In July 2009, I was inspired by my then working space in the Research wing’s open office at the Aalto University’s Design Factory in Espoo, Finland, to launch a group blog called REculture: Exploring the post-consumption economy of repair, reuse, repurpose and recycle by informal businesses at the Base of the Pyramid
In a post titled RE culture: The BoP innovator’s/entrepreneur’s biggest opportunity space is post consumption, I explained my concept so:
Stepping back, if you take the broad space of REuse, REpurpose, REpair and REcycle (though I’m still debating whether that last quite applies in the same context as we’d expect it to mean in the developed world) – its the low hanging fruit for the BoP entreprenuer’s opportunities for income generation. […]
… it seems at first glance that they look to be more or less the same thing i.e. how different is it to reuse a plastic bottle to contain some liquid from recyling it? particularly if the manufacturer had intended for it to be a disposable container?
Yet, from the big picture perspective, one can say (and it has been said before) the whole concept of recycling is a cost in the OECD world whereas its actually a source of income, in a myriad ways, among the BoP.
That is, the lower income market tends towards maintenance and extending the lifespan of the products (through repair or repurposing it) they purchase rather than disposing it for convenience or replacing it for a trendier style.
However, what’s interesting about this, is the fact that these opportunities would
a) very rarely be spotted as one in mainstream consumer culture;
b) not be a gap per se due to a difference in mindset/worldview OR even
c) not be profitable enough, given the comparative cost of labour vs the price of the product involved.
These conditions for making money, and more so, making money that is deemed a valid ROI seem only to be available among the lower income demographic and in the developing world.
So, at this point, early stages of exploration though it is, one could say that the whole area of “post consumption” consumer practices – most of which have withered away like the appendix in the ‘rich’ world – forms one major basis for both products and services, with value addition to varying degrees, in the ‘informal economies’ of the developing world.
Earlier last week, however, I received the McKinsey Quarterly and the diagram below caught my attention. Take a closer look at their labels for each stage of the “Supply Circle”, formerly known as a supply chain:
Value is created by looping products, components, and material back in to the value chain after they fulfill their utility over the life of the product. Yes, indeed, the leaders in the field are exploring these hitherto unconsidered sources of inspiration for process innovation.
It was this basic insight that led us to the research project among the jua kali of Kenya in August of 2010. Innovation under condition of scarcity capture our initial findings from the fieldtrip to observe, document and be inspired by the informal manufacturing ecosystem in the resource scarce parts of the developing world. My research associate Mikko Koskinen and I prepared this set of slides showcasing this informal industrial ecosystem whose practices, we believed, could conceivably inspire new ways of manufacturing and material use for a more sustainable future. You’ll note in the second last slide the table of research outcomes as they related to business, design and of course, engineering. After all, we were part of the Design Factory, an interdisciplinary experimental platform for innovation. You’ll find mention of REculture as a concept for sustainability and value creation here and here, based on my original work in Finland.
Today, the fundamental concept, that of being inspired by those who make do with so little, has gone comfortably mainstream. McKinsey states on their website:
This article offers a practical set of tools to help manufacturers and waste-management companies capture the resource-productivity prize. Manufacturers are likely to achieve the quickest impact if they start by focusing on their areas of core competency. But to secure the full value of their efforts, companies must optimize their operations for resource productivity in four broad areas that cut across their business and industry: production, product design, value recovery, and supply-circle management. By taking a comprehensive approach to resource productivity, companies can improve their economics while strengthening their value propositions to customers and benefiting society as a whole.