‘Degrowth’ inspires business model innovation for a sustainable post-COVID economy

The COVID-19 pandemic, throughout which firms all over the world are being compelled to rethink their methods of doing enterprise, requires fascinated about post-crisis enterprise fashions for sustainability, together with the idea of degrowth (taking the main target away from financial development and into high quality of life), Florian Lüdeke-Freund and Tobias Froese introduce enterprise mannequin innovation, mixed with sustainability paradigms reminiscent of degrowth, as a promising contribution to an innovation and administration toolbox for a post-crisis financial system.

The world faces an unprecedented disaster as a result of international unfold of the SARS-CoV-2 virus. A disaster that creates new financial calls for and places firms’ resilience to the take a look at. Many are compelled to innovate and even rework themselves to outlive. This opens the door to new methods of doing enterprise – however does it additionally open a door to a greater, extra sustainable post-crisis financial system?

A post-crisis financial system that’s extra ecologically sustainable and socially simply should construct on organisations and networks that create worth for and with their stakeholders while additionally defending their pure surroundings. To take action, their enterprise fashions should observe sustainability rules reminiscent of circularity, inclusiveness, native and inexperienced provide chains, or sufficiency (Lüdeke-Freund et al., 2018, 2019b). Specifically, current debates have launched ‘degrowth’ as a normative framing for such sustainability-oriented transformations of firms, industries, and nationwide economies (Kallis et al., 2018). We argue that the present scenario, during which firms all over the world are compelled to rethink their methods of doing enterprise, along with the notion of degrowth, can encourage fascinated about post-crisis enterprise fashions for sustainability.

Sustainable degrowth is a transformative quest in direction of a extra equitable socio-economic setting, in addition to an affordable degree of financial throughput that, taken collectively, enhance the standard of life whereas respecting planetary boundaries (Kallis et al., 2018). Analysis on degrowth highlights what is commonly ignored: our financial system consists of native sharing, repairing and self-provision, unpaid household care, and lots of different non-commodified actions. This comprehension of financial actions past merely financial and reciprocal transactions is crucial so as to think about, creatively experiment with, and implement new options to urgent sustainability challenges.

In mild of a degrowth imaginative and prescient, governments, civil society actors and companies can rethink their approaches to doing enterprise and use sustainability paradigms reminiscent of circularity or sufficiency as an inspiration for reviving and redesigning enterprise exercise throughout and after the disaster. The query then is: The best way to seize and develop data about alternate options to present financial fashions that facilitates speaking, collectively ideating, and realizing enterprise mannequin improvements for sustainability?

Sustainable enterprise mannequin innovation might be understood as a approach of translating sustainability methods into actionable ‘blueprints’ of value-creating actions of firms. Primarily based on a decade of analysis on this matter, we outline this strategy as follows (cf. Lüdeke-Freund et al., 2019b): sustainable enterprise mannequin innovation improves an organization’s capacity to create, keep, or regenerate pure, social, and financial capital past its organisational boundaries by altering the worth proposition for its prospects and all different stakeholders and/or the way in which worth is created, delivered, and captured.

To those ends, the idea of enterprise mannequin patterns provides a heuristic machine to systematically seize data of experience-based finest follow options for sustainability. Constructing on Christopher Alexander’s conception of patterns (Alexander et al., 1977), a sustainable enterprise mannequin sample “describes an ecological, social, and/or financial downside that arises when an organisation goals to create worth, and it describes the core of an answer to this downside that may be repeatedly utilized in a large number of how, conditions, contexts, and domains. A sustainable enterprise mannequin sample additionally describes the design rules, value-creating actions, and their preparations which are required to offer a helpful downside–answer mixture” (Lüdeke-Freund et al., 2018, p. 148).

Concrete instance

To provide a short illustration, a concrete and new sample we suggest is ‘group presumption.’ In analysis on degrowth, Bloemmen et al. (2015), as an example, current a corresponding case of community-supported agriculture. The sample takes place in a socio-economic context during which residents are thought of as mere shoppers of what firms produce, whereas intermediaries, reminiscent of grocery store chains, are positioned in between these two events. The downside is that this type of financial relation and follow doesn’t convey non-material and non-monetary types of worth creation. It disconnects shoppers from the situations of manufacturing. Moreover, it places producers in fierce competitors with one another and, therefore, makes the person weak to poor native situations (e.g., a dry season). A answer then is to share the danger with native residents who pay a set yearly quantity, no matter how profitable the manufacturing is. Furthermore, native residents interact in native manufacturing or harvesting, construct social connections, expertise mutual studying processes, and spend leisure time, as an example, in a inexperienced surroundings. Therefore, financial relationships are diversified, financial exchanges are, to a sure diploma, deprioritized, and shoppers finally flip into ‘group prosumers.’ This reduces producers’ workload and frees up time to put money into the standard of organisational processes.

A broad data base in regards to the kinds sustainable enterprise mannequin innovation can take has been developed in a number of analysis initiatives, partly performed at ESCP (Lüdeke-Freund et al., 2018, 2019a, 2019b, 2019c). This data base can function a supply of inspiration and a instrument to assist firms develop higher post-crisis enterprise fashions. Other than that, enterprise mannequin patterns can operate as empowering communicative units as they make skilled data comprehensible and helpful for laymen. This will basically contribute to creating enterprise mannequin design processes extra democratic and inclusive. Furthermore, accumulating, discussing, and sharing patterns can tremendously contribute to the perceived and precise range of our financial system.

Outlook

The coronavirus pandemic as soon as once more raises essential questions on how we collectively wish to overcome crises, and the place we wish to go. Governments, academic establishments, consultants, native companies, and additional actors who form our society ought to rethink what post-crisis economies and companies ought to appear to be and whether or not enterprise as standard is an affordable solution to transfer on, or whether or not classes might be learnt from those that are already experimenting with different enterprise paradigms. The mandatory actionable data is on the market in numerous repositories of sustainable enterprise mannequin patterns. The instance of a enterprise mannequin sample for degrowth factors to the wealthy avenues and inspiration this sustainability paradigm can supply within the seek for sustainable enterprise fashions for a post-crisis financial system.

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