Monthly Archives: December 2006

Green Votes

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Reuters examines the green trends in governments all over the world.

Just as Bill Clinton used the battle cry “It’s the economy, stupid!” to keep his 1992 presidential campaign focused, political leaders worldwide are chanting a new mantra based on growing alarm about global warming.

Mainstream parties in Germany, Britain, France, Canada, the United States and Austria believe tackling climate change is a vote winner while established Green parties in Germany and Austria are experiencing a renaissance.

“Climate change, if presented the right way, is a topic that voters are definitely opening up to,” Manfred Guellner, managing director of Germany’s Forsa polling institute, told Reuters. “We’re seeing you can score points with it

“Sustainable development and the defence of the environment is a question so fundamental that it can’t be the property of one political party, even if it’s green in colour,” the front-runner for ruling conservative UMP party told parliament.

“Showing a commitment for the environment has once again become fashionable and deemed worthy of public recognition,” said Udo Kuckartz, a University of Marburg researcher in a recent study of the public’s view for the German government.

“We haven’t seen that in a long time.”

Germany is home to the Greens party, one of the world’s most successful ecology parties which has had seven years in government. Their support has climbed from 8.1 percent in the 2005 election to around 11 percent in opinion polls.

Government intervention is important in the fight against global warming mainly because pollution is an externality and that means free markets cannot solve this issue by themselves. Green votes are the way forward.

Greening the Middle East

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The Middle East is known for its oil and Dubai for its shopping. A profile of the UAE is an example of countries from the middle east.

The United Arab Emirates (UAE) economy is mainly dependent on oil and natural gas, which accounts for around 36 per cent of gross domestic product (GDP). The UAE is currently the fourth largest producer of oil in the Organization of Exporting Petroleum Countries (OPEC) with reserves estimated at 98 billion barrels (10 per cent of the world reserves).

The region is slowly changing its attitude towards the environment. Some examples:

Organic Expo in Dubai.

THE Middle East Natural & Organic Products Expo will be almost 80 per cent bigger next year as a result of bookings confirmed when the 2006 edition ended a three-day run at Dubai’s International Exhibition Centre yesterday (Tuesday, Dec 12).

The show has already grown by 100 per cent since it was first staged in 2003, with more than 300 exhibitors from 35 countries now occupying 5,000 square metres of floor space.

“The seismic shift to natural and organic foodstuffs and medications, as well as products such as textiles, cosmetics, and cleansing agents is a worldwide phenomenon that is gaining strength virtually by the day.”

Global Links managing director Nadim Al Fuqaha added: “Middle East consumers are always among the first to adopt global trends and this is very evident in the success of this year’s expo and the projected growth for next year.”

Water Awareness in Abu Dhabi

With water scarcity being an important issue across the globe, and especially in the Arab Region, this project will help bring a much needed awareness to the younger generation in the following countries: UAE, Qatar, Sultanate of Oman, Kuwait, Hashemite Kingdom of Jordan, Egypt, Palestine, Syria, Lebanon and Tunisia. Water and awareness experts from some of these countries also attended the launch.

‘The project’s aim is get Arab youth more interested and more active when it comes to water issues in their part of the world. By providing them with the right tools, training and awareness, the project will help generate a new generation of pro-active and knowledgeable youth working towards conserving the precious resource of water,’ said H.E Majid Al Mansouri, Secretary General of EAD.

Sharjah Municipality launches ‘Bee’ah’, the biggest waste recycling company in the Arab region

A waste-recycling factory will be set up in Al Saj’ah area and will depend on the latest international technology in the recycling industry under the supervision of highly experienced specialists and technicians. The company will also set up branches in all other municipalities of the Emirate of Sharjah.

Mrs Randa Kamal Chief Executive Officer of JMS Property Development stated that: “Governments and institutions are set day after day to launch environmental programmes and projects aimed at seeking solutions as required for handling the increasing environmental issues, which our contemporary world suffer from after hving gone too far in exhausting its natural resources.

As a first stage, “Bee’ah” will collect, sort out and classify waste within the following categories: aluminium materials, plastic materials, all kinds of paper, glass and ceramic, building materials, iron and organic materials. These will be sent to the recycling factory, which will be operational by late 2008 after being completed according to the latest technical specifications under the supervision of a group of manufacturing and recycling engineers and specialists.

Even though they have arrived late, the middle-east is moving fast in this area. There are many opportunities for Green companies to exploit and make a difference in this region.

Lessons of Innovation from Nintendo Wii

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Innovation is critical in creating a sustainable society. The current industrial system need to look at the challenge of ‘sustainability’ as a design and innovation issue.

The Nintendo Wii, the new game console from Nintendo Japan has some interesting lessons for Green companies.

The Nintendo Wii is competing with XBox 360 and PlayStation 3. Both of these consoles have gone for faster processing, better graphics, bigger hard-disk, mulitple functions (like BluRay, DVDs etc). However, the Wii went on a different path.

One crucial aspect of Innovation is the need to be open inside the company to facilitate collaboration. The Nintendo team has taken this to the extreme, with the CEO of the company, Iwata, interviewing the main people behind the Wii in an open discussion.

First, the vision.

Listening to everyone here talk about Wii reminds me that the most important thing was clearly defining our vision. Even if it was a vision without a precedent.

That’s really true. Without a goal based on a concrete concept, I don’t think Wii would have become what it is today.

I really believe that we’ve come this far because of our vision. If you simply repeat the process of building up the hardware specs, then you just end up with higher costs and a larger console. I think a better approach is to have a clear vision, decide what you want to accomplish, and then work towards your goal.

Vision is very important in deciding upon the strategy of the company. Sometimes, the vision is found later on, but at some point in time, it is important to have a clear vision ahead.

Second, defying the trend in the Industry.

In the world of technology, there are so-called Roadmaps (overviews of proposed technologies/products) that are used by each industry…This may sound paradoxical, but if we had followed the existing Roadmaps we would have aimed to make it “faster and flashier.” But we could not help but ask ourselves, “How big an impact would that direction really have on our customers?” … the completed Wii, … has turned out to be something completely different from what was predicted in the mainstream technology Roadmaps.

Normally, when making new devices, companies compete with each other on the basis of “How much faster is the CPU, how much more memory is there, and how many more polygons can be displayed?” But Nintendo posed the question “How much can we decrease power consumption and maintain performance?”

To be honest, I even felt quite anxious about it. After all, it takes a lot of courage to divert from the Roadmaps. I was especially concerned when it was still not very clear to me what could be done with such a machine.

If automobiles can be used as a metaphor, our industry has always been trying to compete over horsepower, even though not all cars are made to compete in F1 races. Just as hybrid cars have created a new emphasis on “environmental performance,” I believe that Wii has also discovered new values.

Innovation through collaboration.

“Wii’s one-handed controller is not the great idea of a single person, but a fantastic fusion of ideas from all kinds of people.”

“I first asked a lot of employees for their opinions regarding the hardware.”

“We had to rely on the know-how of Nintendo’s handheld gaming device team.”

“A number of years ago I created somewhere between ten and twenty teams, each consisting of around three people. These teams were given free rein to couple a dedicated controller or peripheral with a GameCube title, and then see whether or not the end result was marketable. This project gave rise not only to the “Donkey Konga” Bongos and the “Dancing Stage Mario Mix” Action Pad, but to a number of ideas and designs that would find their way into the Wii Remote.”

And last, having the capability

Reducing power consumption is something that’s always been considered for handheld gaming devices, but this is the first time it has been thought of for a home console, isn’t it?

Yes, it is. So we had to rely on the know-how of Nintendo’s handheld gaming device team, and the cooperation of the chip manufacturer as well. We also tried to incorporate means of lowering power consumption into the entire system, and not just the IC. It felt like trying to achieve the impossible, but fortunately Nintendo has a history of knowing how to work in unfamiliar situations. A variety of techniques for quickly identifying and solving problems have been accumulated over the years, and I think this was an important factor in achieving our goals.

Innovation is not easy, but it starts in the mind!

Designing for India’s Consumers

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Lakshman from BusinessWeek on the importance of design and the diversity of the Indian consumer.

Today, India has only about a dozen design programs, compared with 241 in China. To raise the profile of design, the government is granting the National Institute of Design a much higher status within the university system. And, even more important, the government is launching an ambitious program to promote public-private partnerships between corporations and design schools.

Any number of multinationals have stumbled trying to peddle Western goods to Indians without any changes in product or packaging. But even Indian companies have committed gaffes.

At the safe deposit vault, where villagers store family jewels and land-related documents, there was no screen to shield a couple inside from prying eyes. So a woman used one end of her sari to cover her husband while he pulled out a safe deposit box.

The vastness of India can also be baffling to companies and designers looking for a focused approach. U.S. retailer Wal-Mart (WMT) may have entered India, but setting up outlets and getting mass consumers to buy from its stores will not be that easy, says San Francisco-based emerging markets strategist Niti Bhan.

“India is not one country but a conglomeration of many countries that people have to recognize,” says Bhan.

In order to reach customers in emerging countries it is important to understand the social aspects including the cultural nuances.

What Bhan says is critical. In Australia people question me to try to understand India. However, with the mention of different languages in different states, cultures, religions, urban and rural India they get confused fast.

The best way to understand India for the western world is to think of India as the European Union. The 28 states in India are almost like 10-12 different countries in terms of language, culture, economic development etc.

GreenBlue and Green Innovation

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One of the premises of this site is the entrepreneurial nature of business. Innovation plays a major role in making this come true.

Jessi Hempel from BusinessWeek explores the work of GreenBlue.

Cottrell got involved with CleanGredients, an initiative led by the GreenBlue Institute. Along with EPA representatives, academics, and other industry leaders, Cottrell tackled a challenging question: Can we build sustainability into the beginning of the design process rather than the end? Can we help our product developers to start with the right ingredients, rather than making substitutions in the final stages?

Executive Director Jason Pearson understands sustainability as an extension of the quality movement. “New metrics can feel like huge risk factors, but they are also new design opportunities,” says Pearson.

“Many of the sustainability challenges companies face are rooted in poor design—of products, services, business models, and strategy,” says Joel Makower, founder of GreenBiz.com. “GreenBlue takes a design approach to these challenges, creating tools companies can use to chart a more sustainable course.” Makower is joining the GreenBlue board in December.

The GreenBlue Institute was founded in November, 2002, to put architect William McDonough’s Cradle to Cradle principles of ecologically intelligent design into action. It was originally a project that sprang from the work of McDonough Braungart Design Chemistry, the consultancy co-founded by McDonough and German chemist Michael Braungart in 1995.

An important aspect of the problems that we are facing are due to the design of the systems in the current Industrial society. As Joel Makower notes, design is the solution to these problems.

Resources:

  • Cradle to Cradle
  • Online primer on Cradle to Cradle from GreenBlue

    • Reverse Logistics – The Business of Returns

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    In a previous post, we looked at the recylcing of currency notes to make hand-made paper. With the environmental consciousness increasing in the world, hand-made paperfrom recycled bio-degradable material will be highly valued. If this paper is transformed into useful products like paper bags or photo frames value is added and it can be sold at a higher price.

    If there is a customer demand for these products, then new businesses will form which will in turn create more avenues to process waste. Win-win for all and a new market is created.

    However, one huge problem in handling waste is collecting waste from the source and supplying it to the manfacturer for processing and production of eco-friendly products.

    This is where the business of returns kicks in.

    According to the Wikipedia:

    Reverse logistics is the logistics process of removing new or used products from their initial point in a supply chain, such as returns from consumers, over stocked inventory, or outdated merchandise and redistributing them using disposition management rules that will result in maximized value at the end of the items original useful life.

    A reverse logistics operation is considerably different from forward logistics. It must establish convenient collection points to receive the used goods from the final customer or remove assets from the supply chain so that more efficient use of inventory / material overall can be achieved. It requires packaging and storage systems that will ensure that most of the value still remaining in the used good is not lost due to careless handling. It often requires the development of a transportation mode that is compatible with existing forward logistic system.

    Reverse Logistics Animation
    Source: RevLog

    Forbes.com writes about the growing business in reverse logistics.

    A growing number of companies are finding that there‘s money to be made by sending things back.

    And that bottom line impact can be a huge one. In the U.S. alone, the cost is an annual $100 billion. So a growing number of companies have found ways to create a real business out of sending things back

    Unyson takes over the management of returned, damaged or obsolete products for clients by entering each item into their customized Web-based communication and transportation networks. This allows for full visibility of return shipments in transit, as they are sent back to a distribution center or return center for disposal or reconstitution.

    The business of returns starts when a customer, retailer, dealer or manufacturer finds something wrong with a product (outdated, spoiled, broken or flawed). This single fact should initiate a response that through appropriate automation takes care of blame, return transport, physical processing and eventual redistribution or recycling and finally compensation to the customer.

    The whole idea of reverse logistics, or returns, can be painful, time consuming and costly for all involved–manufacturer, retailer and customer.

    There has been great advances in the field of logistics or what can now be called forward logistics, similar thinking and technologies need to be incorporated into ‘reverse logistics’.

    There are many challenges facing this idea.

    Reverse logistics is, of necessity, an information technology-intensive business, says Steve Manning, vice president at Milpitas, Calif.-based electronics manufacturing services (EMS) provider Solectron and general manager of its Solectron Global Services unit. The reason? “It’s all about the data,” Manning says.

    “There are a significant number of touch points [in the reverse supply chain] that add up to a lot of cost. By not properly addressing the touch points, companies can negatively impact profitability, customer satisfaction and brand image,” Corwin explains, “so companies are getting more sophisticated in their returns approach.”

    …new environmental laws — such as the European Union’s Restriction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE) directives — are forcing companies to plan how they will retake possession of goods from end users at the end of a product’s lifecycle.

    “If I bring in a pallet of 48 comforters, I deal with all 48 at once, and the cost is spread over all the comforters,” Giovingo says, “but if a consumer brings a comforter back, all the same activity — the receiving, inspection and stock put away — now has to be performed for just one unit. You multiply that times a couple hundred or a couple thousand returns each day, and it really adds up.”

    Apart from bringing in new challenges, it provides new opportunies to cut waste, increase brand image, understand trends and manage the supply chain better.

    Update:

  • For more information, check out the International working group Reverse Logistics – RevLog
  • Cranfield University – Tools to manage reverse logistics.
  • Reverse Logistics Trade Shows
  • Reverse Logistics AssociationReverse Logistics Chart

    • “In other words, anytime money is taken from a company’s Warranty Reserve or Service Logistics budget, that is a Reverse Logistics operation” – Gailen Vick, President RLA

    Recycling currency notes in India

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    The Times of India reports that handmade paper industry is making moolah out of old, soiled currency notes by recycling them into various useful products.

    Government agencies hardly seem to be gung ho about finding alternatives the eco-friendly way. But one can’t really blame them for it you know, not after the failed attempts to ban polythene and promote paper and cloth bags!With the Reserve Bank of India (RBI) opting to use products churned out by recycling old, soiled currency notes, experts from the Khadi and Village Industries Commission (KVIC) claim avenues to rake in the moolah through the handmade paper industry are aplenty.”The response by people interested in setting up manufacturing units of handmade paper has been huge. The only hitch is shortage of raw materials like pure cotton and fibres, banana, jute fibres and other bio-degradable material. Nevertheless, entrepreneurs who have set up units are doing pretty well specially in the international market.”And with malls and retail outlets keen to go green also considering alternatives to replace plastic carry bags with hand made paper bags and pouches, it has opened up business opportunities for small scale units as well.

    As the notes are made from pure cotton fibre, they’re ideal for making file folders etc. The demand for such finished products has been phenomenal, especially in the international market. Items like gift-wrapping paper, photo frames, booklets, writing pads, carry bags and other products are being requisitioned regularly by buyers from USA, UAE and a number of European countries

    Waste is inefficiency. As environmental concerns increase, there will be more opportunities to turn waste into wealth. With the size of the Indian market there should not be any lack of raw materials but the challenges will be in creating the infrastructure for “reverse logistics”.

    Europe’s New Carbon Cuts

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    The European Union has been a pioneer in the fight against Climate Change. After ratifying the Kyoto protocol, EU has embarged on the European Trading Scheme where individual countries provide carbon allowances which can be traded by the major pollutors including power generation companies.

    The BBC reports that the Phase-II of the program for 2008-12 is tougher on the countries.

    To make the scheme effective in tackling climate change, the EU has cut member states’ carbon permits by 7% on average from 2008-2012. Germany, a major polluter, said the stricter limits were unacceptable and would push electricity prices up.The European Trading Scheme (ETS) aims to cut emissions by 8% from 1990 levels.

    Critics argue that, even with the new lower limits, the plans are unlikely to help reduce pollution and the emissions of greenhouse gases. According to Tony Ward, Energy Director at Ernst & Young,…”The move is small and is unlikely to encourage the necessary substantive behavioural change,” he said.

    Some major criticism of the scheme is that in the first phase, member countries provided a high level of allowances which increased the supply of carbon credits and decreased the price of carbon.

    New Economics and the Rise of Asia

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    Manmohan Singh, the prime minister of India, is an economist by training. His recent speech to the London School of Economics Asia Forum.

    The most important development of the 21st century will be the rise of Asia. China has already trebled its share of world GDP over the past two decades and India has doubled it. Both these giant economies of Asia are bound to regain a considerable part of their share of world GDP that they had lost during the two centuries of European colonialism. While Japan will continue to be at the top in the foreseeable future, the newly industrializing economies of East and South East Asia will also grow, even if not at rates we witnessed in the past two decades.Taken together, the rise of these Asian industrial economies will alter the balance of income distribution at the global level. This need not worry the West, since a dynamic Asia can power global growth and provide new opportunities for growth for Europe and North America.There are questions pertaining to the globalization of lifestyles, and its consequence for consumption, and their impact on the environment. Is growth sustainable if development in the developing world merely mirrors the experience of the developed? It is not just that Third World households may not be able to afford western consumption standards, our planet would not be able to do so.

    If every consumer in India and China, totaling up to almost 3 billion, want to live like people in San Francisco, Stockholm or Singapore, can they afford to? Can nature afford it? If not, how do we alter lifestyles and consumption patterns so that growth is sustainable in a more globalized world?

    I believe a new generation of economists and social scientists have to once again write and draw on blank slates, like IG’s generation did. There are no textbook solutions. There are no pet answers, no clever models. The rise of Asia, and of the developing world in general, presents us with new challenges – new intellectual challenges, new technological challenges, new organizational and political challenges.

    Liberalizing the Indian education system

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    Atanu Dey, my friend and my erstwhile boss at Deeshaa, writes about the need to liberalize the education sector in India.

    If you want to understand the problems facing India and the way to solve them, do read Atanu’s blog. His commentary and insight is the best that is available.

    I am confident that Indians are no less smart than any other group. Indians are poor because they lack freedom to act, to perform to the best of their abilities. Given the opportunity, in free societies Indians do just as well as the others. It is time for Indians to build world-class schools and universities. It is time for Indians to have real freedom from the government of India, not just the political freedom won from a colonial power over half a century ago.

    Atanu explains the need to free the market to improve quantity and quality in the education sector. A related post by him is Desperately Seeking India’s Google.