The Netherlands is globally seen as a county of innovation, willfulness and entrepreneurship. There is a tremendous opportunity to strengthen this reputation. The country can play a major role in one of the most challenging transitions of the decade: the Netherlands as a circular hotspot.

Z.K.H. Prins Carlos de Bourbon de Parme, Peter Gersen // INSID Guido Braam, Bas Jongerius // Circle Economy

The NeTherlaNds as a circular hoTspoT

3

The Netherlands as a circular hotspot. It is

necessary, it is promising and it will inspire and

connect the people of the Netherlands. A region

in the world where the first concrete steps are

taken towards a circular economy, a country with

the most innovative examples in this direction, a

living lab as a role model for rest of the world, a

leading position that benefits the Dutch economy

and society.

conversations and discussions with a large

number of Dutch and international decision

makers and visionaries about why and how the

Netherlands could grow into a circular hotspot.

The dialogues will result in a widely supported

vision on this topic.

This document serves as the basis and starting

point for the discussions.

This introduction consecutively describes the

concept of the circular economy, why both

national and international interest in the concept

is growing rapidly, why the Netherlands has a

good starting position and what it means to be

seen worldwide as a circular hotspot.

In 2015, Circle Economy and Prince Carlos de

Bourbon de Parme (INSID) will engage in

iNTroducTioN

4

A ‘take-make-waste’ model characterizes our

current economy: material is extracted from the

ground at a high rate, transformed into a product

and thrown away. It is a ‘linear’ system. With the

current knowledge about resource scarcity and

energy usage, we know that this system is finite.

Resources and materials are wasted on a large

scale.

“In the circular economy products and materials

are reused and the value of resources retained.

”A ‘circular economy’ is based on a regenerative

system. Infinite reuse of resources is the norm,

without the expense of economic growth.

Four BaSIC PrINCIPlES aPPly IN a

CIrCular ECoNomy:

1. In theory materials are cycled infinitely*

2. resources are used to generate value

(not solely financial value)

3. all energy is derived from renewable sources

4. Human activities support:

• ecosystems and the rebuilding of

natural capital

• cohesion within society and between

different cultures

• human health and happiness

“The circular economy concept decouples growth and prosperity from the use of natural

resources and ecosystems”

* In generally only recycling is considered when

talking about reuse. Recycling, however, is just

one option in stimulating circularity.

All kinds of complementary forms of enhanced

(re)use of resources exist:

Hence, the circular economy encompasses more

than just recycling and in many cases produces

a positive business case. For the first time

sustainability thinking and business success go

hand in hand. This has created a huge buzz around

the circular economy among governments and

companies.

WhaT is The circular ecoNomy?

reuserepairrefurbishmeNTremaNufacTure

5

Why The iNTeresT iN circular ecoNomy is groWiNgDuring the past decades focus on sustainability

increased dramatically, both politically, in business

and on the consumer level. Circular economy

is the logical and more hands-on approach to

sustainability thinking and doing. Besides a clear

link to cost reduction, the principles of a circular

economy have an even stronger link to value

creation (regardless of financial value) and

innovations at system level (see graph on this

page). Several drivers stimulate the transition

towards a circular economy and cause the

concept’s popularity.

THE Four moST ImPorTaNT DrIvErS arE:

1. a positive business case

2. Dependence on the import of resources

3. Climate change and the limits of natural capital

4. New innovative opportunities

1. a PoSITIvE BuSINESS CaSE

Calculations by consultancy firm McKinsey for

the Ellen McArthur Foundation indicate that

a circular economy can lead to earnings of

$340-630 billion per year in Europe alone. This

is 4% of the European GDP. An analysis of TNO

concludes that a circular economy could deliver

earnings of € 7.4 billion per year and the creation

of 54,000 new jobs2 in the Netherlands alone.

ENvIroNEmENTal FoCuS

ComPaNy maTurITy

SuSTaINaBIlITy FoCuS

rISK ComPlIaNCE CoST rEDuCTIoN

ECo- EFFICIENCy

SySTEmS lEvEl INNovaTIoN

valuE CrEaTIoN

circular focus

6

2. DEPENDENCE oN THE ImPorT oF rESourCESIn addition to a positive business case, there is a

specific need in Europe and the Netherlands to

put the transition towards the circular economy

in motion. Europe imports 60% of the raw

materials it needs. According to the Central

Bureau for Statistics, the Netherlands is for 68%

dependent on raw materials from abroad3.

On behalf of the Ministry of Economic Affairs,

TNO recently investigated key raw materials for

the Dutch economy, revealing its vulnerability4.

The Netherlands is highly dependent on the

rest of the world for its material needs. For

example, China controls 90% of the rare earth

metals. Due to increasing global demand, scarce

non-renewables are mined at a staggering

pace. The mines become exhausted quickly.

Numerous estimates exist on when copper runs

out and when phosphorus won’t be available

anymore. The world in general and the Dutch

in specific increasingly depend on increasingly

scarce raw materials.

BIomaSS

mlD KG120

100

80

60

40

20

FoSSIl FuElS mETalS mINEralS

Dutch rescource demand

resource imports for domestic demand

7

3. ClImaTE CHaNGE aND THE lImITS oF

NaTural CaPITal

‘Limits to Growth’ is a publication of the Club

of Rome5 that already showed the limits of

our current system back in 1972. Currently, the

Stockholm Resilience Centre6 indicates which

planetary boundaries humanity has crossed

or is close to crossing. Many of these danger

zones pose a substantial threat to the survival

of the current global ecosystem, including

mankind itself. The Netherlands is particularly

vulnerable to climate change and its parallels

to rising sea level7. Besides, the Netherlands

knows the limits of its own natural capital.

Although the country is expected to be able to

export gas for the next ten years, meeting the

domestic energy demand through nationally

extracted gas is not a tenable scenario8.

Central to the concept of the circular economy

is to decouple growth from resource needs

in order to sustain natural capital.

4. NEw INNovaTIvE oPPorTuNITIES

Entrepreneurs see opportunities in problems.

Resolving (societal) issues is second nature

to an entrepreneur. The challenges society

faces are now greater than ever, and similarly

therefore the opportunities for entrepreneurs.

Solutions for future shortages of food, water,

energy and resources are considered holy

grails. New solutions require new approach to

business. A focus on value chain innovations

has spurred an explosive growth of new

revenue models in the past decade: from

sharing platforms like Peerby, to upcycling

business models as Blackbear Carbon’s.

“ Entrepreneurs are the ones filling the gaps and failures of society”

- Michael Porter

8

Seen from different perspectives the Netherlands

has a logical and legitimate position to realize its

“circular hotspot’ ambition:

GEoGraPHIC

The population density in the Netherlands is

remarkably high. The average use of land for

cities and infrastructure worldwide is 0.5%, in

the Netherlands however 18% of the land is

used for this purpose. Despite the scarcity of

land, the rapport “Vergroenen en verdienen”9

of the Netherlands Environmental Assessment

Agency (PBL) shows that the Netherlands is a

major player on the worldwide food market.

Not surprisingly, 68% of the land is in use for

cattle ranching and agriculture, versus a global

average of 33%. Optimizing the value from

the limited land available requires continuous

innovation. For this reason, implementing circular

thinking to spatial planning is a logical step in

the Netherlands.

Its advanced infrastructure and its central

location in Europe have made the Netherlands

into a hub for material and waste streams.

Relative to the size of the country, a dis-

proportionate amount of resources is imported.

Logistics will play an even more important role

in a circular economy, as represented by the

opportunities in reverse logistics (see the

RLI report “Dutch Logistics 2040 - designed to

last”10. The Netherlands is uniquely positioned

to recover resources from waste streams.

CulTural

Due to their open entrepreneurial business

sense, Dutch entrepreneurs are found all over

the world. IMF11 ranks the Netherlands first in

recent years on direct foreign investments.

Additionally, the Dutch government is making

major progress since 2014 in facilitating

ambitious start-ups on a National level12.

By making the Netherlands more attractive

for startups, more room is created for bottom-

up innovation. The Netherlands therefore is

increasingly attractive as a laboratory for circular

initiatives. Dutch governmental policy in this

direction has already paid off: Dutch start-ups

managed to raise a total of half a billion euros of

foreign investors’ money in 201414.

Many foreign organizations enter the European

market through a test period in the Netherlands.

Like stated, the Netherlands is world leader in

direct foreign investments. Oppositely, figures

from the IMF show that foreign investments in

the Netherlands also belong to the world top,

portraying the strength of the open business

culture of the Dutch. An average Dutchman

is adaptive and open to change and new

technology. The Global Competitiveness Index

of the World Economic Forum 2014-201515

ranks the Netherlands ninth when it comes

to ‘technological readiness’. This willingness

to change is crucial in the transforming the

economy.

Historically, the Dutch acknowledge the necessity

for collaboration: informal collaboration through-

out all layers of the population has become a

famous aspect of Dutch society (het polder

Why The NeTherlaNds has a good sTarTiNg posiTioN

9

model). The willingness to cooperate is crucial

in the transition towards a circular economy.

Herein, the Netherlands is considered a front-

runner, as embodied by the efforts of the Social

Economic Council. Bringing together relevant

parties to create a common ‘circular vision’ will

thus come easy for the Netherlands.

INDuSTry aND KNowlEDGE

Large Dutch companies are global pioneers of

doing business sustainably. Dutch multinationals

rank among the top on various sustainability

indexes16. DSM, Philips, AkzoNobel, Unilever and

FrieslandCampina, as well as the wider Dutch

industry, increasingly integrate sustainability

into the core of their businesses. Although

sustainability is not equal circularity, the high

ranks say a lot about the willingness within

Dutch companies to transform.

Born out of necessity, a number of industries

have grown vastly in in the Netherlands. Expertise

in the industries of water management, food,

agriculture and logistics has been a major export

product for decades already. The Netherlands is

a global role model when it comes to combating

climate change effects through smart water

management for example. In recent years the

waste industry has been added to Dutch specific

expertise. In the Netherlands, less than 1% of

waste ends up in landfills, and the percentage

waSTE TrEaTmENT

Valuable application

Incineration

Discharge

Landfill

Source: Agentschap NL,CBS. CBS/sep12/0204www.compendiumvoordeleefomgeving.nl

of re-used resources is growing, as compared to

resources burned for the purpose of generating

energy. Although recycling is only a part of the

circular economy, the Netherlands does have

a leading position in Europe with respect to

recycling household waste17. This expertise is

requested by other countries and serves as

a major export opportunity for front running

80

60

40

20

1985 1990 2000 20052005 2010 20151995

0

BlN KG

10

waste treating companies. In the transition

towards a circular economy the specific Dutch

expertise in water, food, agriculture, logistics

and waste management is extremely relevant.

The international reputation of Dutch Design

is growing. “Design is the first signal of

human intention,” says William McDonough18.

McDonough forces designers to be aware of

the consequences of a design, from production

to end of life. What materials are used and how

sustainable are they? The broad representation

of circular initiatives and workshops during the

Dutch Design Week 201419 shows that Dutch

designers massively embrace circular design

and that the ‘intention’ of these designers is

good.

Multiple expert universities are established in

the Netherlands possessing relevant know-

ledge for circular solutions. TU Eindhoven and

TU Delft belong to the global top considering

technical innovations in industrial design for

example. Since the 90s Wageningen University

has focused on food / agriculture innovations

and is amongst the global leaders in this field.

In the autumn of 2015, roundtable sessions

around the themes of urban environment,

logistics, agri & food and infrastructure will

be organized. A wide range of stakeholders will

examine and discuss how the Netherlands could

turn above-mentioned expertise into circular

expertise.

11

Lynda Gratton wrote a book titled “Hot Spots:

Why Some Teams, Workplaces, and Organizations

Buzz with Energy - and others do not.” In this

book she describes the conditions necessary for

a hotspot to arise. She summarizes this in the

following formula:

According to her, a hotspot is created when

cooperative attitudes are combined with an ability

to look beyond existing frameworks and having a

tantalizing target. The formula applies to countries

as well as it applies to teams and organizations.

As we’ve seen, cooperation is instilled in the Dutch

mindset. Besides, the Dutch are willing to look

beyond their borders and the country is small

compared to its huge production capacity. The

missing element in the formula is an attractive

common goal. By positioning the Netherlands

as a circular hotspot we will provide business,

government and citizens with this common goal

and entice them to realize this ambition. The

opportunity for the Netherlands to be the first to

manifest itself as a hotspot of circular economy

provides the potential premium of the ‘first mover

advantage’. The status of hotspot will attract

foreign investors and start-ups. Besides exporting

the knowledge about food, energy, water, waste

management and logistics the Netherlands has

the chance to export its knowhow on the circular

design of society.

worKING oN a BroaDly SuPPorTED vISIoN

During the first SER meetings ‘The Netherlands

as Circular Hotspot’ on January 16 and March 19,

2014, several leaders from Dutch politics, business,

science and civil society advocated a leading role

of the Netherlands in the transition to the circular

economy. As a direct result of those meetings and

in collaboration with the Ministries of Infrastructure

and Environment and the Economy the RACE

coalition20 was formed, which works to accelerate

the transition towards a circular economy in the

Netherlands. Besides RACE, Circle Economy and

INSID are working on the vision ‘The Netherlands

as a circular hotspot’ during 2015. Since the

Netherlands as circular hotspot is a national interest

the vision will be based on thoughts, ideas and

beliefs of a wide range of decision makers and

visionaries from business, government, academia

and civil society. In the run up to the Dutch EU

Presidency will they be able to contribute in

conversations or roundtables led by prince Carlos.

The aim is creating a vision that shows that the

Netherlands is uniquely positioned as a hotspot in

the transition to a circular economy.

CoNCluDING

The Netherlands needs a national ambition

that it can pursue with pride, connects similar

initiatives and allows its people to dream bigger.

Overambitious? Not at all. The Netherlands can be

proud of what has achieved in water management,

agriculture, logistics and waste management, and

it would fit the Netherlands if it masters the circular

economy with courage, intelligence, common

sense and determination.

“Hot Spots = (Cooperative Mindset x Boundary Spanning x Igniting Purpose) x

Productive Capacity”

- Lynda Gratton

Why The NeTherlaNds has a good sTarTiNg posiTioN

12

1 www.ellenmacarthurfoundation.org/business/reports/ce2012

2 www.rijksoverheid.nl/documenten-en-publicaties/rapporten/2013/06/20/tno-rapport-kansen-voor-de-circulaire-economie-in-nederland.html

3 www.cbs.nl/nl-NL/menu/themas/dossiers/eu/publicaties/archief/2012/2012-3726-wm.htm

4 www.rijksoverheid.nl/bestanden/documenten-en-publicaties/rapporten/2014/05/19/materialen-in-de-nederlandse-economie-een-beoordeling-van-de-kwetsbaarheid/materialen-in-de-nederlandse-

economie-een-beoordeling-van-de-kwetsbaarheid.pdf 5 http://www.clubofrome.org/?p=326

6 www.stockholmresilience.org/21/research/research-programmes/planetary-boundaries.html

7 www.rijksoverheid.nl/nieuws/2014/09/28/minister-schultz-wil-nederlanders-bewust-maken-gevaren-van-overstroming.html

8 http://aardgas-in-nederland.nl/de-toekomst-van-aardgas/aardgasreserves-en-verbruik/#3d

9 www.pbl.nl/publicaties/vergroenen-en-verdienen

10 www.rli.nl/sites/default/files/adviesnederlandselogistiek2040designedtolastweb_0.pdf

11 http://cdis.imf.org

12 www.rijksoverheid.nl/nieuws/2014/03/17/ruim-baan-voor-ambitieuze-ondernemer.html & http://www.rijksoverheid.nl/nieuws/2014/09/16/prinsjesdag-2014-versterken-economische-groei.html

13 www.nrc.nl/nieuws/2014/12/08/neelie-kroes-wordt-ambassadeur-start-ups

14 www.volkskrant.nl/economie/startups-in-de-polder-zijn-geldmagneet~a3841391

15 http://reports.weforum.org/global-competitiveness-report-2014-2015

16 www.sustainability-indices.com

17 www.wastematters.eu

18 www.mcdonoughpartners.com/design-approach

19 http://circulaire-economie.info/ddw-ce-hotspot-14/programma-ddw-ce-hotspot/]

20 www.circulairondernemen.nl

refereNces

‘an invasion of armies can be resisted but not an idea whose time has come’ - victor Hugo