2. carlo vezzoli politecnico di milano . INDACO dpt. . DIS . faculty of design . Italy Learning Network on Sustainability course System Design for Sustainability subject 3. System design for eco-efficency learning resource 3.1 Eco-efficent system innovation

3. CONTENTS . Resume: sustainability and system innovation . Traditional sales model: eco-efficiency constraints . Moving towards system eco-efficiency . Product-Service System (PSS): definition . Eco-efficient system innovation typologies . Adding value to the product life cycle . Providing final results to customers . Providing enabling platforms for customers . Not all PSS are eco-efficient + rebound effects . Barriers to PSS diffusion . Eco-efficient system innovation: summing up

4. IN 50 YEARS A WORLD-WIDE EQUITABLE SYSTEMS OF PRODUCTION AND CONSU M PTION SHOULD USE ~ 90% LESS RESOURCES THAN THE INDUSTRIALISED CONTEXTS ARE DOING TODAY SUSTAINABILITY: SIZE OF CHANGE

5. SUSTAINABILITY: QUALITY OF CHANGE PROMOTE (EVEN) SYSTEM INNOVATIONS broader than product innovation, not only technological, but even socio-cultural and organisational innovations RADICAL CHANGE (DISCONTINUITY)

6. WITHIN THE ENVIRONMENTAL AND ECONOMICAL CRISIS WHICH ARE THE OPPORTUNITIES? DO WE KNOW ANY OFFER/BUSINESS MODELS CAPABLE OF CREATING (NEW) VALUE DECOUPLING IT FROM THE MATERIALS AND ENERGY CONSUMPTION? > significantly reducing the environmental impact of traditional production/consumption systems? A KEY CONTEMPORARY QUERRY:

7. ECO-EFFICENT SYSTEM INNOVATIONS innovations delinking economic interests from environmental impact increase broader than process and product product innovations, not only technological, but even socio-cultural and organisational ones

10. “ designing and providing a system of products and services (and related infrastructure) which are jointly capable of fulfilling client needs or demands more efficiently and with higher value for both companies and customers than purely product based solutions. […] PSS could decouple the creation of value from consumption of materials and energy and thus significantly reduce the life-cycle environmental load of current product systems.” [UNEP, Tischner, Vezzoli, 2009] ECO-EFICIENT SYSTEM INNOVATION : A DEFINITION free pdf: http://www.d4s-sbs.org/

11. discrete resources optimization: phase/stakeholder -based SYSTEM ECO-EFFICENCY: moving out of traditional product sales/design producer suppliers customer client end-of-life manager retailers designer [e.g. washing machine] [e.g. satisfaction-syetem= to have cleaned cloths] [e.g. detergent] [e.g. energy supply] producer suppliers customer client end-of-life manager retailers designer producer suppliers customer client end-of-life manager retailers designer wide system (multiple life cycles) resources optimization: demand/satisfaction -based system (life cycle) resources optimization: product/function -based

17. Kluber sells to engineering industry lubricants and ... ... a service of analysis for the lubricants effectiveness and environmental impact reduction (movable lab) BENEFIT FOR KLUBER . Offer diversification . Customer loyalty BENEFIT FOR CUSTOMER . Improved efficiency > Cost reduction . Less environmental issues to solve BENEFIT FOR ENVIRONMENT . reduction and optimisation of lubricants use > reduced environmental impact E-E PSS of Type I – Adding value to the product life cycle KLUBER LUBRIFICATION KLUBER LUBRICATION CUSTOMER Engineering industry LAB

18. E.-E. SYSTEM INNOVATION (TYPE I) ADDING VALUE TO THE PRODUCT LIFE CYCLE a c ompany ( alliance of companies ) provides additional services - maintenance, repair, up-grading , substitution and product take back - to guarantee life cycle performance of the product ( sold to the client) it is reduced the user reaponsibility in the use and/or disposal of the product/semi-finished product (own by her/him)

20. Rank Xerox offers a package deal (products + services). ... and RX installs and maintain photocopiers (not owned by the customer) , makes and delivers copies. The customer pays for the package ... BENEFIT FOR RANK XEROX . Directly profit from components re-use and material recycling from discarded products . Directly profit from resources efficiency BENEFIT FOR ENVIRONMENT . Increased products’ lifespan and resources efficiency > reduced environmental impact BENEFIT FOR CUSTOMER . No need to invest in the machine purchase and overall cost reduction in use Rank Xerox is not a photocopier producer only. RANK XEROX: A DOCUMENT COMPANY! E-E PSS of Type II – Providing final results to customers XEROX CUSTOMER RANK XEROX

21. E.-E. SYSTEM INNOVATION (TYPE II) P ROVIDING FINAL RESULTS TO CUSTOMERS a c ompany ( alliance of companies ) provides a customised mix of services, instead of products, in order to provide a specific final result to the customer the client does not own the products and does not operate on them to obtain the final satisfaction (the client pays the company to provide the agreed results)

23. BENEFIT FOR CUSTOMER . No need to invest in the machine purchase and overall cost reduction in use The customer will pay for the number of washes he/she will do ... PARTNERSHIP + The partnership offers an enabling washing platform. ... and the partnership delivers the washing machine (not owned by the customer) and supply energy (not directly paid by the customer), maintenance, up-grading and end-of-life collection. BENEFIT FOR ENVIRONMENT . Increased energy efficiency and products’ lifespan > reduced environmental impact BENEFIT FOR THE PARTNERSHIP . Directly profit from energy efficiency . Re-use of components from discarded products E-E PSS of Type III – Providing enabling platforms for customers ARISTON + ENEL : PAY-PER-USE ARISTON Household appliances ENEL Energy provider CUSTOMER Household

24. E.-E. SYSTEM INNOVATION (TYPE III) ENABLING PLATFORMS FOR CUSTOMERS company ( alliance of companies ) provides access to products, tools, opportunities enabling clients to get their “satisfaction” the client does not own the product/s, but operates on them to obtain the “satisfaction” (and pays only for the use of the product/s)

27. SYSTEM INN. ECO-EFFICIENT POTENTIALS the economic interest of a stakeholders foster: . product life cycle optimization . materials life extension . “in use” resources minimization higher system eco-efficiency given too by: . provider: higher available investiment allowing most advanced and effcient technologies . product sharing > faster replacement of ware out products with new and more eco-efficient ones (on equal number of units produced in time)

28. > CRITERIA AND GUIDELINES ARE NEEDED > METHODS AND TOOLS ARE NEEDED to orientate design towards system eco-efficent stakeholder interactions (and related mix of products and services) NOT ALL SYSTEM INNOVATION ARE ECO-EFFICENT!

29. NOT ALL ECO-EFFICENT SYSTEM INNOVATION ARE WITHOUT (ENVIRONMENTAL) REBOUND EFFECTS ! > may generate unwanted (enevironmentaly damaging) side effects e.g.1 access to product, rather than their ownership, could lead to careless behaviour (shorter product lifespan > higher environmental impact) > some rebound effects are too difficult to be predicted, but as far as they are, design attention should be given to avoid those eventual side effects

30. WHY ECO-EFFICIENT -PSS ARE NOT YET DIFFUSED? IN FACT, PSS IS NOTHING NEW every most of the products involve services and vice versa and change towards service economy is happening anyway services (not products) generate: . more than 50 % of GDP in Europe . more than 75% of GDP in USA

31. BARRIERS FOR THE ECO-EFFICIENT PSS DIFFUSION: . for the customers/users : in industrialized contexts the cultural shift necessary in accepting behavioural change, e.g. a ownerless consumption, … . for companies : the difficulty in changing the corporate culture and the traditional business model, … . for governments : the difficulty in defining and implementing policies to facilitate EE-PSS oriented companies, …

32. DIFFUSED INERTIA (CONSOLIDATED HABITS) IS LIMITING ECO-EFFICIENT SYSTEM INNOVATIONS DIFFUSION . PSS are not simply leapfrog business strategy: a transition path is many time needed . there is a lack of knowledge on SPSS development: we need a new generation of designers (and design educators) and other professionals capable of operating for ( complex ) system research and innovation

33. … ANYHOW A PROMISING WIN-WIN MODEL “ nevertheless, PSS development, seen as a whole, present a potential for generating win-win solution which promote profit, environmental and social benefits” “ they have the potential to provide the necessary, if not sufficient, conditions to enable communities to leapfrog to less resources intensive system of social and economical standards of living” [UNEP, 2002]