What if all startup accelerators promote circularity?January 18, 2022
What if all startup incubators and accelerators integrated design principles that foster circularity? How will this look like and how will it impact ventures going through these programs?
At Impact Hub, we have been exploring these questions over the past 12 months. Here’s what we have learned so far:
As of 2020, only 8.6% of the global economy is circular
For Impact Hub it is clear that we need to move away from the standard business practice of take-make-waste to a planet-friendly loop. Why? Here are three key reasons:
1. Electronic waste worth USD 63 billion is generated globally each year – of which only 20% is collected and recycled under appropriate conditions.
2. One garbage truck of textiles is landfilled or incinerated every second – representing a lot opportunity of USD 100 billion annually.
3. 75% of municipal solid waste consist of discarded consumer goods – of which 80% is burned, landfilled our dumped because of poor design and/or lack of end-of-life collection options.
*Source: Ellen MacArthur Foundation.
Small and growing businesses driving the transition to circularity
In the startup and venture world, there are two options for integrating circularity. Either right from the start (circular natives) or by shifting your existing venture later on (circular adapters).
Circularity-focused incubation and acceleration programs already exist, but there are two problems:
1. There aren’t enough of them to transform the private sector as a whole.
2. Mostly, startups that already identify with the concept of circularity join them.
This way, the transition to a regenerative economy is going to take decades. But the time to act is now. We need to mainstream circular design principles across all small and growing businesses regardless of whether they are social, environmental or profit-driven.
What if all venture support programs integrated circular design principles?
Within a year since we asked this question, we went from an idea to a toolkit to design a training. At the moment, 12 pilots across Africa, Asia, Europe, and Latin America are integrating circularity into their programs.
The circularity toolkit Impact Hub produced will be shared in 2022, when all tools & materials are tested, but here is a first taster.
Impact Hub is committed to a collective environmental action
Impact Hub’s mission is to bring about a just and sustainable world where business and profit are used in service of people and planet. Our ambition for 2030 is to shape the business of the future by pioneering new models to foster financial health, wellbeing, environmental action and social inclusion in all that we do. Accelerating the transition to a circular economy that respects planetary boundaries will help us realise this ambition.
As many other organizations in the small and growing businesses sector are also committed to environmental sustainability, it is becoming a collective effort. We would like to contribute to it by sharing our resources, data, insights, offering training opportunities to other enterprise support organizations, and exploring further opportunities to collaborate.
Early promotion of circularity = increased adaptation
Our key assumption is that training all small & growing businesses regardless of whether they are social, environmental or profit-driven on circularity and circular design principles is best at an early stage, when business models are still flexible, and will lead to increased adoption of the concept.
If the majority of new businesses become circular over time, they will contribute to breaking the take-make-waste cycle and accelerate the transition towards a regenerative economy.
For this to happen, incubators and accelerators – the prominent supporters of small & growing businesses – need to integrate circularity training and circular design principles in their services. And this shift needs to happen across the globe.
Impact Hub, as a global, locally-embedded network spanning 60 countries, is a great platform to explore how this could work in various local and regional contexts.
More than 80% of a product’s environmental impact is determined at the design stage. – Ellen MacArthur Foundation.
We rolled up our sleeves and got amazed
Our long-term partners, the DOEN and MAVA Foundations, saw the potential of this approach and decided to support this explorative initiative. Impact Hubs in 12 countries (Rwanda, Tanzania, Senegal, Zimbabwe, Nigeria, Greece, Spain, Turkey, Croatia, China and Colombia) joined as first movers. We also invited other business development service providers to the journey to learn if our approach works outside the Impact Hub network and took three key steps:
1. First, Impact Hubs explored the current state of circularity in their country. For example, we found out that Rwanda has a Circular Economy strategy and puts environment and climate action at the heart of all the country’s policies and plans. While Tanzania and Zimbabwe do not have such circularity strategies, although the concept itself has been in practice for centuries. This initial mapping also allowed us to focus on the most relevant industries and value chains such as agriculture & food, plastic packaging, and waste management.
2. Training the Impact Hub staff on basic circularity concepts, such as the Butterfly Diagram and the Disrupt Framework, and how those can be integrated into enterprise support services and programs. A practical toolkit and various online training modules were co-created with a number of Impact Hubs and partners who have been promoting circularity for many years.
3. At last, the work really began: integrating circularity in the local programs, finding local experts to support and working with ventures ready to jump in. And this is happening right now!
Starting with 80 ventures in 12 programs
Each of our pilot programs focuses on different industries based on the local context. From health to waste management, agriculture to education, or technology to transport and manufacturing. By the end of April 2022, 80 ventures will go through the programs, becoming more sustainable and developing or adjusting their products and business models to become circular. This is just a pilot – imagine taking this to the next level with thousands of enterprises going through this transition.
Integrating circularity into 200+ programs in the coming years
Right now, it looks promising that increased education and support to integrate circular design principles will lead to more and more small & growing businesses becoming circular.
While we will measure the results and see how many ventures integrated the concept successfully, we are already thinking about scaling this approach. We hope to do it in the Impact Hub network, which runs 240+ incubators and accelerators across 60 countries.
Equally important is making the training and toolkit accessible to other incubators and accelerators across the world. The transition happens when the majority of business development service providers integrate circularity and support small and growing businesses to make the transition.
We are ready to see a shift towards circularity and a regenerative economy. Are you?