Empowering the societal transition

Impossible transition?

The daunting scale of societal transition we face in the next decade or two, to avert major disruption or even collapse of our complex civilization, makes most of us feel helpless and discouraged, leading to denial (Trump & Co), action paralysis (many European governments) or over-simplistic “solutions” with marginal impact (please recycle your PET).

How can we positively engage citizens and corporations to act with the required speed and determination?

The recently concluded BSL course “Implementing Sustainability Strategy”, as a mini-trial, offers hope. With nine participants, at least as many nationalities between us, a guest speaker, and myself as a learning facilitator, our management experience ranging from basic materials and finance to software and humanitarian operations – we co-created a 3-day piece of this journey together.

Preparation

To prepare, a few hours of reading and thinking before class helped participants catch up to the latest knowledge and insights. Additionally, answering a few questions helped crystalize one’s thoughts. Finally, in the classroom: rearranging furniture so we are all seated around one big table; then sharing interests and expectations.

Discovery

We quickly moved beyond alarming images showing the climate or biodiversity urgency, air or plastic pollution, and scientific papers explaining the foundations. It was important to put current developments in a proper context – which is the basis of any serious understanding.

We went on a “discovery journey” from the Big Bang (looking into energy, entropy, and life), the evolution of homo sapiens (power of storytelling, oldest remaining human civilizations, agricultural revolution, enlightenment, industrial revolution), economics (concept of GDP, neoclassical, environmental, ecological and other flavors, need for growth, the myth of decoupling, rebound effect), technology (coal, oil, Haber-Bosch, green revolution, absolute and practical limits, technology as master or servant?), finally reaching societal changes (poverty, consumer society, industrial food). Interestingly, most fundamental questions like “What’s the purpose of society” are rarely asked and almost never collectively answered.

Barefoot economics

A useful tool on this journey is Manfred Max-Neef’s “Barefoot economics”, which the author himself condenses in 5 brief yet deeply insightful statements:

  1. The economy is to serve the people and not the people to serve the economy. 
  2. Development is about people and not about objects. 
  3. Growth is not the same as development, and development does not necessarily require growth. 
  4. No economy is possible in the absence of ecosystem services. 
  5. The economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible.
BSL post

Process of Personal Transition, John Fisher, 2012

Application to business

Back to the classroom, back to the companies we work for: it was time to apply this broader understanding. After the usual impact, materiality and lifecycle analysis, we tried a novel approach, asking the questions “Why does this product exist at all?” and “Which human needs does it satisfy”, based on Max-Neef’s Fundamental Human Needs model. A lower-impact solution is then sought that satisfies the same needs. This iterative process works best if part of a broader employee and management engagement process, which we also practiced.

Additionally, our guest speaker Mark Posey shared his extensive experience of how this all came together in real life at Schindler. The discussion lasted three hours including lunch, time very well spent.

Throughout this intense course, to keep everyone engaged, we tried to maintain a good rhythm, alternating videos, reports, class discussion, scientific articles, teamwork and presentations, short explanations, and individual reflection.

Ecosystem services experienced first hand

Ecosystem services are benefits humans derive from biodiversity, such as provisioning (food, medicine), regulating (flood protection, climate), cultural (meaning, heritage, relaxation) and supporting (soil formation, nutrient cycling). Every class day, just before sunset, feeling totally exhausted, we went for a 40-min restorative nature walk. As a result, the long evening group assignment went until 21:45, yet we were fully motivated. What better way to experience the value of cultural ecosystem services?

Feeling empowered

If we could somehow combine a deep understanding of the current situation and how we got there, a humanist vision of society based on human thriving over generations, a determination to experiment in different local contexts, a shared success metric based of high human development and minimal environmental impact, and finally inspiration of past cases of mobilization to face big challenges (example: a short BBC video) – we might actually feel empowered to start the transformation.

This is precisely what we did on a tiny scale at BSL.

Sascha_NICK Author: Sascha Nick, BSL Professor

Michel Jordi ignites that spark in the students of BSL on the occasion of their Business Innovation Week!

It was a pleasure to share some exciting times and “aha” moments with the students of BSL on the occasion of their Business Innovation Week this February. Thanks to the invitation of BSL’s Acting Dean, Dr. David Claivaz, and the newly appointed Chairman of the Executive Committee of the Doctoral school, Dr. Dominique Bourqui, I had the opportunity to exchange with the students on their entrepreneurial projects, which they pitched on the last day. As a serial entrepreneur, I was impressed by the creativity, the innovation and the scope of the projects the students presented. During our time together, we worked through the Lucky Clover and the Rainbow Target, the two first stages of my risk filter, to help them determine if their projects are fit for the Rollercoaster of Entrepreneurship. I could definitely see some promising ones!

Each group used these tools constructively to establish their business plan and this process encouraged them to develop their entrepreneurial mindset. It was interesting to challenge them, and see what ideas and revelations came out of putting them virtually in the driver’s seat of this exciting journey, as well as have them implement these tools to their specific needs. Some differences arose depending on whether they had a more personal or professional approach or a more individual one versus a team one. This illustrated the tools’ range in application and how they can be used to respond to the unpredictable nature of entrepreneurship. The students were curious, eager to learn and very interactive, which are key characteristics for success. As my mentor, K. Ueno used to say: “Everyone is my teacher, except myself.”

20190306_195457

In my new entrepreneurial book, “Ignite That Spark – 10 Commandments of Entrepreneurship”, I provide an insight into the world of business in which I share my own “real life experiences” and give a complete 360° view of entrepreneurship in a nutshell. Recognizing that time is precious and we think in images, I deliberately adopted a straight-to-the-point approach. My goal was to keep this book short and simple with memorable illustrations, the size of a notebook. It reads like a fine dining menu at a gourmet temple. You can read it à la carte or go for the full discovery menu with all its delicacies and calories.

But “Ignite that Spark” is not just another entrepreneurial book or a song, it is a message, a philosophy of life to break free and live your passion. The “Lucky Clover” is the kick-off highlighting the first 4 commandments. This is the entry test to have a first personal assessment to find out whether or not you are fit for the Rollercoaster of Entrepreneurship. The “Rainbow Target” is a roadmap to fine-tune your Business Plan. The “10 commandments” are recommendations, essential tips and “Red Flags” of do’s and don’ts. This book is a condensed guide packed with take-home value, which should be on every entrepreneur’s desk to refer to at any time.

20190306_194256

Exclusively for this special occasion, we presented for the first time our brand new “Ride to Success” illustration, which will enhance our upcoming e-book, and the new version of our Ignite That Spark song with its empowering lyrics, available on our YouTube channel. The event came to a close with the students and the professors all up and dancing, which we hope was a clear sign of a sparkling collaboration!

Today, my mission is to dedicate my time to pass on my good and bad experiences to the next generations. Entrepreneurship is indeed like riding a rollercoaster. You have to hang on through the lows to enjoy the highs. And my hope is that through the anecdotes and stories of my personal journey, I helped to show to the students that anything is possible and that I inspired them to break free and live their passion!

www.ignitethatspark.com

Book signing 1Author: Michel Jordi

Innovation course addressing the learning appetite of students, the imperatives for companies and the challenges for megatrends

As I am correcting the post-assignments of the “Internal and External innovation” course, I am reflecting on the nature of innovation that will have to be addressed by us but more importantly by our students over the next decade.

Obviously, the Digital revolution will continue and it is estimated that half of the jobs in this area in 2030 don’t exist today.

Sustainability: the increase of population from 7.5B today to 10B in 2050, with natural resources that will actually reduce in absolute value, will have to be tackled.

Inequality, with a middle class that used to be the cement of democracy, will get poorer and with an aging population that may not afford the cost of medical care.

There are a dozen more critical topics that will equally require a constant curiosity, critical eye, pertinent innovation, and successful execution.

Along with all the courses of BSL, we hope that the innovation best practices and experiments that our students have played with will better equip them to face these challenges. We hope that the creative teamwork they have engaged in the internal and external innovation class will give them the fortitude to discover, to ideate, to try, to iterate and deliver value for the world.

In the meanwhile, our students will certainly deliver value to customers, helping their company to develop and prosper, but also ensuring that this prosperity will bring true value that will not be used to buy and deplete other companies.

To achieve this ambitious vision, we sincerely believe that we have given the participants an appetite for continuous learning, confidence in the creativity they showed during their childhood and the trust in working in teams, as they did in our class, working for instance on a real venture. They helped indeed a young entrepreneur in collecting customer insights, making sense of them and brainstorming on various scenarios. True Design Thinking process applied in real life!

Yves KarcherAuthor: Yves Karcher, BSL Associate Professor

BSL Alumni Mentoring Program – a year after the launch

careers guidance counsellorThe BSL Alumni Mentoring Program has been up and running for a full year, with 20 Alumni and 20 students involved in this pilot project launched by BSL Careers in January 2018. It is time to share with our community some observations and feedback about the program.

To mentor? Or not to mentor? This is the question that many BSL Alumni may have asked themselves after reading the email about my mentoring idea in summer 2017. It’s been nearly one and a half years since and I have spoken to numerous people both in person and over calls on the phone and Skype for interviews, the launch and the feedback gathering. As the designer of the program, it has been a great experience for me to get to know the Alumni, and to connect students with mentors from around the world.

I started gathering feedback from the mentors and the mentees throughout 2018. This data was collected through emails and face-to-face interactions and has enabled me to identify encouraging patterns as well as some areas for improvement. The results varied with many connections working well, with few barely taking off at all. Let’s look at some of the key takeaways from the program.

Positive patterns

The majority of students selected for the program reported that they found the experience to be a great success and enjoyed their first taste of a high-level networking. These students stated that the program offered them a safe space, free from grading and judgement, offering them opportunities to understand more about how professionals think in the different phases of their careers. The discussions concerning careers and professional development were also found to be extremely valuable.

Most of the Alumni mentors enjoyed opportunities to connect and engage in thoughtful conversations with younger, ‘switched on’ students and gained valuable insight on the next generation’s trends and incentives.

A discussion with a particular mentor made me realize that the program could also develop in directions that were not necessarily foreseen during the design phase. A very experienced entrepreneur, who was paired with a Master student, shared his highlight of the program, mentioning that “…at some point, the student and I swapped the mentor-mentee role as we reached such a great level of empathy between us. Something I truly enjoyed!”. I found this statement to be highly encouraging, as both the mentor and mentee indicated that they have continued the mentoring beyond the 10 hours and will meet this coming April in person!

Some experienced Alumni have also expressed their appreciation for the program, being of the opinion that it came at the right time in their careers when they felt a need to give back and help others.

On top of these positive patterns, we managed to bring some of our Alumni back to BSL and enrich our MBA seminars while tightening the connection between current students and Alumni, something which is particularly important when nurturing our community.

Where and how can the program improve?

I have taken into account that many of the Alumni who have a wealth of managerial and work experience have never officially mentored anyone before. Taking this feedback into consideration, I will be preparing future mentors with some practical examples to help guide and inspire them. In doing this I hope to improve the overall experience for both mentors and mentees.

Additionally, I received feedback regarding the impact of imposing mentoring time frames. Some felt that by assigning 10 hours to this process, the program ran the risk of limiting an experience that should develop naturally, without boundaries. This feedback will be implemented into future programs when new mentors will only receive a finite amount of hours to decide whether they will continue mentoring their mentees.

Lastly, many mentors expressed concerns that their mentees seemed to be more interested in accessing their networks than engaging in holistic discussions about their future. As the aim of the mentorship program is to create a space in which mentors can share personal and professional decisions, challenges, dreams and fears, we will be adapting the application process, requiring new applicants to submit a thorough motivation statement.

Alumni Mentoring Program in 2019

If you are a BSL Alumna/Alumnus with 5-7 years of management experience and would like to know more about the BSL Alumni Mentoring Program, please contact me directly at daniele.ticli@bsl-lausanne.ch. I will be happy to walk you through the objectives of the program and share some inspiring stories with you!

Dani-Linkedin-300x300Author: Daniele Ticli, BSL Head of Careers and External Affairs

FIER by Andrea

Fashion, quality and something Italian.

 

In a new interview series by the BSL careers office, we’ve decided to look at what life looks like for our business and entrepreneurial students after studying at Business School Lausanne.

Andrea Sacco is a name you will want to follow closely as this business management student at BSL pushes to reinvent the online fashion experience. We were privileged enough to spend some time talking to him about his latest business venture and what he finds so important about the BSL experience.

andrea sacco fier           source: FIER by Andrea

A little bit about you…

My name is Andrea Sacco, I’m a student at Business School Lausanne and I am the founder of FIER by Andrea an online clothing company specializing in luxury street wear.

How did you get the idea for your business?

The company started with the idea that the [online] fashion world was missing something – quality. I looked at many well-known brands who were offering products which were extremely overpriced when compared with their quality. I realized that I wanted to make a difference within the industry and decided to draw on my own experiences as a child in Italy, where I was always exposed to quality clothing. I loved the idea that you could fall in love with being proud of what you wear and that’s how FIER – French for proud – was born.

What is the key point of difference that your business has?

I believe the fundamental difference between FIER and other online streetwear brands is quality. Quality in every aspect of the fashion experience. Our materials are well researched and carefully sourced and our designs are original with iconic elements remaining throughout the way with Fier.

What has been your greatest triumph and hardest challenge?

I don’t believe I have had a ‘greatest triumph’ yet. I don’t believe that will happen until I am [by my standards] 100% successful. However, what I am proud of is the fact that from the outside, everything looks the way we wanted it to look. We have been able to defend our decisions with suppliers and make them create things in line with our points of view. So I am really proud of where we are with FIER. The organization’s existence, itself, is a triumph for me.

pic andrea sacco 2                       source: FIER by Andrea

How did your studies help prepare you for running your own business?

Studying at BSL was really great for me. The school, the environment, and the professors really helped me to grow and develop as a person. I met amazing people from many different places, which really opened up the world to me. In terms of what I studied preparing me to run a business, there were a few essential courses which really helped me, notably: marketing with Kelly Krentz who is an acclaimed international marketer with a solid track record in portfolio brand strategy, communication development,  Her experience spans regulated (OTC, Beverage), non-regulated (FMCG) and not-for-profit (Community building) industries where she has held both global and regional roles which helped us understand marketing concepts from various avenues. Other classes that truly helped me expand my understanding of business were my accounting and statistics classes.  Finally, the class I felt really broaden my horizons was sustainable business with Dr. Erdal Atukeren, who has an overwhelming amount of experience in all things economics related, including playing a role as a Senior Researcher in Macroeconometric Modelling & Forecasting at the ETH Zürich, Swiss Economic Institute.

Would you recommend BSL to other entrepreneurs and why?

I would most definitely recommend BSL to other aspiring entrepreneurs. Even though I believe the ability to be an entrepreneur extends beyond your schooling, the support I received from my professors and the people I was exposed to here has really helped me.

Tell me a little bit about your lines, especially the one recently released.andrea sacco feir

The latest collection takes a step towards Japanese culture. After a trip to Kyoto, I was inspired by the Bushido and Oni masks. I have created a conglomerated, hybrid version of these two concepts which have been designed and stitched onto 100% Italian, 100% cotton hoodies using over 150000 stitching points. We’re keeping with Eastern-inspired cultural influences in the upcoming masks and will be releasing some exciting lines in the not-too-distant future.

                                                                                                               source: FIER by Andrea

You can find out more about Andrea’s incredible business venture by visiting his online store https://fierbyandrea.com/en/, as we follow the young entrepreneur on his journey to the top.

BSL journal: My amazing experience in China

To top off an already exceptionally rewarding studying experience pursuing my Master’s degree in International Business at BSL, I decided to head to China for one semester as an exchange student at the Renmin University of China in Beijing. I would soon realize that this would be one of the greatest decisions I ever made.

Changing my environment, leaving my comfort zone in Switzerland and moving halfway across the world for 5 months to study in a University of 25,000 students proved to be a unique experience which also turned out to be a very profitable adventure for me. As for my courses themselves, I took 3 classes per week during my 4 months which were similar to the ones in Lausanne. The biggest difference was the environment: Beijing is an impressive sprawling metropolis with 21 million people living together in the heart of the world’s soon-to-be primary economic powerhouse. I understand that everybody will have different experiences in this remarkable country, but I made mine a successful one by getting involved. I gave myself the goal to leave China with more than with what I arrived with.

bsl student china experiencesource: David Adrien Vanni via Techstars Global Startup Weekend Beijing

Thanks to my thesis topic about startups which I completed during my exchange, I have been fortunate enough to find myself involved in the startup world in China. Beijing is one of the most active startup centers in the world. I participated in a 54-hour creative weekend workshop where strangers meet and work together on an innovative idea and pitch it to a panel of professionals by the end of the weekend. My team was awarded 2nd place out of 12. From there, together with two members of my team, we decided to push our idea further and I integrated their startup 3 months later – an educational platform providing consulting and tutoring services to Chinese high-school students willing to enroll in top US and UK universities. I am now the Director of Business Development and a shareholder of a fast-growing startup with revenues in a $2 billion market.bsl student china

source: David Adrien Vanni via Techstars Global Startup Weekend Beijing

Life has so much to offer when you are genuine and committed, so don’t miss out and go the extra mile, it’s beautiful out there.

Author: David Adrien Vanni, BSL MIB Alumnus

12 Images of an effective learning environment

For quite some time, I have been thinking about the characteristics of an effective learning environment. My objective was to compile a list of ideas in response to the question “What makes a learning environment an effective one?”

Recently, I read the book Mindstorms: Children, Computers, and Powerful Ideas by Seymour Papert. First published in 1980, this book includes Papert’s arguments in favor of using computers as a learning tool in an educational setting. Being an education theorist, Papert characterizes the essential properties of an effective educational system. I was amazed at how close the ideas presented by the author were to my experiences as an educator. Therefore, I thought it was time for me to present the twelve images that characterize an effective learning environment as seen by Papert and experienced by myself.

  1. In an effective learning environment, learning occurs naturally as a byproduct of the learners’ interactions with their surroundings, without the need of structured teaching (e.g. lectures, presentations), similar to the way a child learns to talk or walk. In such environments, learning occurs through embodied experiences that engage a full range of human sensitivities in an interactive and spontaneous way.
  1. In an effective learning environment, the educator focuses on creating personally meaningful and intellectually coherent learning experiences for the learners. In such environments, learning is not separate from reality. The learners are thereby not left alone in making sense of what they learn and are guided by the educators in their journeys of reconciling, accommodating and assimilating new knowledge within their existing intellectual structures.
  1. In an effective learning environment, the learners and educators both challenge themselves by venturing into the unknown and going into a space that is out of the boundaries of their comfort zones. They give themselves permission to fail and learn from their failures. In such environments, exploration, failure, and discovery are key ingredients of the learning process.
  1. In an effective learning environment, the learners make the newly acquired knowledge and ideas their own. They deconstruct what they learn into fundamental ideas, reshuffle and combine them in new and innovative ways and generate a personalized way of applying and communicating what they have learned.
  1. In an effective learning environment, theoretical knowledge is a means to amplify and expand the learners’ intuitive understanding of their surroundings. In such environments, not only does theoretical knowledge not oppose the intuitive insights of the learners, but it also serves as a mechanism through which the learners can enhance and refine their intuition, and subsequently their creative capacity.
  1. In an effective learning environment, interaction, communication and collaboration amongst the learners and between the learners and the educators are facilitated and enriched. In such environments dialogues are viewed as a free flow of meaning and knowledge is viewed as a means of creating harmony between the learners and their surroundings.
  1. In an effective learning environment, measuring learning provides an opportunity for more learning, rather than hampering it. Therefore, the learner’s understanding of a subject matter is not merely judged as “right” or “wrong” but considered, by the educator, as a powerful starting point and a foothold for designing further learning.
  1. In an effective learning environment, the learner and the educator’s roles are interchangeable. In such environments, learners learn from their peers, realizing that the educator’s role is not exclusive to the educator and that they themselves can be sources of inspiration when it comes to knowledge acquisition and development. Educators also realize that to be an educator is synonymous with being a lifelong learner.
  1. In an effective learning environment, the learners learn from the educators not by “what they say” but by “what they do”. In such an environment, the educators are the embodiment of the ideas that they want the learners to encounter, and they look sensitively for conflicts between what they preach and what they practice (i.e., their stated and revealed preferences).
  1. In an effective learning environment, both the learners and educators think about the ways they think and learn about the ways they learn. In such environments, every topic provides the learners and educators with an opportunity to become a better learner and thinker by reflecting upon their assumptions, mental models and cognitive heuristics and biases.
  1. In an effective learning environment, learning is an interdisciplinary undertaking. Meaning that, boundaries between different disciplines fade and that learners and educators are encouraged to transfer insights from one field of inquiry to another. In such environments, the focus is on creating connections between seemingly different ideas.
  1. In an effective learning environment, the fundamental assumptions underlying what constitutes an effective learning environment are continually challenged and critically reflected upon. In such environments, education is viewed as a fluid and ever-changing phenomenon that should dynamically adapt to cultural, pedagogical, scientific and technological developments.

I hope these 12 images can give you a bigger picture of an effective learning environment. While compiling this list, I quickly realized that each of these 12 images deserves a more in-depth treatment. Therefore, my intention is to elaborate on every point and exemplify it with instances and cases from my own learning design activities. So, stay tuned for the next entries in this series. Meanwhile, if you think some more ideas need to be added to this list, please do not hesitate to leave a comment. I would also be happy to know which of these images resonated most with you.

arash golnamAuthor: Dr. Arash Golnam, BSL Professor

Marco Piermartiri: a BSL Alumnus appointed COO of the Geneva Chamber of Commerce

marcoMarco Piermartiri, one of our EMBA Alumni, was recently appointed as Chief Operations Officer (COO) of the Geneva Chamber of Commerce, after an exciting career going from consultancy and entrepreneurship to telecom and digital transformation. Marco had already valuable touch-points with Chamber of Commerce, having collaborated with them as a Telecom and Digital transformation expert respectively in 2003 and in 2017. A professional marriage that was meant to happen?

Graduated from Business School Lausanne in 2000, Marco is a seasoned B2B and Digital transformation expert with a background in engineering who started his career with Swisscom when the company was still State-owned, climbing to the Director position of Enterprise Solutions in 1999.

Throughout his career, Marco covered executive roles as well as the role of entrepreneur: In 2005 he was Vice-President of Integrated Solutions (a local IT services company), selling the company and running the executive operations of the bigger buying firm, Business&Decision, where he managed to raise the numbers by three times (revenues, profits, collaborators) and to open subsidiaries in various cities throughout Switzerland. An important milestone in his career that set up the foundation for his own business consulting firm, ONDACO, which saw the light of the day in 2012.

Since a few weeks, a new chapter of his professional career has started, taking the lead on the business operations of the Chamber of Commerce in Geneva. The most exciting challenge is for him to transition from consulting to action, this new position will be a great way to provide tangible help to established companies, as well as recently launched enterprises and young entrepreneurs. Considering that the Geneva Chamber of Commerce is an absolutely independent and private economic association, although having a non-profit status, it actually operates as any private company does.

BSL congratulates Marco on this new adventure, being positive that once again he will keep our flag flying high.

Dani-Linkedin-300x300Author: Daniele Ticli, BSL Head of Careers and External Affairs

Educators’ dilemma: is neoclassical economics consistent with the laws of physics?

As educators, our most important task is to help prepare our students to lead successful professional and personal lives, for the next 40+ years, until 2060 and well beyond. While much is unknown on this time scale, we now do understand the big picture, including fundamental human needs, as well as the material basis for satisfying them, especially around biodiversity and energy – the previous blog “Reflections on 2018: complexity, messiness, progress” provides a few illustrations.

So, while we cannot provide recipes valid for half a century, we certainly can help our students develop a way of thinking, even a worldview, which will prepare them for the challenges they will face.

This means first and foremost understanding human society and the economy in “real”, biophysical terms, including the underlying energy and material flows.

We could start with biophysical economics, a school of economics based on biological and physical resources, with a strong focus on energy, especially around food production, new energy sourcing, and the concept of EROI (energy return on (energy) invested). Biophysical economics has a long history, starting in the 1920s with Frederick Soddy (building on 19th-century insights, especially the laws of thermodynamics), with major contributions by Nicholas Georgescu-Roegen in the 1970s, and more recently by Charles A. S. Hall, Cutler Cleveland, and Robert Costanza. The Encyclopedia of Earth provides an excellent overview.

So far, this work has remained outside of mainstream economics. There are many reasons, including a much higher complexity of looking at underlying material and energy flows instead of money, and the fact that most leading practitioners, including all listed above, are not economists. It requires a fundamentally cross-discipline approach. At the same time, this is a big opportunity for teachers of other disciplines beyond economics to help expand learners’ perspective. I sincerely hope this gives rise to many fundamental reflections.

Biophysical economics is closely related to ecological economics, but differs in its focus on energy and entropy, compared to the latter’s focus on ecosystem services. Both are forms of strong sustainability, as opposed to environmental economics and similar approaches, which complement neoclassical economics with pricing externalities, but regard all forms of capital as interchangeable (for example, human misery or polluted water is OK, as long as sufficient economic value is created). Biophysical economics not at all related to econophysics, which applies methods (originally developed in physics) around stochastic processes and nonlinear dynamics to classical economics – to simplify market economics worldview, physics tools.

Notwithstanding its sophisticated mathematical toolbox, neoclassical economics considers itself (and is) a social science, focusing on markets and human behavior, mainly of consumers and managers. In the classical view, scarcity leads to higher prices, spurring technological innovation and substitution, allowing the economy to continue growing (forever).

Let me illustrate this disconnect with a few examples:

  • Absurd energy-related decisions: producing bioethanol (a biofuel) requires oil, and for every 100 joules (J) of oil, around 80 J of bioethanol are produced – a net energy loss of 20%, in addition to pollution, biodiversity loss, human labor, etc. In real terms, this makes absolutely no sense; with subsidies, in our distorted financial system, it might be profitable.
  • New energy sources: our growth society requires constant discovery of new energy with an EROI (energy return on invested) >11 (Fizaine and Court, 2016, “Energy expenditure, economic growth, and the minimum EROI of society”). Historically, oil had an EROI over 100, current oil sources are around 17 and falling; solar panels typically have an EROI of 4-8. There are currently no known new energy sources, broadly scalable in the coming decades, with the required EROI to maintain our growth economy.

revisiting the limits to growthSource: Hall and Day, 2009, “Revisiting the Limits to Growth After Peak Oil”

  • Decoupling economic growth from energy use is unfortunately not happening. In fact, due to the rebound effect, energy efficiency often leads to an absolute increase in energy demand. For example, our consumption of energy for lighting has increased about 100’000 times over 300 years, or about 10’000 times per capita, in spite of an extraordinary increase in efficiency. The consumption of light itself increased a billion times.

All models are oversimplified and wrong; some are however useful. Unfortunately, the neoclassical economics model has outlived its usefulness. Consequently, many economists, managers, and political leaders make dangerous decisions not understanding the physical limits, or at least the practical limits to substitutability, scaling and deployment. The reason I believe the biophysical economics model will be much more useful is that it starts with the most fundamental constraints of all life: energy and entropy.

To answer the question in the title: with the notable exception of limits to material and energy consumption growth, neoclassical economics mostly stays within the laws of physics (without necessarily paying much attention to them), sadly ignoring the biosphere it depends on. Just as bad, it completely ignores human well-being beyond the idealized, rational, by now discredited “homo oeconomicus”. As such, it is no longer serving the society it is part of.

The way forward: while we know what we need to do, we don’t quite know how to get there in the relatively short time available, in a world of soon-to-be severely constrained energy and degrading-but-still-functioning ecosystem services.

As educators, we’ll succeed if we equip our students to experiment as (social) entrepreneurs and find effective solutions to human and environmental issues. Just as importantly, our students should feel empowered to shape the reality they live in, take proactive steps towards changing the rules of the game, vote and engage in politics, and serve as role models in their communities. Some of their projects could become the seeds of future human prosperity. Helping learners move beyond neoclassical economics will be a necessary first step. A deep awareness of the biophysical reality might be a good place to start. This is our challenge for all teachers and learners, in every discipline.

Sascha_NICK Author: Sascha Nick, BSL Professor

Reflecting on 2018: complexity, messiness, progress

December is an excellent time to reflect on the year, and 2018 requires more reflection than most. Wherever one looks, 2018 was messy, from politics (consider, for very different reasons, Brexit endgame, “gilets jaunes”, or Korean denuclearization) to how we deal with major issues: picture 30’000 COP24 delegates in Katowice, surrounded by coal mines and coal dust, struggling to put in practice the good intentions of the 2015 Paris Agreement.

2018 was a year of extraordinary progress of knowledgeTo illustrate:

In February, Steven Pinker set the tone with his well-researched book “Enlightenment Now: The Case for Reason, Science, Humanism, and Progress”, demonstrating the spectacular improvement of human wellbeing on 15 dimensions, including health, safety, and happiness, using data to dispel common myths.

This was followed by one of the most important scientific publications ever, the IPCC 1.5°C report. For the first time, we know exactly what to do to limit warming to avoid the worst consequences (simplified: reduce CO2 emissions by 58% by 2030, replant forests).

 

Report October 2018

Source: IPCC 1.5°C Report, October 2018

Scientists from the University of Leeds scaled these limits to a per capita level in their paper “A good life for all within planetary boundaries” (Phosphorus 890 g, Nitrogen 8.9 kg, material footprint 7.2 t). They introduced a new indicator eHANPP (embodied human appropriation of net primary production), representing biomass harvested or killed for human use, with a suggested limit of 2.62 t per person per year.

Why don’t we act as needed? Knowing exactly what to do is only a first step, but it’s not very useful if we don’t act. So, we need to ask, why are most of what we do “business as usual”? Why do we keep collectively creating outcomes most of us don’t want, like environmental destruction, broken communities, lack of trust, financial crises, millions of refugees, malnutrition, or obesity? This includes individual, company and government action, often pulling in the same (wrong) direction.

Part of the answer lies in the way our socio-economic system has evolved, with its stocks, flows, buffers, positive and negative feedback loops, rules, parameters etc. A simplified example: debt payments require growth, which requires cheap energy, meaning burning fossil fuels, leading to pollution and many other problems.

A bigger part, however, is probably linked to the way we think about the economy: as an independent system, following its own mechanistic rules (remember supply and demand curves from Econ101), separate from the environment and partly detached from society. At its core is money, as a benchmark, behavior driver, store of value, in addition to being a means of exchange.

Without this cultural baggage, an independent observer would see a still beautiful planet with a threatened biosphere; closed material flows but open energy flows powered by the sun; a dominant, individually smart but collectively stupid species obsessed with power and money; a highly complex human society and civilization as a subset of the biosphere; an economy as a subset of society and sub-subset of the biosphere, completely dependent on ecosystem services it is busy undermining.

Outlook: Looking back as far as our data will allow, with Steven Pinker’s help, suggests hope. The progress of knowledge in 2018 reinforces this hope, in spite of the rising complexity of today’s issues. The next blog will examine how we as educators can contribute.

Sascha_NICKAuthor: Sascha Nick, BSL Professor