In today’s world, technology helps us turn resources into products more affordably and quickly than ever before. But after these products are used, they’re discarded and ultimately end up in landfills or are incinerated.
Not only does this linear economy harm our planet, it wastes the resources, time, and money that went into earlier stages of the products’ lifecycles. A circular economy asks: How might we design waste and pollution out of the value chain, keep products and materials in use, and regenerate our natural systems? OpenIDEO—IDEO's open innovation practice—is working to improve access to the funders, networks, and design tools that circular innovators need. Our goal is to create regenerative products, services, and systems, and provide shared value for society and the environment.
If you’re thinking, “Easier said than done,” you’re right. The circular economy is a new, experimental field with no proven path. It requires comfort with ambiguity, a commitment to taking risks and failing, and relentless optimism. As we work alongside partners and innovators, we’ve identified three insights that we hope will inspire changemakers dedicated to driving a circular future.
We need systems that allow us to experiment—quickly
We no longer have the luxury of time, given the state of the planet and population. One billion people are undernourished globally, yet up to 35 percent of food in high-income economies is discarded every year. By 2050, there will be more plastic in the ocean than fish. Circular innovations that reduce food and plastic waste can certainly help, but it’s critical to adopt models and approaches that enable rapid learning and development.
Traditional in-house research and development (R&D) takes years, not to mention tremendous human and financial capital. When exploring emerging fields like the circular economy, some leaders are hesitant to invest in what’s experimental and ambiguous—and therefore risky—even though it’s the “right thing to do.”
Open innovation offers a contrast to the current R&D process that often struggles to quickly shepherd solutions that address today’s urgent needs. Forward-thinking and mission-driven organizations can use open innovation challenges to source delivery methods, models, material approaches, and brand new ways to approach circular economy opportunities like textile waste, plastic pollution, and food waste both rapidly and cost-effectively.
The Circular Design Challenge sponsored by the Ellen MacArthur Foundation asked, “How might we get products to people without generating plastic waste?” The Challenge called for designs that avoid generating small-format plastic packaging waste like sachets, wrappers, straws, and lids. These make up 10 percent of all plastic packaging, but their size makes them prone to escaping recycling collection systems and ending up in the environment.
In one month, the Challenge sourced over 600 ideas from around the world. These included edible and biodegradable seaweed packaging and vending machines that distribute staples like sugar and rice that can be taken home in reusable containers. Open innovation challenges can generate and test a larger quantity of ideas at a more reasonable cost than standard R&D. Most importantly, they can do this within a time frame that corresponds to the urgency of climate change. These challenges help sponsor organizations like the Ellen MacArthur Foundation or for-profit companies like McDonald’s and Starbucks establish micro-markets for new products in the circular space at an unprecedented pace.
Reimagining systems requires global cooperation and collaboration
An open innovation approach or challenge alone doesn’t enable speed. In order to quickly source ideas, the model must be designed with various stakeholders’ needs in mind, strengthened by a diverse and far-reaching community, and built with collaboration as an underlying principle.
When established companies, entrepreneurs, and experts are working together in an open innovation model, the right conditions can be designed to incentivize and inspire game-changing innovations—from emerging ideas to profitable and investable businesses. The Circular Design Challenge offered a $1M Grand Prize and access to partner companies like PepsiCo, Nestle, Veolia, and Marks & Spencer, as well as plastics manufacturers and recycling experts to offer support. While sponsors are enticed by the rapid flow and sourcing of innovative ideas, they are also eager to learn from and be inspired by cutting-edge technologies and models that will inform—and transform—the next 25 years of the industry.
Additionally, open innovation programs that have global reach influence the breadth and diversity of ideas. When ideas are tapped from a global marketplace—versus within an organization—they can propel and expand a company’s thinking in ways they likely could not achieve in isolation. During one month, the Circular Design Challenge hosted 65 events in 22 countries by leveraging OpenIDEO’s highly-connected community around the world. Key insights were then shared with the broader community of Challenge innovators and used to improve solutions, create new ones, or guide the sponsor companies’ development strategies.
Many philanthropic challenge programs currently operate as closed request for proposals (RFPs). To drive circular change, it’s critical to open the opaque nature of this model and prioritize collaboration and transparency. Open innovation challenges and platforms enable innovators, sponsors, and other actors to learn about and build on others’ ideas, connect with each other, and even create cross-regional relationships and teams. Circular solutions can’t scale if the needs of an entire system aren’t considered, and we can’t achieve worldwide impact unless solutions function across regions and serve diverse populations.
To drive circular change, look beyond cookie-cutter frameworks
If we want to foster a circular economy, we need to think beyond sourcing. Procured innovations must be implemented and piloted and scaled locally, regionally, and globally to drive progress. Open innovation programs offer the ideal springboard for these critical next phases because they facilitate a deep understanding of an entire ecosystem and a top-to-bottom value chain.
To push beyond procurement and towards market-readiness, the NextGen Circular Business Accelerator launched in 2019. The goal of the six-month program is to support and launch a selection of the NextGen Challenge winners who submitted top ideas for a next-generation fiber cup that’s recoverable on a global scale. The Challenge was part of the NextGen Consortium, a global initiative convened by Closed Loop Partners’ Center for the Circular Economy and founding members Starbucks and McDonald’s.
With an emphasis on rapid and iterative building, Accelerator teams are guided through five phases and seek to progress from a minimum viable product (MVP) to a manufacture-ready prototype. During the Pilot phase, teams will prototype in live markets to better understand the implications their products have on the end supply chain.
Rather than using a cookie-cutter accelerator approach—which guides a startup cohort through the same activities—this bespoke program addresses the unique requirements each circular startup needs in order to achieve market success, such as recoverability, circular supply chains, cost and scale, and product performance standards.
Participating startups include a plastic-free, recyclable, and compostable cupstock that can be processed into cups, a returnable cup ecosystem, and cups made from plant-based materials. Given this product diversity, each startup requires highly individualized support.
The Accelerator also serves as a bridge between sponsor companies, like Starbucks and McDonald’s, and the participating startups. While the sponsor companies are hoping to learn from or incubate these cup innovations, the startups are trying to hone their product-market fit to match the needs of the powerful brands that can help them scale. When Starbucks announced that it will pilot and test recyclable and compostable cups in key markets, this bridge became a reality through the Accelerator program.
By keeping these learnings in mind, we’re hopeful that the power of open innovation can move us closer to a waste-free future. And if recent world events have proven anything, it’s that we must act quickly, but not without collaborating or reaching beyond the boundaries of our own organizations and regions. We must also reach beyond sourcing. If we’re dedicated to implementing circular solutions that will change the world, they must be supported by an equally innovative approach to acceleration, testing, and piloting.
The circular economy is a new field. We’re still finding our way and learning how to keep these mindsets in balance. Yet we’re determined to enable actors around the world—companies, foundations, innovators, startups, and others—to join us in creating a more circular world together.