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
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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
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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
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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
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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
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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
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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
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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.
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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
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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