Value networks hold key to enabling circular economy
The transition to a circular economy can only be achieved if businesses are prepared to engage and collaborate with competitors in the form of 'value networks' which will help scale-up ideas and bring more sustainable products to market.
That was the argument put forward by UK sustainable development organisation Forum for the Future, which believes businesses need to shift their mindset from thinking in terms of value chains to being part of wider networks and systems. (Scroll down for video).
Speaking at a circular economy workshop in London last week, the Forum's senior sustainability advisor Louise Armstrong told delegates about the importance of creating new networks which connect organisations and individuals and allows members to share information which will benefit the entire group.
"There's a lot of talk about the circular economy, but we haven't made it happen yet," said Armstrong. "Enabling a circular economy isn't just about developing new products - it's about creating different flows of resources, skills and information. You can't have a sustainable product without having the right mechanism for getting that product to market.
"The businesses that have managed to pioneer in the circular economy space understand that it's not just about the products they create or the services the offer - it's about the relationships they have that enable them to do more. Working with the right collaborators and creating an element of trust between people is actually the key foundation that allows new things to happen - it's easy to forget that."
This, according to Armstrong, is where the idea of value networks comes into play. These networks are essentially a mode of organising; going beyond the one-way, linear thinking about supply chains to new ways of thinking about different flows of resources.
"Value networks allow you to exchange physical resources and raw materials, but they also allow you to think more holistically about how you exchange information, skills, trust and the governance that sits behind all of that," Armstrong added. "They give you the ability to expand horizons; capture opportunities that you might otherwise be missing.
"You shouldn't still be feeling like you need to control everything. No one player can control a network. You can bring in and collaborate with other businesses whose skills you don't have access to. The pioneering businesses are innovating from a shared sense of purpose and set of values.
"These aren't just networks of economic value - they have social and environmental impacts as well. And all of this really fits with the digitally-networked world we now live in. This is how we live our lives - exchanging information, creating new relationships quickly.
"Sometimes you meet people or other businesses and and you know you would be able to work with them - take advantage of that feeling, it will take you a long way."
Armstrong was speaking at a business workshop entitled Getting Value from the Circular Economy’, held by Forum for the Future and the Knowledge Transfer Network12 November.
Earlier this month, a new thought leadership paper unravelled the complexities surrounding the circular economy, with 'complex global supply chains' lack of clear standards across industries highlighted as some of the key barriers. Read more here, and for more recent stories on the circular economy, click here.
VIDEO: Why circularity? Why networks?