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Frugal value: Designing business for a crowded planet

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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.

Published in: Economy & Finance, Business
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Frugal value: Designing business for a crowded planet

  1. 1. CARINA MILLSTONE DESIGNING BUSINESS FOR A CROWDED PLANET 21.05.14 IIED
  2. 2. The challenge of the crowded planet The Planet The Crowd The Anthropocene • Global steady-state economy “sized” within planetary limits • Resource contraction and convergence • De-growth and good growth • Resilience
  3. 3. What does responsible business look like on the crowded planet?
  4. 4. 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
  5. 5. “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?
  6. 6. On the crowded planet, business innovates for frugality. Efficiency Sufficiency Frugality Requires innovation in • Technology • Organizations/ Institutions • Behaviors/ Lifestyles • Relations/ Society
  7. 7. 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.
  8. 8. On the crowded planet, business offers efficient and sufficient products 2. the nature of products and services
  9. 9. Products can be designed for frugality... 90% 10%
  10. 10. …through the incorporation of attributes for efficiency and sufficiency. PRODUC TNaturally- inspired Humane Job- efficient Operation Skill- supporting Cultural Function Non- proxy Frugally- normative Lifelong InfluenceDwindling Streamlining Path- Independent
  11. 11. 3. business models for frugality On the crowded planet, business models require and drive frugal products and services
  12. 12. creation of a high-volume of products #1: the product creator and steward creation and stewarding of frugal products
  13. 13. #2: the product retailer and sustainer retail of high-volume of products retail and aftercare of frugal products
  14. 14. #3: the product renter rental of selected products broad rental of frugal products
  15. 15. #4: the service provider sales of products and provision of services broad provision of frugal services & product services
  16. 16. #5: the product and service matchmaker businesses “doing business” households exchanging amongst themselves
  17. 17. models and product lifecycle
  18. 18. #1 Product Creator #2 product retailer #3 Product Renter #4 Service Provider #5 Product & Service Matchmaker PEER END USER sal e,rental,service s ale s ale sal e,rental,service sal e retu rn rent al service sale PRODUCT END USER product flows today
  19. 19. models and product flows #1 Product Creator & Steward #2 product retailer & sustainer #3 Product Renter #4 Service Provider #5 Product & Service Matchmaker PEER END USER sal e,rental,service s ale buy- back buy -back s ale sal e,rental,service buy-back /end-of-lease sale/l ease retu rn rent al service buy-back /end-of-lease sale /lease PRODUCT END USER
  20. 20. #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 HH HHH HHH HHH #4 service provider HHH HHH HH HHH HHH HHH #5 product & service matchmaker HH HHH HH HHH BUSINESS MODEL models and product attributes ATTRIBUTE
  21. 21. #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
  22. 22. • 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
  23. 23. Products and business models for frugality are insufficient. Organizational design is an integral part of frugal value. 4. some conclusions..
  24. 24. 1. How do we consider scale? 1. What is the best ownership structure for different sectors? 1. When is providing products and services on a commercial basis detrimental to frugality? some questions…..
  25. 25. 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.
  26. 26. Please get in touch at carina@frugalvalue.net

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