Can Abstract Ideas Generate Change? The Case of the Circular Economy

281 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy CHAPTER 15 Can Abstract Ideas Generate Change? The Case of the Circular Economy ERKKI-JUSSI NYLÉN Takeaways for Leading Change There is enthusiasm for transforming our economic model from a linear to a circular one. However, solving this wicked problem is a tall order: The socio-institutional environment in which this transformation must be driven is complex. There are also complexities, discrepancies, and conflicts of interest related to circular economy (CE) thinking itself. Even though the change towards the CE is complex and contradictory, the concept of the CE offers a good objective to pursue. CE thinking is a change provoking framework for actors to orient their action or practices. The promotion of the CE illustrates how outlining visions and identifying targets of change supports the change making process and provides guidelines for the actors involved. Nevertheless, the spread and internalisation of the concept remains critical for change making. If enough actors internalise, accept, and support the idea of change to some degree, it is quite probable that they will orient their actions accordingly. Analysing how an abstract concept such as the CE can – or cannot – generate change teaches us important lessons about how major changes can be realised. 282 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy T ransforming the current unsustainable economic model is perhaps the most complex problem of our time. The economy is overstepping the biophysical boundaries of the planet, and the way in which the economy is presently structured has caused grave environmental problems. However, enacting systemic change geared towards more sustainable alternatives is challenging. There are numerous actors and conflicting interests nested in the way our economies work, and such a change could tip the balance in terms of who loses and who gains. Allocation of resources, which lies at the heart of the economy, creates added complexity. The reallocation of resource flows has the potential to create distrust and cause major harm. For example, if food prices would rise significantly as a result of structural changes to the economy. The task of guiding it onto a sustainable path is a wicked problem – relentless, unconstructed, and cross-cutting. This chapter discusses the circular economy (CE), which offers one possible way to solve the wicked problem of steering the economy in a more sustainable direction. The underlining objective of the CE is to change the logic of how the economy works. The purpose of this chapter is to analyse the change making that CE thinking provokes. The promotion of the CE illustrates how abstract ideas can lead to change: it shows the way in which it is possible to generate momentum for large-scale change in a complex contemporary society. I use the notion of CE thinking to refer to the logic and change making objective upon which the CE model is based. In following sections, I explain what the CE is and how it has become a topical concept. After that, I will discuss why making the transformation towards a CE is challenging in contemporary societies, and why it is difficult to change the old ways of doing things, even if they can be The purpose of this chapter is to analyse the change making that CE thinking provokes. The promotion of the CE illustrates how abstract ideas can lead to change: it shows the way in which it is possible to generate momentum for largescale change in a complex contemporary society. 283 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy seen as sub-optimal or unsustainable. I will then present the concept of ideological steering, which offers a more specific framework for analysing how an abstract idea such as the CE can generate change. Finally, I will discuss how the promotion of CE relates to the dynamics of change, the internal and external challenges of CE, and the implications for leadership for change. What is the Circular Economy? To me, the circular economy is probably the next step in the evolution of environmental ecology, where the economy and the environment really embrace each other and change the world (Sitra, 2015)� The above statement reflects the abstract hopes and visions that shine through in the CE discourse. The citation is from Johanna Pirinen, Director of Corporate Responsibility of Konecranes, a large Finnish company. She participated in a panel discussion that discussed the opportunities and challenges of the CE in practice (Sitra, 2015). Her message is strong, hopeful and forward looking; but at the same time quite abstract. What does it actually mean for the economy and the environment to embrace each other? Furthermore, why should they embrace each other? The message is primarily about environmental problems and sustainability issues that derive from how our economy currently operates (Boulding, 1966; Steffen et al., 2015). Lately, the CE has been presented as a way to tackle these issues (e.g. Andrews, 2015). On a general level, CE thinking concerns remodelling the economic system. The CE is the opposite of the currently prevailing model, the linear economy, which is based on the logic of “take-make-use-dispose”. This logic does not consider sufficiently the material boundaries of the planet. The linear economy rests on the assumption that there is plenty to “take” and always space for “disposal”. For the linear model to thrive, the material throughput requires continuous acceleration, which means growing amounts of “taking”, and, at the other end, growing amounts of “disposing” (Andrews, 2015; Jurgilevich et al., 2016; Webster, 2013). 284 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy The aim of CE thinking is to move from open-ended material flows to closed material flows. This means resources that are brought into the production and consumption system – into the system of “making and using” – should stay there for as long as possible. This should result in much less raw material extraction and much less disposal of materials as waste. The practical means of achieving this objective derive from two thematic sets: the first is the ecological design of products and services. The second is the utilisation of end-of-life products and materials (i.e., sustainable waste policy). The change provoking setup of CE thinking is illustrated in Figure 1. The scientific contributions to the CE stem from disciplines like environmental economics, ecological economics, industrial ecology, systems theory, performance economy, and cradle-to-cradle thinking (Andrews, 2015; Ghisellini, Cialani, & Ulgiati, 2015; Gregson, Crang, Fuller, & Holmes, 2015; Silva, Stocker, Mercieca, & Rosano, 2016; Webster, 2013). The shared factor of these schools of thought is their concern for the sustainability of the current model of production and consumption. In this chapter, I will analyse the general mechanism of how an abstract concept like the CE can generate change. To do so, I will utilise the concept of ideological steering (Meadowcroft, 2007). Moreover, I concur with Femma Blomsma and Geraldine Brennan (2017) that the CE is an umbrella concept, which Paul Hirsch and Daniel Levin (1999, p. 200) define as Customer value as subjectively determined construct Customer value as multi-dimensional in nature Circular flow of resources Ecological design Less raw material extraction Less disposing of materials as wastes From a linear economy A circular economy Towards Take Make Consume Dispose FIGURE 1. The CE aims to bend the logic of production and consumption from being open ended towards a closed loop 285 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy “a broad concept or idea used loosely to encompass and account for a set of diverse phenomena.” The CE as an umbrella concept acts as a framework that gathers other helpful and like minded concepts beneath it. Under the same umbrella-like, change making objective, tools and practices can together create greater momentum for change. Yet, as this chapter shows, change does not necessarily come easily. Creating Momentum for Societal Change For an abstract idea to generate societal change, a set of divergent and influential actors need to mobilise behind it. Lately, CE thinking has been gaining such momentum across Europe. The idea has been promoted actively by the European Union (EU), with the European Commission presenting a CE policy package in 2015. The European Commission does not see the CE only as a large-scale structural change to guide the economy onto a sustainable track. It also views it from the standpoint of the competitive advantage, business opportunities, and job creation. In Europe, the CE started to make its way into public discourse as a result of promotion by the Ellen MacArthur Foundation. Since its establishment in 2010, the foundation has probably been the most influential promoter of CE thinking (Hill, 2015). In Finland, Sitra, the Finnish Innovation Fund, has been similarly involved. Sitra is a public foundation supervised by the Finnish Parliament; its objective is to promote the economic prosperity and the future success of Finland (Sitra, 2017a). One of themes Sitra has chosen for its future-oriented work is the promotion of a “carbon-neutral circular economy” (Sitra, 2017b). Sitra promotes this through project funding and publishing reports presenting the CE in a positive light (e.g., Sitra, 2015; 2016). Creating momentum for change also involves organising seminars in which influential actors participate. When the EU published its CE policy package, Sitra held a seminar on the topic at the prestigious Finlandia Hall in Helsinki. Speeches were given by European Commission Vice-President Jyrki Katainen, Finnish Minister of Agriculture and Environment Kimmo Tiilikainen, Member of European Parliament Heidi Hautala, and copresident of the Club of Rome Anders Wijkman, to name a few (Sitra, 2017c). 286 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy Clearly, there is a buzz around the idea of the CE, but prestigious seminars and speeches from the upper echelons of society count for nothing unless change happens at the grassroots level. If CE thinking is to break through, the still-abstract CE discourse must translate into actual changes in the practices of production and consumption. The most obvious example of these practices is recycling. Other examples include waste utilisation, turning products into services, sharing economy practices, and ecological product design. The latter means that products should be designed to be updatable, easy to repair, and pollutant free. Furthermore, they should be reusable and/or minimize the amount of waste created during their life cycle. Digitalisation opens up opportunities for the creation of forums where actors can exchange goods. One of these is the ResQ Club (2017), which is a smart phone application that enables restaurants to offer their leftover meals at a discount to prevent food going to waste. Locked into the Old Ways of Doing Things In this section, I will discuss the complex socio-institutional playing field where the transformation towards the CE is being driven. As the previous section showed, there is momentum for change. But when considering the agenda of CE thinking, the magnitude of the change required is huge. Changing the prevailing logic of how resources are moved and channelled in the economy is a tall order (cf. wicked problems). Such change is challenging for two reasons. First, the old ways of doing things – the incumbent technologies and practices – are likely resistant to change. Second, the socio-institutional environment where change is driven is complex. The contemporary socio-institutional environment has become more complex and polycentric from the perspective of power distribution. This also relates to the transition “from government to governance.” In practice, this means that instead of control and coercion, administrations nowadays use subtler ways of steering society. This is because power has been distributed horizontally and vertically. This has led to increased complexity in the ways in which societal development is steered. The verticality of power distribution means the nation state is no longer the undisputed 287 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy nexus of power. Instead, the importance of the local and global has grown (for example, cities and the European Union). The horizontal distribution of power means that numerous institutions other than the nation state’s administration and policymakers have a say on the direction in which societal development should be steered. These actors include corporations, interest groups, social movements, researchers, and think tanks, and they often have diverging interests. The polycentric power distribution and the differences of interests enhance the role of dependencies and networks between actors in the process of steering societal development. It is unlikely that a single actor can define the direction of development. Instead, the objectives of development and means to proceed must be negotiated by different actors. This is not an easy process, since change is not in the interests of all parties (Evans, 2012; Meadowcroft, 2007; Pierre, 2000; Pierre & Peters, 2000). The concept of lock-in explains why the old ways of doing things enjoy huge advantages compared to radically new technologies and practices. It illustrates types of difficulties change makers are up against, as change must take place in grassroots level practices to steer production and consumption onto a sustainable track. First, incumbent practices and technologies are already familiar and tested. They might also have a preestablished infrastructure, a network of suppliers and customers and suitable regulations in place (Meadowcroft, 2009). Second, the parties behind incumbent sociotechnical practices have political leverage, as James Meadowcroft (2009, p. 329) notes: Economic actors associated with established technologies are not enthusiastic about alternatives that would render their competencies obsolete� And since economic strength (investment, income, exports, employment) can be converted into political influence, they can place substantial hurdles in the path of nascent rivals� The complex socio-institutional environment and advantages possessed by established practices suggest it is difficult to steer the development of contemporary society towards the type of change envisioned by CE thinking. There are many influential actors in contemporary societies who 288 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy have something at stake in societal development. While some actors are satisfied with the way things are and might directly or indirectly obstruct attempts to deviate from the status quo, others promote different ways of doing things. In addition, some actors might promote a quite specific type of development, for example, framing development in a way that directly benefits themselves. When talking about change of such a huge magnitude, there are bound to be parties from each type. Overturning the old ways of doing things is hard even when incumbent technologies or practices are sub-optimal. When talking about societal change, there is no such a thing as a clean slate; change always unfolds against some sort of an inherited setup (Lähde, 2013). This inherited setup has a defining history. It is nevertheless possible to create momentum for large scale change in complex and polycentric societies. The following section introduces the concept of ideological steering, which shows how momentum for change can potentially produce results in complex contemporary societies. Ideological Steering: The Interplay Between the Concrete and the Broad Ken Webster (2013), Head of Innovation at the Ellen MacArthur Foundation, has listed six temptations to be avoided when talking about the CE. The first one hits at the heart of James Meadowcroft’s (2007, p. 311) concept of ideological steering: Temptation#1 is to be too concrete� (Webster, 2013, p� 545) According to Webster (2013), the problem of being too concrete is that it can narrow the view of the issue. On the other hand, being too broad can result in being too vague. The concept of ideological steering encapsulates the interplay of the concrete and the broad in terms of efforts to steer societal development. Meadowcroft (2007, p. 311) defines ideological steering as “the development of sets of inter-related ideas that 289 Leading Change in a Complex World: Transdisciplinary Perspectives Can Abstract Ideas Generate Change? The Case of the Circular Economy influence activities at all levels.” Ideological steering shows how concepts such as sustainable development (SD) and the CE use their abstract and overarching nature to their benefit. These concepts can exceed the lines of political positioning, but they can also work as a framework for building political arguments. In this way, a set of ideas can create consensus and provide ammunition in debates. To illustrate, sustainable development is commonly defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development, 1987, p. 41). That definition rises to the level of the “common good,” and it is easy to agree with and difficult to directly argue against. Still, there is plenty of room for debate about SD. Declarations of the “common good” type do not answer the question of how SD is to be achieved. For ideological steering to work, abstract and overarching concepts that provoke change need to be accompanied with other, more concrete concepts. These clarify the direction of societal development. The more concrete concepts reveal how change could be achieved and what it would look like in a specific context. While the interplay between the broad and the concrete is important for furthering change, it is essential for actors in some degree internalise and accept ideas related to change. The internalisation of ideas can manifest as commitments towards change. Widespread acceptance and commitment to change can enable the utilisation of more concrete instruments to further development. These concrete instruments include for example, adjusting regulation, creating new institutional actors, funding, and collaborating in different ways (Meadowcroft, 2007). When analysing the promotion of the CE from the point of view of ideological steering, the same kind of logic applies as with SD. The objective of the CE is to bend the linear “take-make-use-discard” economy into a circular one, and in that way to make the economy sustainable. It is easy to endorse this objective and difficult to directly disagree with it. However, the objective of the CE does not in itself reveal how such change should be pushed through. 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The Case of the Circular Economy Leading Change in a Complex World: Transdisciplinary Perspectives Copyright © 2019 Tampere University Press and the authors Edited by Anni Kangas, Johanna Kujala, Anna Heikkinen, Antti Lönnqvist, Harri Laihonen and Julia Bethwaite Tampere: Tampere University Press