Recovery will be “green” or not. This is essentially a message sent by Ursula von der Reyen during the presentation of her “Green Agreement” at the end of 2019. Soon, the IMF, the Davos Forum, and even the president of the world’s largest economy followed. China is not left behind either. The country is now positioned as a world champion in the production of solar panels, batteries and electric vehicles, with the announcement of carbon neutrality in 2050.
Recovery will be “green” or not. This is essentially a message sent by Ursula von der Reyen during the presentation of her “Green Agreement” at the end of 2019. Soon, the IMF, the Davos Forum, and even the president of the world’s largest economy followed.
China is not left behind either. The country is now positioned as a world champion in the production of solar panels, batteries and electric vehicles, with the announcement of carbon neutrality in 2050. !! At the same time spectacular, these strategic movements are unlikely to reach the goal of decarbonizing our economy ourselves. In fact, it’s much “easier” to change the technology than to reorganize the entire model. Our industrial production system employs a long value chain of equipment manufacturers, suppliers, customers, intermediaries, distribution networks, etc., and somehow uses fossil fuels and metal or mineral raw materials available in limited quantities. I am using it.
Taking personal mobility as an example, it is possible to replace all thermal cars with electric vehicles. If you’re happy with updating 1.5 billion private cars worldwide, you’ll need more resources to make the change. Perhaps it uses less fossil resources, but the car body is more metal and the motor and battery are much more copper (+ 60kg) and lithium (3kg).
Is the functional economy clear?
However, if you want to save resources and energy, optimization needs to question the model more fundamentally. The transition to a functional economy, a model based on the sale of the services provided, and not the goods that provide this service, must be logically imposed on areas where the economy is widespread. Purchase line.
Beyond the ecology aspect, this economy meets both the changing needs of consumers and the resilience needs of industrial players. In the automotive space, better-thought-out and more developed car-sharing can adapt to mobility needs in real time. No more daily trips in family minivans planned for the holidays! On the manufacturer side, we have a daily relationship with our customers. You can stay in touch even if you reduce your use of the service. In the event of a crisis, suppliers can adapt their proposals more quickly and re-adapt when activity resumes successfully. If it was an easy purchase, it would have disappeared from the radar for a long time!
Similarly, functional economics make it possible to address the durability challenges of everyday items. To be sure, competing on an equal footing with the Asian industry, which floods the market with products that have little warranty, is a defeat in the classic model. In the rental model, it’s easy: the company is also responsible for maintaining its property! The product is designed to last a long time and be easily repaired, which increases the service margin.
Despite these strengths, there are still many steps that economic players should take to embrace a functional economy on a large scale.
Brake to unlock
The first psychological stage because possession is also a relationship with emotional objects rather than utilitarianism, if it can be justified at an economic or practical level. Delegating the management of capital assets to users is to make it much easier to organize the current industrial system and to enable centralized value creation. In a localized factory with an established process that makes it easy to switch to scale …
Next operational step. Sure, switching to a functional economy is not an easy task! It literally means reviewing marketing, product catalogs, and purchasing experience from top to bottom. In addition, the CFO tells us that the sale of services and products has a significant impact on corporate accounting. It needs to be completely redesigned according to the monetization unit (kilometers, kilowatt hours, water volume, hotel nights, etc.) according to the services or usage contracts on the market.
In short, it is the economy as a whole that takes into account the new social expectations of its customers and ultimately leverages and restructures the contributions of digital tools that provide a real-time customer experience. This model has long been a model for pure digital services. But the economics of this feature are also becoming the rule for all dematerialized services such as music, movies, software, and cloud computing resources.
Its application to much larger consumer goods than it is today is a clear next step. The need for a low-carbon transition, the end of planned obsolescence, the shortage of raw materials, the need to reinvent the source of local employment, the reduction of overly long international logistics chains … all new and important for economic change. It’s a discussion.
There remains a huge project on social retention and digital marketing tools for older models (the car example is very symbolic). By focusing on this change, companies can open up a new “blue sea” and attract customers, investors and employees who are increasingly concerned about the environmental impact of their business models.