Functional Economy: A New Way for a

« Sustainable Degrowth ? »

Jacques Lauriol.

Professor Rouen Business School.

2nd Conference on Economic Degrowth.

Barcelona: 26th-29th March 2010.

Sustainable Development

• How to deal with strong critics?

(environmental damage, social and economic inequalities,…)

• New directions for a development that

« takes care » // creating value?

Functional economy : An Economic Model

New strategies and Challenges

Functional Economy

Manufacturing

Resources Base Utilization WasteMaterials

RepairRe-use

Recycling

: Functional Economy: a “Double loop” operation (Stahel. 2003)

Optimize the use of assets and services

Create a usage value

Minimize ressources and energy required

An example : The Michelin Case

A new offer: « Tyre solutions » for kms coverage

Michelin Fleet Solution

Preventive management:

• Reduce tyre wear

• Fuel saving by technical Innovation (« Energy »)

• Increased life (X‟one)

• Wear Management (Safety)

First « loop »:

• Re-treating

• Remoulding

Second « loop »

Recycling « ALIAPUR »

• A worldwide Company with competitors

(Collect wastes and valorisation)

- Fuel Saving : 12% - Increase life (2-5) 24 tyres // 64- Safety

A New Economic Model(How to Create Value and Revenue)

Resources / Skills

Supply of products Organisation ofand services Value Chain and

network

Revenues Charges

Margin

Service Economy // Industrial

(intangibility, inseparability, « perishable », co-production and the question of property rights)

New challenges

New Challenges

• Strategic Level (Business Model)

Which offer? Solution

How to organize the production

(Value Chain and Value Network)

Management of Change = How to develop

an organization « services oriented »

• Marketing level : A new transaction (relational)

- Service : co-conception? Co-production

- A social link (?) vs Commercial transaction

- Towards New Communities??

- How to Educate the Client (Sustainable use // cession)?

New Challenges

• The main question : Organisation

Functional Economy:

Cooperative strategies to develop and produce a proposal

Heightened localisation or multi-localisation

= proximities with client (geographic, relational)

And a network or a Service Ecosystem

To design the offer, to sell it

Through the coordination of partners (suppliers,

complementers) to produce and to distribute

• A provider « Keystone » (Michelin)

• Partners to mobilize skills and resources

• Competitors (Aliapur) and stakeholders

Clients /Users

ComplementersPrescribers

Suppliers

Reference offer

(Provider)

Competitors / Partners

Infrastructure

Regulatory authorities

Stakeholders

A Service Ecosystem

„A system that contains a large number of loosely coupled (interconnected)

actors who depend on each other to ensure the overall effectiveness of the

system‟ (Iansiti and al. 2003)

Collective strategies (coopetition)

A „keystone‟

Interdependent elements „loosely coupled‟ (Orton-Weick 1990)

Geographic and organizational proximities

Interdependencies contents (identity, learnings,…)

A coordination device

Towards New Institutional Challenges(Degrowth Field )

Functional economy: A « New » Economy?

- Double loop. A Relational Offer

- Economic Model and « New » Forms of Organization

and the question: How to Educate the client?

A New Institutional Space?(Degrowth Practices ??)

- „Consumption conventions ‟ (property // use and care)

- Strategy and Sustainable Development

- New regulations (Public Policies? New Incentives?...)

A Great Potential for Innovations for a “Sustainable Degrowth”