2012-09-13 20:16:00

Gunter Pauli: "The world needs a new economic system - the best has to be the cheapest"

Longlasting problems of the world economy hit the wallet hard. Even ordinary people are forced to think about the change of the global economic environment, which seems to be inevitable. A good side of this tense situation is the fact that now the time has come to hear those previously called the dreamers. And perhaps finally use their ideas for the benefit of humanity, which has to find a way out of the impasse.

Gunter Pauli, who is an avid football fan and at the same ideologist of the blue economy and has numerous achievements in not traditional business models, agreed to a candid interview with ZN.UA.

— How long have you been working on the blue economy, and why?

— All my life I was looking for a new economic model. Since 2004, I’m working on the blue economy. Because I’m not satisfied with what we have now, we can live better. Level of unemployment is very high, too many poor people, bad food, weak health, a lot of damage to the environment.

— How can we fix this?

— Change the system.

— I wonder, how does the definition of the term «blue economy» sound?

— Let’s start with the green economy. It envisages that everything good for health and good for the environment is expensive. In today’s economy everything that harms the environment and health is cheap. And I am convinced we need innovations. We must do the best, and the best must be the cheapest. We need to change our way of production and consumption. And in the blue economy, the first thing what we use is cascading innovations. What do you do after having a cup of tea?

— Of course, throw out tea waste.

— And I grow mushrooms on them. And the rest I use as animal feed. This is the principle number 1 — cascading. It gives more profit and work. The second principle is «do it simple, do not make it complicated." We just do not need many things that we use. For example, in your voice recorder which you are holding in your hand you use batteries. However, the temperature of your body and the power of my voice can generate enough electricity for recording of the interview. Throw away your batteries, you do not need them. Many of our products can be much simpler. They will work longer, and thus become cheaper.

— Those are attractive ideas, but how to implement them?

— Step by step. You need a lot of initiatives and we can rework many industrial processes. For example, if I now need dentures, I go to the dentist, make an impression, send it to China. There they make titanium prosthesis, and I’ll get them only after two months. Long and expensive. Modern 3D technologies, plasma and Internet allow us to get the prosthesis quickly without any waste, water and transportation. Everything is used for 100%. Price is only half of that Chinese.

— I think every businessman tries to make the process in his sphere more simple and cheaper. Doesn’t he?

— But here we have a problem. We teach managers. They focus on one business in which they have experience. If the manager does not know about innovation, he will not use it.

— But there are consultants.

— Consultant — it is very difficult. He needs my proposals and innovations.

— In other words the blue economy is an economy of innovations? And there are people who generate these innovations.

— Exactly. A lot of innovations. We are very slow with them. The blue economy is high and rapid innovations. Example. The company «Unilever» is a major producer of tea. They have 3 million tonnes of waste, which is 1.5 million tons of shiitake mushrooms, or $ 7.5 billion (based on calculation 5 euros / kg). Why they do not grow mushrooms? Because they do not understand this. It is not their main business. They do not have a strategic plan. Entrepreneurs can make this and they are changing the economy.

— But how to implement it? Some people have a business, and it is possible that they don’t need the ideas of others…

— I present an open business model. And if people say that they want to learn this, I help them. In India, we specially taught people to grow mushrooms on tea waste.

— This means that any businessman can ask you for the idea?

— We provide information through the Internet, and every week there is a new example of such a business. You can already see 93 examples. Next week there will be another one.

— And if the entrepreneur finds one of the options suggested by you suitable for him, how can he use it and under what conditions?

— Be my guest. Because entrepreneurs must share good ideas. To let you know, there are 15 cities around the world with farms growing mushrooms on tea and coffee waste.

— Is Kiev in this list?

— Not yet. But there is Amsterdam, Seoul, Sydney, Paris, Berlin, San Francisco…

— But if no one pays for ideas, where to get money for your needs?

— I publish my book, «The Blue Economy», and I have a lot of freedom. In addition, a number of websites are available. The book was published in thirty-five languages. In Ukraine, it was published with the support of the Risk Reduction Foundation. Also I write stories for children. I turn great ideas for the blue economy into the form of a fairy tale — if the child understands it, everyone will.

— Which of your ideas could give a significant effect when used in Ukraine?

— You are very dependent on gas from Russia. Meanwhile, you do not use that gas, which you have. Example. You have dirty water. There are solid organic wastes that are disposed of to the fields. This biological waste is about 50% of all waste. We get water and organics togethre and get methane gas. Thus, 100 thousand people produce 15 thousand cubic meters of methane per day. There are about 45 million people In Ukraine. Every day they produce waste, which can create about 7 million cubic meters of gas. Every day and at all times. It is 2.5 billion cubic meters for the year. This is your imports from Russia. And you pay billions for it.

— What do we need to implement this business model? Maybe we should offer it to the Government of Ukraine?

— I’m open source.

— And what else is needed?

— You have a water treatment, which costs money. There are waste fields, which also costs money. This is green economy. But by combining them together, Ukraine, on the contrary, will receive money. And this is the blue economy.

— Economic crisis and problems create a sense of the end of the world, or at least the end of the world economy even in developed countries. It seems that humanity must now move to another stage of development, otherwise — just catastrophe. Perhaps the blue economy is the way out (or one of its components) of a critical situation?

— The current economic model is globalization. It envisages competition, the constant increase in the production, standardization, job losses… This model has no future. It’s obvious. Because there are too many unemployed, too much waste and poverty level is to high.

— How the model of blue economy solves these three problems?

— First we’ll start with what we have. There is tea, coffee, waste… Today we have a lot of things that take money. But we need to turn that into making money. Changes are needed. We believe that water treatment is worth of ccosts. We want to drink water, so we pay for it. In the blue economy model, water treatment and energy makes a profit. Therefore we take all what we have, and create a lot of extra income. Of course, taking into account local needs. And even if the methane gas produced by the «blue» model, will at first be more expensive than the Russian, it is beneficial for Ukraine.

— Why exactly?

— The economic phenomenon is multiplication. If I have money and I pay you and you pay them to someone other, the money are circulating in the local economy, and economy is growing. If you pay money to the Russians, money get out of the country, so there is no multiplication, and the economy is in decline.

— Recently in the world, and in Ukraine in particular, wind and solar energy have become very popular. Wind turbines and solar panels are being built in the fields. Is this also a component of the blue economy?

— In fact, it is very expensive. If you are rich — do it. If you have as much money, as the European Bank for Reconstruction and Development, use them. I believe that the good thing should be cheap. Conversion of solar energy into electricity is very expensive.

— What do world business schools say about your unconventional ideas?

— Until last year, they said that Gunter Pauli is a dreamer and what he proposes is unreal. But students are curious. Also, I have more then a hundred examples of new business models in my arsenal, that is why business schools invite me.

— Do you read your own courses to the students?

— Yes. The day after tomorrow I will be in Hungary with special courses for professors and businessmen. Now I see a change in attitude to my ideas, because the economic crisis has got on nerves. The modern economic system is based on the Bretton Woods system, the Chicago School of Macroeconomics and Harvard management. This trio dates back to years 1944–1950. It is an old structure. We need something better and new, because the world has changed.

— But who are those people who generate ideas for innovations and implement them?

— First, good scientists. They are the key to something new. Every new idea needs a strong scientific support. Second, a lot of enterprising people. After all we need someone who would take the risk. I’m happy that I know many scientists and entrepreneurs.

— To your opinion, how long does it take to replace the current world economic model with blue model?

— One generation, or about twenty years. It is about changing the way of thinking. We must use resources and materials which we have, and do more.

— Is there active or passive resistance to this scenario?

— Yes, there is, and very active. Of course, those who make money in the current system, do not want no changes. But it doesn’t matter, they’ll go bankrupt, because thousands of small initiatives are much more powerful than a single large corporation. That is why I talk to many people in different parts of the world.

— Is your audience a small business?

— It is mostly family business, because it has a long-term vision of the development. In contrast, a typical large corporation is guided by short-term vision. It is therefore more profitable for me to work with large and small family companies. For example, Bosch and BMW in Germany. A lot of family businesses in Japan. Many oligarchs have family corporations.

— What success have you and the blue economy achieved?

— I’ve just started, and we can talk about small success. I think, significant improvements can be visible in ten years. I have indicators of the correctly chosen path. 15 thousand people are earning money, simply by growing mushrooms on coffee and tea. I don’t think this is a success, because the potential here is 50 million people.

— But do you feel difference between 2004 and 2012?

— A significant difference. In 2004, it was said that the implementation of the model of methane production from waste water and organic is impossible. In 2010, the idea became a reality in South Korea. A successful project. Numerous delegations from different cities of the world constantly come to Korea. Every week — government officials. Why? Because the project can fundamentally change the city’s budget, expenditures are turning into a profit. Instead of importing energy we produce it ourselves. And this energy is renewable, its production never stops. This is the true beginning of transformation.

— There are many inventors who are knocking at all available doors to implement their ideas. But nobody opens the door. How do you manage?

— In this case, we need someone who will turn good ideas into successful business. Science can not do it on its own. We need a business model that will be able to compete, and what is better, to be out of competition with the existing business model. My role is to create a business model which is out of competition with a modern model.

— In other words, there are three components in this case: science, business, and you — the designer of blue business model?

— But I’m nothing compared to the other two components.