Wednesday, 27 January 2010

Good Guide: "Open Source" Product Information

Do you know what organic food products, green electricity, good weave rugs, and healthy stuff toys have in common? All of these products possess so-called "credence qualities", which are difficult to verify. Unlike the price or the design of products we as consumers cannot check these kinds of qualities – neither before nor after the purchase. Generally, we do not know:

• how organic food is produced and processed;
• what the sources of green electricity are;
• whether the weaving of rugs involves child labour; and
• what kind of chemicals are included in everyday products.

In these instances we have to rely on information provided by producers or independent third parties. Since many social and ecological product qualities are credence qualities, transparency is essential. "Good guide" is a social enterprise which seeks to provide reliable, instant and easy to use information on the health, environmental and social impacts of products. It all started a few years ago, when Dara O’Rourke put sunscreen on his five-year old daughter Minju before she went outside to play in the summer sun. The thought occurred to him: "What’s really in this stuff?" So, being a Professor at the University of California-Berkeley, Dara researched the sunscreen. What he found was surprising and disturbing: the sunscreen he’d been putting on Minju for years had toxic ingredients. That was a daunting moment, when Dara realized how little we know about the products we bring into our homes every day. He decided to do something about it and provide product information as an "open source". He brought both academic and technology experts together to develop a "For Benefit" start-up at the forefront of integrating science and technology. The (preliminary) result is the (beta version of) "Good Guide", which seeks to provide consumers with credible information regarding impacts of food and non-food products. On health. On the natural environment. On society. The certified "B" company wants to deliver this kind of information whenever and wherever consumers need it. They provide it on the web and via a new iPhone app, which allows consumers to scan the barcode of products and obtain health, environmental, and social ratings for a great variety of products.

The small Good Guide team scored approximately 100,000 products with data from nearly 200 sources, including government databases, studies by nonprofits and academics, and their own research. This is a great endeavour and visionary idea, which might change the marketplace in the future. In a New York Times article Dara O’Rourke is quoted saying: "What we’re trying to do is flip the whole marketing world on its head. Instead of companies telling you what to believe, customers are making the statements to the marketers about what they care about."
Until then, it is still a long way. Obviously, the scanning of the bar codes with the iPhone app does not function outside North America. We scanned a number of leading brand products in our households in Canada, Germany and Great Britain, but it does not seem to work there (yet). In addition, the scoring model of the three dimensions is not (fully) transparent and the scores tend to be somewhere in the middle, making it difficult for consumers to compare and decide between two or more product alternatives. To fill these gaps, increase the transparency, and to win over a critical mass of consumers we would like to suggest opening up the process of information gathering and assessing. Why not use the "wisdom of crowds" and involve a large number of consumer organizations and consumers from all over the world to gather information, discuss sustainability issues related to products, and have regular votes on the health, environmental, and social dimensions?

Wednesday, 20 January 2010

Avatar's Third Dimension: Peoples, Profits and 'Progress'

During the past two weeks we, like thousands of other people worldwide, went to see the film Avatar and were both blown away by the beautiful realization of the world of Pandora in which the film is set. It is a movie that seems to be generating more than just record-breaking ticket sales, Golden Globe nominations and Oscar tips. Given the nature of the film and its eco-centric message, it has unsurprisingly generated some controversy.

The American right have railed against its anti-American message. Nile Gardiner of the Telegraph describes the movie as "a cynical and deeply unpatriotic propaganda piece, aimed squarely against American global power and the projection of US economic and military might across the world". Similarly the Vatican was strongly critical of its artistic merits, although it is hard not to think they were actually put out by the fact that an imagined people on a distant planet in a distant future were following a religion of their own which was not Catholicism. Perhaps more strangely there are growing reports of depression linked to watching Avatar amongst people unable to cope with re-entry from Pandora into the real world, and the realisation that they were not one of the Na´vi people living in harmony with nature. This has all the makings of a classic urban myth, but has helped to keep the movie making headlines.
Perhaps the funniest contribution to the debate about Avatar comes in the form of a claim from Matt Bateman that it is really a remake of Disney’s Pocahontas. Although the Pocahontas reference is a humorous one, it highlights a message in the film that has rather been overshadowed by the controversies about religion, anti-Americanism and the parallels with the Iraq war.

The film revisits a story that is also part of America’s past (a past in which America was Pandora), and one that has been played out across our World for hundreds of years, in which the interests of the indigenous people of a place are swept aside by the mineral and material demands of a more 'developed' people from somewhere else. One of the themes of Avatar is that the Na´Vi do not want anything those after the mineral deposits can offer, they do not want their technologies or their products, they just want to continue with their traditional way of life. Avatar provides a rather idealised and romanticised view of the lives of an indigenous people, but there is a growing realisation that the traditional lifestyles of indigenous peoples are often remarkably sustainable and resilient, until of course they encounter the germs or the guns of more developed peoples. This poses some interesting questions about whether industrialised economies can learn any sustainability lessons from indigenous peoples and lifestyles, a theme explored by David Maybury-Lewis’s excellent book 'Millennium'.
The UN estimates that there are some 370 million indigenous peoples throughout the world, many still living relatively traditional lives and many with livelihoods that depend very directly on ecosystem services. In many ways they are amongst those most at risk from the impacts of unsustainable development, and are often the most overlooked group in discussions about sustainability marketing. Their dependence on the natural environment means that in many regions they live largely outside the consumer economy, and although many of them are impoverished, this is not because of a lack of economic development, but more accurately because economic development has often disrupted traditional livelihoods and relationships with the environment. As Ted Moses, Grand Chief of the Crees said in testimony to the UN: "I am not against development, but would like you to know that indigenous people know development primarily as victims of development".
Although the rights of indigenous peoples were recognised in the 2007 UN Declaration on the Rights of Indigenous Peoples, the clash of worlds depicted in Avatar continues on a daily basis on planet Earth. This is an issue which is close to the interests of BRASS researchers who have been conduction research on the relationships between mining companies and local communities affected by mineral extraction in Latin America, Africa and Russia. It is a subject where there are few simple answers, but where there will be many future difficult questions to tackle. The pressure for land and resources will only become more intense with a growing world population and expanding material expectations.
Whether the world can live up to the sentiments of the UN's declaration and protect the rights of indigenous peoples in the face of growing pressure on land and resources remains to be seen. Bringing the plight of indigenous peoples to life in breath-takingly vivid three-dimensional splendour might just encourage consumers in industrialised countries to spare a thought for those people who get in the way during the struggle to obtain the resources that our consumer economies depend upon.

Tuesday, 12 January 2010

Sustainable Design and Marketing: Crossing the Chasm

Guest Post by Prof. Dominik Walcher
Salzburg University of Applied Sciences (Austria)

Sustainable design has become recognized as a basic element of good design in higher education over the last couple of years. The Industrial Society of Designers (IDSA) provides an overview of academic programmes, which focus on sustainable design. However, it can be observed that there is still a distinct separation between design education and marketing education. Understanding innovation as “invention + commercialization” it is clear that design education puts an emphasis on invention whereas marketing is perceived as responsible for the “rest”. This fundamental separation of disciplines can be seen as the main driver for developing different mindsets and cultures leading to inefficiencies within businesses. The School of Design and Product Management (DPM) at Salzburg University of Applied Sciences was founded to bridge this chasm. First, students are trained in design as well as in product management and marketing. In addition to that, sustainability marketing is offered as an obligatory course at the advanced level. All DPM design projects and presentations can be divided into four parts:
(1) the customer solution (product, service or hybrid, USP, benefits etc.);
(2) the marketing plan (strategy, market research, targeting, segmenting, positioning, communication, customer cost, etc.)
(3) sustainability plan (materials, system architecture, technology, production, procurement, ecological issues, social issues, end-of-life treatment, convenience, total cost of ownership, communication etc.);
(4) financial plan (design, production, distribution and marketing costs etc.).
There are a number of DPM projects considerings social and environmental aspects:

Lebensdesign is a co-branding of Lebenshilfe, an organization of disabled people in Salzburg, and Porsche Design. The students, in cooperation with Porsche, design several objects, which can be produced in the Lebenshilfe studios and are labeled with “Lebensdesign”. The product architectures are mostly modular and apply biodegradable materials, such as wood or organic fabric, or reused materials. Moreover the students develop the co-branding system as well as the marketing plan to reach a high level of consistency in sustainable design and appearance.

In another project students reuse/upcycle materials to create products (e.g. a bag made out of used motorbike tires) and develop appropriate marketing plans for them. In his final project one student, a trained stonecutter, pointed out the design drawback of tombstones, nearly all of which sold in Germany and Austria originate from Brazil, Africa or China, and are treated in India (under un-controlled working conditions) before being shipped to Europe. After an intensive choice-based conjoint analysis involving over a hundred participants, he has now developed a modular tomb stone system made of local material. As part of a shoe venture start–up, students developed marketing and business plans for a sustainable modular shoe system and for biodegradable shoes made of bio-polymers.

Regularly the Chamber of Commerce and the Business Creation Center Salzburg (a business incubator) are invited to the final presentations. Last year two teams got funding which enable the students to establish their own companies (e.g. In Foro - Möbelmanufaktur). One idea was a technical chair system aiding older or disabled people when standing up and the other was a heatable outdoor lounge seat to replace the energy intensive outdoor umbrella style of heater (40 Watt vs. 2000 Watt).
The aim for the coming years is to intensify and extend the sustainable projects and lectures in sustainability marketing for the existing bachelor’s program and especially in the master’s program which has just started this semester.

Wednesday, 6 January 2010

Sustainability Innovations: A Typology

Sustainability innovations and sustainability marketing are like twin brothers. One cannot do without the other. Simply put: When sustainability marketing is about the marketing of sustainable products and services, sustainability innovations is about developing them.
How "sustainable" is sustainability marketing without new inventions? And what is the value of sustainability inventions, if they are not adopted by users? Sustainability marketing has to make sure: that novel sustainable products and services solve customer problems, and satisfy customer needs; that they are communicated in a credible way; that it is convenient for customers to adopt them; and that the total customer cost of sustainable solutions are taken into account.
We define sustainable solutions as offerings that satisfy customer needs and significantly improve the social and environmental performance along the whole life cycle in comparison to conventional or competing offers (Belz and Peattie 2009, p. 154). Sustainable products and services are not absolute measures, but are dependent on the state of knowledge, the latest technologies, political and societal aspirations, which change over time. A product or service that meets customer needs and that has an extraordinary social and environmental performance today may be considered standard tomorrow. Thus, sustainable products and services have to be continuously improved regarding customer, social and environmental performances, making innovations inevitable. These kinds of innovations may be incremental or radical in nature. Based on the novelty of knowledge, and the novelty of the application of that knowledge, we can differentiate between four different types of sustainability innovations (Tidd and Bessant 2009, pp. 581-583).

Exhibit: A Typology of Sustainability Innovations

The first type of innovations focuses on the improvement of existing products and services with regard to environmental and social performance. The increase of fuel efficiency of cars is a good example for this kind of innovation (e.g. BMW Efficient Dynamics). Making toy products safe and healthy for kids and producing them under acceptable social conditions is another.
The second type of innovations represents alternative technologies to existing problems. Growing social and political pressure over vehicle emissions and their regulation have forced the automobile industry to reconsider the dominant design based around the Otto motor, a gasoline or diesel-fuelled combustion engine. Car companies all over the world are active in the search for alternative technologies such as fuel cell and electric cars (Pilkington and Dyerson 2004). Toyota is the innovation leader when it comes to hybrid-electric cars (e.g. Prius), gaining competitive advantages. An alternative technology in the area of food packaging is bioplastics, which stems from renewable resources and biodegrades after use.
The third type of innovations applies existing knowledge to new market areas. Car sharing is a good example for offering mobility without car ownership (e.g. zipcar and Mobility CarSharing). The novel service combines existing technologies such as cars, electric customer cards, and online services to offer mobility solutions which are cost-efficient, and convenient for an increasing number of customers. A different example for the application of existing knowledge in new areas is the Base of the Pyramid (Prahalad 2005). Often a new configuration of existing technologies helps serving this market segment with quality products at a low price (e.g. washing detergents and shampoos in single sachets).
The forth type of innovation is probably the most fundamental contribution to sustainable development. Berkhout and Green (2002) argue that the literature on innovation management and sustainability is too focused on firms, supply chains, and specific technologies. They suggest broadening this point of view and focussing on socio-technological systems or regimes, where developers and users interact, and where many actors are involved in the process of sustainability innovations. Examples would be: sustainable mobility systems, which apply complementary modes of transportation (e.g. electric bikes, electric cars, and public transportation); and sustainable energy systems, which are based on different sources of renewable energies. Such innovations require changes in energy pricing and regulation, an infrastructure to allow the sale of energy back to the grid, and new skills and services they typically evolve by a combination of top-down policy, and bottom-up social change and firm behaviour over a (long) period of time.