Integrating Circular Economy, Capability Approach and Action Research. Maria Angela Ferrario1, Zoltán Bajmócy2, 3, Will Simm1, Stephen Forshaw1. 1 Lancaster University, School of Computing and Communications, Lancaster, UK 2 University of Szeged
, Faculty of Economic Research Centre, Szeged, Hungary 3 Community-based Research for Sustainability Association (CRS), Szeged, Hungary Corresponding author email:
To be presented at the 11th International Conference of the European Society for Ecological Economics (ESEE), 30 june-3 july 2015, Leeds,
UK-http://esee2015. org/Summary The relentless pace of digital innovation is driven by large by economic models of growth and their demand for novelty, generalizability and scalability.
agile and reflective approach that integrates a) the principles of circular economy b) the practices of open-source licensing c) the principles of capability approach.
Circular Economy; Capability Approach (CA) Theme: 7. Special sessions Subtheme: 7. 34. Transformative Science for Transformative Social Change:
energy resources and processes used to make the technology harmful to humans or the environment?
We argue that the circular economy approach 10 as well as the human development and capability approach 3 are meaningful ways for exploring potentially sustainable technology development processes.
Underpinning Concepts The circular economy approach is a thinking framework that considers economy as a network of systems that transform resources (e g. actual material, energy) and feeds them back into a closed virtuous loop.
which develops products as services that are economically strong, socially beneficial, and ecologically intelligent 10.
Ecover, Puma) addressing tensions between economic growth and environmental health and human wellbeing. However, we argue that even a sustainably
while Biggeri and Ferrannini 4 argue that the emergence of such‘opportunity gaps'is a widespread phenomenon.
and CA can be applied to our technology-innovation framework by introducing one of our technology prototypes,‘Clasp,
Clasp has entered now a second phase of development (from prototype to pilot. One of the main lessons learned from Clasp's first phase of development is that everybody is unique
and scalability for the relatively more affluent‘averages'weakens our economy by concentrating wealth and power in the corporate network of the few 17 instead of harnessing the strengths of more diverse, distributed and potentially more resilient parts of society.
Biggeri, M. & Ferrannini, A. 2014) Opportunity Gap Analysis: Procedures and Methods for Applying the Capability Approach in Development Initiatives.
Co-designing prototypes with vulnerable communities. Technological Forecasting and Social Change, 84,131-142.17. Vitali, S.,Glattfelder, J. B,
and the basic services 15 The sectorial services and solutions 16 The specific implementation in local nodes of innovation 17 4. MEASURES AND INSTRUMENTS FOR DIGITAL BUSINESS ECOSYSTEM IMPLEMENTATION...
23 FN, September 2002 Digital Business Ecosystems page 3 1. OVERVIEW AND RATIONALE Small Organisations and e-business The SMES are the backbone of European economy (there are now over 19
In most EU Member States, SMES make up over 99%of enterprises and do generate a substantial share of GDP,
as well, are a breeding ground for entrepreneurship and new business ideas. However, in the new globalised business scenario
and adoption of ICT technologies and thus to avoid a digital divide between larger and smaller enterprises and among geographical areas.
The two digital divides At the Lisbon summit in March 2000, the European union representatives set the goal of becoming the world's most dynamic and competitive knowledge-based economy by 2010 with the need to promote an‘Information Society
and adopters of ebusiness in some cases perceived as the worldwide benchmark the situation is entirely different in regions with less developed economies, particularly in Southern Europe.
The digital divide by company size arising from the significant‘gaps'between SMES and larger enterprises in the more advanced forms of electronic commerce and particularly in terms of e-business integration and associated skills.
and ICT usage by European enterprises survey of 20011 The effect of the two digital divides is cumulative
in 13 EU Member States plus Norway (the gross sample was 100,000 enterprises), and reflects the situation in the period November 2000 and June 2001.
and sponsored by DG Enterprise. This covered the adoption of ICT and ecommerce in all sectors of the economy. 2 Benchmarking national and regional ebusiness policies for SMES Final Benchmarking report 12 june 2002 SMES and ICT goal of Lisbon regional divide
size-based divide a FN, September 2002 Digital Business Ecosystems page 4 Background The challenge is to achieve widespread and effective take-up of ICT to enable SMES to become more innovative and competitive in global markets.
it is necessary to study the socioeconomic impacts of new technologies, working practices and business models.
and implementation affects the business environment for all enterprises, but is of particular relevance in informing future policies for SMES.
and transferred to Small businesses by using new and more effective business models. Three main key issues should be addressed to effectively support Small Businesses evolution toward the knowledge economy:
funding of longer term risk projects that will feed the Small Business cycle on an iterative basis;
and added value services aimed at creating innovation and synergies at local level among several local realities. the development of a policy of knowledge sharing for SMES, their organisations and local government 3 IST FP5
Shortage of knowledge, skill, entrepreneurship The lack of suitable technical and managerial staff with sufficient knowledge and expertise is a major barrier.
but also entrepreneurial and managerial expertise needed for operating in a networked economy. SMES critically depend on on-the-job competence.
Investments/Costs The costs of the introduction of e-business practices for a single small organisation
therefore uncertainty about the viability of the initial investment and the rising cost of maintenance services may reduce their willingness to undertake the necessary investments.
In addition, SMES have to be 5 See for example ENSR Enterprise Survey 1999 as used in The European Observatory for SMES Sixth Report, European commission, 2000 6 Brussels, 13.3.2001-COM (2001) 136
final-Communication from the Commission to the Council, the European parliament, the Economic and Social Committee and the Committee of the Regions helping SMES to"go digital"FN,
September 2002 Digital Business Ecosystems page 6 prepared to outsource ICT services and to acquire professional skills
Complexity of regulations Although today's regulatory environment seems to accommodate ebusiness satisfactorily at national level,
and in particular semi-standardised legal advice, is therefore of crucial importance for SMES who, more than any other business, need simplicity and predictability.
Shortage of Capital It's well known that the European small organizations have difficulties of access to financial resources,
Economic failures are an intrinsic element in a fast-changing environment like the Internet. Small organisations are reluctant to invest in ICT rather than concentrating the investments in their core business. 2. THE DIGITAL SYSTEMS EVOLUTION
AND THE ADOPTION PHASES Status of digital adoption for small organizations E-business is described often as the small organisations'gateway to global business and markets,
and sectors, there is generally a positive correlation between the size of an enterprise and its Internet use for business,
As a result, the preponderance of SMES in Europe's economy is matched not by their use of digital systems. 7 in 2000 34%of large enterprises compared to 10%of SMES10 used e-business services (source Eurostat) FN,
In the early stages, Internet has been used as new instrument of commercial communications: First phase: e-mail (early adopter started in 1986:
Have their own website the 80%of large enterprises; 8 SMES10=enterprises with between 10 and 249 employees 9 large enterprises are considered by Eurosta the enterprises with more than 249 employees e-mail webpresence phases FN, September 2002 Digital
Business Ecosystems page 8 6%of Spanish SMES10, 9%of Italian SMES10, but 67%of Finnish and 65%of German SMES10. 10 E-commerce Third phase:
When finally the technology allowed the use of the Internet to perform economical transitions on-line between enterprises and consumers (B2c) or among enterprises and suppliers,
or internally inside the same enterprise (B2b) the e-commerce started, allowing to the enterprises purchases, sales, electronic auctions, e-payments.
This stage brings closer interaction as customers and suppliers work together on-line and as vendors customize content for their users.
Even in the most advanced Member States, only a minority of SMES11 uses the Internet for commercial transactions
European SMES therefore risk missing important economic opportunities. E-business Fourth phase: e-business (from 1999) Internet technology has gone far beyond a mere means of electronic transactions becoming a foundation for applications linked to the core business systems,
The e-business technologies allow the enterprises to effectively directly connect with clients, suppliers, and business partners.
The e-business opportunities are taken mainly by large organizations, whilst the single small organization faces with well-known barriers:
-N 11 In 2001,6%of EU enterprises used Internet for electronic delivery and 7%for e-payments;
18%of SMES10 and 34%of large enterprises for e-ordering. Only 3%of EU enterprises used Internet for ecommerce for more than 2 years (20.2.02 Eurostat, ibidem) obstacles e-commerce e-business FN, September 2002 Digital Business Ecosystems
page 9 management, the limits of bandwidth and Internet access are considered not an obstacle. The major obstacles could be overcome by having a software infrastructure with services at acceptable costs
and adequate quality having the possibility to acquire the knowledge of business practices and to get the technological skills.
Networked organisations The intensive exploitation of e-business systems gradually modifies how enterprises and markets are organized.
creating new organisms that (at least some of the time) will find ways to adapt to the new digital business environment.
develop value added products and services, and share knowledge and experiences When groups of organisations adopt networked methods of cooperative work,
make associations for exploiting the market opportunities, combine their products and services, could jointly produce
and offer new services and products. The boundaries among the organisations start to fade, forming networked organisation.
The Networked Organization is then a response to restructure and respond to the new digital market,
such as the lattice organization, the spider's web, the holonic enterprise and the virtual corporation. All describe new ways of organizing.
This will dramatically affect the ways enterprises are constructed and business is conducted in the future, and the actual slowly changing organisations will be 12 Lipnack, JL,
which envisages the dynamic aggregation of services and organizations, is required a further stage in ICT technology adoption which exploits the dynamic interaction (with cooperation and competition) of several players in order to produce systemic results in terms of innovation and economic development.
The basic players to be considered are: research and education organisations, innovation centers; small and large enterprises with their associations;
local government and public administration. The adoption and development of scalable and adaptive technologies, allows new models of business based on the dynamic association of enterprises.
The ecosystems are, in fact, characterised by intelligent software components and services, knowledge transfer, interactive training frameworks and integration of business processes and egovernance models.
The latter step in the adoption of Internet-based technologies for business, where the business services and the software components are supported by a pervasive software environment,
which shows an evolutionary and self-organising behaviour, will be named digital business ecosystems. Then Sector-specific ecosystems will pop up
and software components and services developed for that area of business will appear. These components are based on a set of specific requirements in sectorial,
to distinguish it from the business ecosystems used for socioeconomic analysis. In general terms both a local business environment
In the biologic environment, genetic information, recorded in the DNA molecule, is the basis of all life.
In the economic environment, technological information, captured in books, blueprints, scientific journals, databases and the know-how of millions of individuals, is the ultimate source of all economic life. 15 Organizations,
seeing your business as part of a wider ecosystem and environment. Our traditional notions of vertical and horizontal integration fail us in the new world of cooperating communities.
Don Tapscott, David Ticoll, Alex Lowy, Digital Capital: Harnessing the Power of Business Webs, Harvard Business school Press;
May 2000) James Moore, Death of Competition: Leadership and Strategy in the Age of Business Ecosystems, Harperbusiness;
and other stakeholders of these primary species including government agencies, regulators, associations, standards bodies, and representatives of the host community.
The digital business ecosystem, is a digital environment populated by digital species which could be software components, applications, services, knowledge, business models, training modules, contractual frameworks, laws, These digital species,
like the life species, interact, express an independent behaviour, end evolves or becomes extinct following laws of market selection.
i e. services not interesting for the market are less and less used, becoming less and less present in the ecosystems,
New more evolved innovative species (digital services, but also innovative business models, sectorial services.)continuously appear and decree the obsolescence of the other digital species. Gradually more complex species appears,
often originated by the composition of simpler digital species (components, basic services). As the natural ecosystems, the digital species should have enough individuals to survive
and the digital ecosystems should be populated by a sufficient number of species (a critical mass of species) for being appealing for the market
a common support environment and a generic basic infrastructure, which includes basic services components, generic integrated solutions and infrastructure components.
The sector-specific ecosystems: services, solutions and components specialized for a specific sector (e g. agro-food, tourism, manufacturing) or transversal applications (e g. logistics) that use the services of the common support environment.
The instances of the sector-specific ecosystem applied to a specific node of innovation, geographical area (or to a network of them), supporting,
These networked instances forms the network of ecosystems instrument for networking the European enterprises and organizations in a business excellence network In the natural environment,
In the same way in a digital business ecosystem some services could be considered required component of basic infrastructure (e g. micropayment system, credit-card payment system,
fidelity card system) in others are included in the group sectorial or classification of basic services the three layers FN, September 2002 Digital Business Ecosystems page 14 even
in the local services. The following table presents the parallelism among natural ecosystem economic business ecosystem and digital business ecosystem, providing examples and showing the constitutive elements with examples.
, WTC regulations Basic protocols, network infrastructure TCP IP XML, ebxml organs Software components, business models Open source models, operating systems Simple species Grass, worms
, tiger Small organizations, universities, chambers o f commerce Basic e-services, Simple services Accounting sys, Payment sys, Groupware sys. Group
specific value chains Aggregated services CRM, ERP, user profiling Local ecosystem/s Savanna, j u n g l e/ecosystems of Amazonas Regional economy/multiregional economy L o c a l
d i g i t a l ecosystem/network of local digital ecosystems Digital environment+services for agrifood in 3 innovation nodes ecosystems Global natural environment
Global world business Network of digital ecosystems Network of local digital ecosystems for innovation The three facets The community,
Services and technological solutions, sharing vision, decisions and solutions that are able to share the infrastructure, together with the choices and the solutions, reaching the critical mass and the needed economies of scale;
are implemented in the local areas where that business activity is performed offering the three facets FN, September 2002 Digital Business Ecosystems page 15 services, solution, knowledge, training, methods for the local
forming a European digital business environment. This continuous exchange contributes to the ecosystems'continuous evolution.
which includes components and basic services, knowledge sharing facilities and as well as models for business process integration are the ITC instruments for building a networks of local communities evolving into a European network of small businesses and organizations.
The common basic network infrastructure and the basic services The generic technological infrastructure represents the basic dynamic building block for the development of the distributed network of local ecosystems
The distributed, open-source basic infrastructure is the common ecosystem environment and is composed by: the infrastructure:
network architectural modules which include the services which implements the standard protocols and the services
which allows the network communication, the interoperability and definition of common semantics, the dynamic webservices deployment, the seamless communication among the processes a set of basic e-services,
which could be used as basic component for developing solutions for different business sectors. The network infrastructure provides support in the definition
September 2002 Digital Business Ecosystems page 16 services/components/solutions of the ecosystem is a key functionality provided by the infrastructure.
in addition, the ontology mechanisms and distributed description services are considered as key components of the basic service network support infrastructure.
In addition to the basic services, a set of components and basic generic services not depending from a specific application sector could be provided by the basic infrastructure.
the knowledge sharing aspect and the business models and practices. Therefore, it also includes instruments for knowledge sharing, for knowledge basis setup, for community building, e-learning tools, support for e-learning and e training (in technology and in e-business),
All the modules, components, services and basic methodologies composing the infrastructure are implemented on a set of nodes of the ecosystem, distributed in the regions of Europe (the ones
and the distributed, fault-tolerant architecture guarantees the dependability of the system/subsystems/services. The sectorial services and solutions Above the basic infrastructure layer there is the sector specific layer,
i e. the digital species tailored for specific sectors or transversal application. Sector-specific ecosystems will pop up
and software components and services developed for that area of business appear. These components are based on a set of specific requirements in sectorial,
which describe the semantics of data, services, processes for that business sector Sector-specific education and training modules Knowledge basis;
business models; repository of practices, business solutions, regulations; newsletters The services, following the digital ecosystem philosophy are subject to selection and basic components sectorial components FN, September 2002 Digital Business Ecosystems page 17 evolution.
Several versions of similar services coexist, with different level of functionality, licenses, and costs. They follow the same natural selection mechanism,
they will continue to exist until will be a critical mass of active nodes implementing and supporting adequately such service.
Human or digital users accessing to the digital business ecosystem will see a global ecosystem environment
which includes all the generic and sector-specific components/services which they are authorized to discover based on needs and business agreements.
The technological infrastructure, the components, the services lives within a set of interconnected computer nodes based on the geographical areas
The local development will be fostered by exploiting the integrated digital environment and by mobilising all local players including local authorities, innovation and research centres, universities, consumers and trade associations, NGOS.
National and regional policies for a more sophisticated and widespread use of e-based services for reducing enterprises administrative overheads in accomplishing their administrative duties would create an incentive for many enterprises to faster adoption
(or the network of local communities) together with the distributed virtual communities, contributes to develop strategies, technological solutions, digital services, business models.
In a world of electronically available and purchasable services, virtually all barriers to becoming intermediaries disappear a process of natural selection will take place around profit to companies
and value to customers. 4. MEASURES AND INSTRUMENTS FOR DIGITAL BUSINESS ECOSYSTEM IMPLEMENTATION Objective The long-term objective is to create an integrated, distributed pervasive network of local digital ecosystems for small
which cooperate exchanging dynamically resources, applications, services and knowledge. It will constitute a global digital ecosystems environment able to continuously evolve aimed at fostering local economic growth through networked nodes of innovation.
This objective could be achieved by developing an innovative evolving generic infrastructure for the creation of business-specific ecosystems as result of synergies between European research and national and local innovation activities,
Clup-Clued, 1980 FN, September 2002 Digital Business Ecosystems page 19 management of the Chile's economy;
Shortage of knowledge, skill, entrepreneurship Actions: Creation of local competence centers on e-business and on the local sectors of activities (e g. for improving quality) building virtual learning communities sharing e-learning and e training modules knowledge basis including models
and e-business practice, benchmark implementation of digital business ecosystems Lack of technological solutions and of interoperability Actions:
use and promotion of standards sharing common solutions implementation of digital business ecosystems Investment/Costs Actions:
support for venture capital, investment forum Stafford Beer, Platform for Change,, John Wiley & Sons Ltd, 1995 23 Stafford Beer, Fanfare for Effective Freedom, Cybernetic Praxis in Government, The 3 rd Richard Goodman Memorial Lecture
. Walker, Robert W. Brennan, The Holonic enterprise as a Collaborative Information Ecosystem, on-line FN, September 2002 Digital Business Ecosystems page 20 5. ECOSYSTEM
which maximize the opportunities of success and selfsutainability of the ecosystems, should be identified. From an initial analysis several models seems the most suitable for the implementation to be used for different layers of the ecosystem:
an open source model adopting multiple business models; for the digital species of specialised ecosystem: encouraging the maximum coexistence and diversity of models and licences, supporting as much as possible the equal opportunities of service/solution publishing and fair competition;
for the local instances of the ecosystem: the models are decided by the local community on the basis of the local conditions.
Equal opportunities of access to the infrastructure, affordability for small organisations Selfsustainability Independence from a specific provider, technology, license Critical mass of services and of users Maximising the number of digital species
the highest interoperability and the possibility to reuse the preexisting information and services..Open source basic infrastructure To guarantee that the ecosystems attracts a critical mass of developers of services
and therefore of users, is critical to guarantee evolution and continuity of services in time within an open infrastructure.
The basic infrastructure represents the business tone which connects the applications and the services of the community,
it should provide the equal opportunities of business and visibility to all participants, and therefore its mechanisms should be transparent
The components the basic infrastructure The basic infrastructure of the common ecosystem environment is composed by the infrastructure network and by architectural modules,
These basic e-services provided by the ecosystem, could exist in different versions, with different level of complexity and sophistication, following different license models and costs.
September 2002 Digital Business Ecosystems page 21 These e-services will evolve as all the digital species of the ecosystem.
and discovery well supports the seamless integration of new components and services. For the services and components, specific training and knowledge sharing modules, knowledge basis, business modules, is fundamental for the evolution and selfsustainability of the ecosystem.
The user (or other digital species) could select the more adequate service or component (open source or proprietary), could substitute it as soon a more adequate one appears on the ecosystem,
provides the digital support for the economical development of small organisations fosters the private entrepreneurship on the sector of production of software components and services.
they will be disadvantaged further respect the large enterprises and compared to the other regions. The objective of an early adoption could be reached only thanks to a clear action plans and coordinated strategies at European, national and local level.
The European council held in Lisbon on 23/24 March 2000 recognised an urgent need for Europe to quickly exploit the new opportunities of the economy and in particular the Internet.
combined with the Commission's recent eeurope initiative as well as its Communication‘Strategies for jobs in the Information Society'28.
for promoting a favourable environment for the creation of new jobs, to boost productivity, to modernise public services,
and to give everyone the opportunity to participate in the global information society. eeurope 2005
therefore aims to stimulate secure services, applications and content based on a widely available infrastructure29. Where necessary and without distorting competition,
public financing instruments will give increased priority to supporting the development of information infrastructure and projects,
notably in the less-favoured regions. 30.28 Brussels, 13.3.2001-COM (2001) 136 final-Communication from the Commission to the Council, the European parliament,
environment. The success of the implementation depends at local level from the consensus and the active participation of the local players:
universities, research organizations, innovation centers enterprises (in particular SMES and enterprise organizations; government and of public administration The regions (or local areas) which succeed in the application of digital sectorial ecosystems,
are committed fully work together forming a community a critical mass of enterprises (including the small organizations) use the ecosystem as business tool.
coverage of the territory number of applications and services present diffusion and availability of the infrastructure.
and the competition, providing to the small providers equal opportunities to offer their services and products, stimulating the local technological knowledge and development.
or to make the huge effort to change to another environment. The risk to this dependence is one of the obstacles,
Local policies of education and training could help to develop a local entrepreneurship, which could go beyond the technical support, localization and the development of small local solutions, elements Local communities FN,
September 2002 Digital Business Ecosystems page 23 and could compete in a global market offering innovative components or services,
opening up alternatives to generate services of greater total value and a higher quality level, to the benefit of all involved:
These programmes include the DG Information Society's Information Society Technologies (IST) Specific Programme, DG Enterprise's Multi-Annual Programme (MAP
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