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Bridging the Circular Economy and Social Enterprise: The Dutch Ministry of Defence and Biga Groep

March 18, 2018 • INNOVATION, SUSTAINABILITY & ETHICS, Emerging Ideas, Social Impact

by Khaled Soufani, Terence Tse, Mark Esposito, Giorgos Dimitriou and Panayotis Kikiras 

A holistic approach to circular economy is the one that merges the mission-driven approaches of CSR, social enterprise, and social entrepreneurship with the ecological potential of circular economy for social good. This can be done through social enterprise partnerships. As an example, this article presents the case of the Dutch Ministry of Defence (MoD) and a local social enterprise known as Biga Groep (Biga Group) in terms of how they work harmoniously to put circular economy initiatives into fruition.

 

Nearly fifty years after Milton Friedman famously wrote “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits”, society has come a long way. We’ve gone from academics espousing maximisation of shareholder value to benevolent schools of thought that dominated the literature between 2005 and 2011, such as corporate social responsibility (CSR), social entrepreneurship, social enterprise (Yunus, 2009), shared value (Porter & Kramer, 2011), and even the B corporation. CSR focusses on the corporation as the actor and the contributions the corporation makes to society outside of its business functions. Shared value, B corporations, social entrepreneurship and social enterprise focus on  market-driven, business-oriented schemes toward solving a social problem. These concepts all share one thing in common: they focus on bettering the general welfare of society, which is to say, people.

In terms of sustainability, it would be insufficient to say that the circular economy is environmentally friendly. While that may be one of its characteristics, the distinctive feature of circular economy is its objective of maximising what is already in use along all points of a product’s lifecycle, from sourcing, to supply chain to consumption.

In more recent years, as more climate research has been published, the conversation has taken on an environmental emphasis. Older schools of thought that began in the late eighties and nineties, such as natural capitalism (Lovins, Lovins, & Hawken, 1999), cradle to cradle (McDonough & Braungart, 2002), biomimicry (Benyus, 1997), and circular economy (Pearce & Turner, 1989) have all come back into focus, none more impressively than the circular economy, thanks to the major work of the Ellen MacArthur Foundation and McKinsey & Company. While many think of these sustainability paradigms as doing more with less, the circular economy is also recuperative. In terms of sustainability, it would be insufficient to say that the circular economy is environmentally friendly. While that may be one of its characteristics, the distinctive feature of circular economy is its objective of maximising what is already in use along all points of a product’s lifecycle, from sourcing, to supply chain to consumption. Remaining unusable parts for one function are reallocated as a new source for another purpose. In this way, primary materials used in construction, car and electronics manufacturing, synthetic fertilisers and pesticides, fuel and non-renewable energy, and land use, among others, can be replaced with recovered and repurposed materials in cascaded use, a top-down approach to using and reusing materials.

Circular economy research is timely. As global consumerism continues to expand and better methods of capturing data are available, we are learning that there are some serious problems with the way we do business as a species. For instance, it is estimated that, in Europe, 90 percent of raw materials used in manufacturing become waste before the product ever even leaves the factory, while 80 percent of products made are thrown away in the first six months of their existence (Girling, 2005). So the circular economy gives us hope of doing better. It has been estimated to have the potential to reduce consumption of new materials by 32 percent within fifteen years, and by 53 percent by 2050 (Ellen MacArthur Foundation and McKinsey Center for Business and Environment, 2015). While the literature on the circular economy does underscore job creation as a positive externality, it is typically discussed in the context of an overall social benefit based on the creation of new circular economy industries, such as renewable energy. Social issues such as homelessness and underprivileged groups, areas that social entrepreneurship and social enterprise address, are not an area of focus in the circular economy literature. Areas of convergence between social enterprise and circular economy have thus far been highlighted far too little.



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About the Authors

Dr. Khaled Soufani is Professor of Management Practice (Economics) and Director of the Executive MBA in the Judge Business School at the University of Cambridge, where he also directs the Executive MBA and the Circular Economy Center. He has published extensively in the area of financial management and economic affairs of small and medium-sized enterprises. His current research interests relate to fast-expanding markets and the economics of innovation.

Dr. Terence Tse is an Associate Professor at ESCP Europe London campus and a Research Fellow at the Judge Business School in the UK. He is also head of Competitiveness Studies at i7 Institute for Innovation and Competitiveness. Terence has also worked as a consultant for Ernst & Young, and served as an independent consultant to a number of companies. Hee has published extensively on various topic of interests in academic publications and newspapers around the world. He has been interviewed by television channels including CCTV, Channel 2 of Greece, France 24, and NHK.

Dr. Mark Esposito, PhD., is a Socio-Economic Strategist and bestselling author, researching MegaTrends, Business Model Innovations and Competitiveness. He works at the interface between Business, Technology and Government and co-founded Nexus FrontierTech, an Artificial Intelligence Studio. He holds appointments as Professor of Business and Economics at Hult International Business School and he is equally a faculty member at Harvard University since 2011. Mark is an affiliated faculty of the Microeconomics of Competitiveness (MoC) network at Harvard Business School’s Institute for Strategy and Competitiveness and is currently co-leader of the network’s Institutes Council.

Giorgos Dimitriou is the Research and Technology Projects portfolio coordinator at the European Defence Agency overseeing a portfolio of numerous international projects and leading the research on Circular Economy in the defense sector. He has worked for more than fourteen years in the European Public Service, and has authored, co-authored and coordinated numerous reports published at the EU level. He is an acknowledged contributor to the Global Risk 2013 report commissioned by the World Economic Forum as well as to a report carried out in collaboration with Harvard University and the European Parliament on a novel intervention to address the European Financial Crisis.

Dr. Panayotis Kikiras is currently Head of Unit Innovative Research in European Defense Agency in Brussels. Through its work on innovative research the directorate supports EDA Member States in their efforts to cooperate, promote and manage cooperative Research and Technology projects. It identifies dual-use synergies and opportunities with the European Commission and the European Space Agency to enhance civil-military cooperation, interoperability and effective R&T spending. Panayotis before EDA, has been working for AGT International since 2011. He was Vice President of Research leading the enabling technologies research group which conducts research in the areas of Cyber Security, Big Data and Energy Analytics. He holds a PhD and an MSc in Computer and Electrical Engineering from the Technical University of Athens and an MSc in Management and Economics of Communication Networks from the University of Athens.

 

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