2G), but also stakeholders like retailers, or interest organisations and other NGOs. Social and behavioural practices have to be better considered to determine if a circular value proposition is going to be successful. Awareness creation in the public and corporate domain is of high importance. A focus on users is then necessary – of course including end-users, but also on other actors in the value chain. The core research question here is: How can we stimulate, facilitate and motivate circular consumption?

• Design of circular solutions – products that are for example suitable for inclusion in PSSs, or for upgrading, reuse, refurbishing or remanufacturing may require different design strategies, user involvement processes, assembly and disassembly processes, and marketing strategies compared to more traditional products. Using new technologies and ways of communication will be enablers. The core research question here is: How can we design circular value propositions(products, services or PSS)?

• System. For assessment of socio-economic and environmental aspects the larger system is relevant to avoid sub-optimisation in a small segment with adverse effects elsewhere. Scenario building and simulation tools for circular economy need to be further developed to support decision making when trade-offs occur. The core research question here is: How to ensure economic and environmental benefits and support change related to circularity?

Discipline Methodology Innovative stepsBusiness perspectiveEconomics Value chain analysis, transaction costs,

activity based costing, user valueassessments

Developing insights in the trade-offs with regard to value creation between‘linear’ and ‘circular’ value propositions. Assessment of how transition coststowards circular business models can be minimized.

Business modelling Compilation of value propositions,assessment of company corecompetences

Supply chain perspectiveLogistics Reverse logistics network design Development of a typology of optimized supply and delivery chains for circular

products, and insight into how to organise such chains so that actors in each stepof the chain have incentives to pursue circularity

Economics Assessment of end-of-life value

User perspectiveDesign User centered design (Applied

Ethnography, Contextual Enquiry,Cultural probes, Surveys, Focus groups)DfX-tools)

Incorporate end-of-life and behavioral aspects.Extend to end-of-lifecycle treatmentsFrom hotspots to scenariosTrade-offs between intangible/emotial factors and environmental and economic factors

Psychology Ethnography, Interviews, Observation Incorporate psychological reactions into sustainable transitions

Sociology Social practice theory Define segments that differ on acceptance of sustainable service

Business modelling Consumer research, User incentives incorporate renewal strategies in marketing/new product development

Design perspectiveDesign engineering Cradle-to-Cradle,

biomimicryCorrelate to front-end design

User centered design,value engineering

Incorporate end-of-life cycle input

Case study methodology Using circular solution demonstrators to generate new design methodologies

Data management Internet of Things Develop design rules such that application is beneficial from sustainabilityperspective

Environmental Science Life cycle assessmentSocial Life cycle assessment

Link to design featuresTrade-offs between environmental and intangible/emotial factorsCross-boundary rebound effects

(Re-)manufacturing Assembly/disassembly, Connection Development of a typology of product designs that make for which

The circular innovation pipelineFrom connecting by inspiration towards implementation

Examples of promising joint projects

Application: Knowledge & Innovation

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Governance, policy, regulation & transitions

Circular product design & circularbusiness models

Clean technology forresource efficiency

Industrial ecology & economics

Focus: Research & Development

Circular Products

Innitiative

PhD with company X

MOOCSustainable

Business Models

Raw Materials

Urban Systems

Production Consumption

Chains

Circular Area

Develop-ment

Reversed Logistics

EIT KIC Raw

Materials

Changes to circularity – what designs and

business models?• Circular product design, business

models and consumer behavior

Design for life time extension, repair,

manufacturing

Needs new business models: based

on value creation, not product sales

Needs new business competencies,

cultures, strategies

Particularly in B2C consumer

acceptance of new business models

is key

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Light: Pay-per-lux

Cars: sharing

Copiers: pay-per-print, design for component re-use

Changes to circularity – what governance?

• Governance, policy, regulation & transitions Production-consumption systems are

inert ‘Regime’: sunk costs, sunk habits and

relations in the value chain

‘Landscape’: a myriad of ‘taken for granted’ frameworks, like free markets and individual choice

We need concepts that can make systems more fluid and sustainable

Bottom up actions from the ‘Energetic society’: EMF, WBCSD, entrepeneurs

High profile actions aimed at changing mindsets: Dutch Urgenda

Tax from labor to resources…..

……..

Governance: the key challenge3

Means to build the bridge

• Mastertracks and courses

– Demand driven cases

– Outcomes communicated to society

– Master courses open to all LDE students

• Knowledge labs

– Thematic (virtual) labs with (PhDs) students working on shared roadmaps

– Strongly demand driven

– Output: inspiration, popular articles, papers, books, online learning.

• Professional course young professionals (Life Long Learning)

Unique positions CfS at various levels

Key activities and agenda’s

Glo

bal

• UL CML staff involved in UNEP International Resource Panel • UL CML staff regularly involved in OECD resource activities• EUR-RSM Prof in Residence at WBCSD World Business Council for Sustainable Dev.• TUD EMF-pioneer university for Ellen MacArthur Foundation ‘Circular Economy’ initiative• EUR-RSM has top expertise on business models• Int. Council of Science (ICSU) ‘Future Earth’ Initiative asked CML to develop ‘societal metabolism’ programme

EU

• Resource-efficiency agenda and ERAP: UL CML leads 15 Mio in EU projects• European Innovation Partnership and KIC RM: TUD core and CML associate partner KIC, LDE CfS mentioned• EU H2020, EC-DG ENTR, EC-DG ENV: TUD & UL CML strongly involved

Nat

ion

al &

R

egi

on

al /

Lo

cal • CML involved Development of ‘Grondstofloket’

• Innovation Quarter: TUD Cleantech activities• Circularity Centre Rotterdam invited LDE CfS to participate• TUD-UL MSc IE and governance experience can contribute to support The Hague as City of Peace and Justice to become

prominent in solving resource conflicts• City municipality & inhabitants initiatives from Leiden, Delft, Rotterdam, Den Haag, Westland, etc.

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Means to build the bridge

• Mastertracks

– Material science

– Industrial Ecology

– Technology in Sustainable Development

– Vakken selecteren en daarna integraal tot mastertrack ontwikkelen

• Kennislabs

– Oprichten rondom de onderzoeksgroepen op de verschillende universiteiten met masters/PhD’s

– Vraag gestuurd en uiteindelijk gefinancierd door bedrijven

– Output: papers, boeken, presentaties

• Professional course young professionals (i.h.k.v. Life Long Learning)