Sustainability 4.0 – Making the Digital Economy work for Sustainability

Session at the 3rd Academic CSR Summit, Ludwigsburg (Germany), 5 April 2017

byKarlshochschule International University, Karlsruhe (Germany)

  • Overview

The combination of Sustainability and Digitalization for solving environmental, social and economic problems seems both promising as well as old hats. Most of us remember the 1980s and 1990s with their call for ecological modernization, not to be confused with the ecomodernists of today. If the digital revolution can be sustainable, moreover, if it can become an enabler for a more sustainable world remains up in the air. With the term Sustainability 4.0 we intend to provide a novel approach to these issues that goes beyond smart metering or energy efficiency while, at the same time, avoiding the voluntarist delusions of green growth proponents and ecomodernists. Sustainability 4.0 in our reading implies the empowered co-creation of prosumers in order to re-shape economy and society towards social inclusiveness and ecological soundness.

  • Format

We will explore the convergence of Sustainability and Digitalization with three input talks of about 20 minutes each followed by a joint plenary discussion of 15 minutes, with a total session time of 75 minutes.

  • Input talk by André Reichel, Professor of Critical Management & Sustainable Development:

Sustainability 4.0 – Towards a New Convergence of Sustainability & Digitalization

As the fundamental principle of the digital economy is co-creation, Sustainability 4.0 implies the empowered co-creation of prosumers in order to re-shape the economy and society towards social inclusiveness and ecological soundness. It starts with products and processes like smart cities, 3D printers, makerspaces, zero waste and smart trash; but it goes far beyond that and encompasses two economic paradigms for this ‘Great Sustainability Transformation’:

  1. Sharing Economy: predominantly commercial oriented co-creation, provision and use of sharing services as in carsharing, tool sharing, couchsurfing, co-working and the likes. The sharing economy is still focused on competitive economic action based on the accumulation and use of (mostly monetary and production) capital under a market governance regime(Heinrichs, 2013; Martin, 2016).
  2. Commons Economy: predominantly cooperative oriented co-creation, provision and use of more localized services as in repair cafés, makerspaces, urban farming/gardening, local exchange trading systems and the likes. The commons economy is focused on cooperative economic action based on reciprocity and some form of redistribution of value, power and decision; on democratic governance in a cooperative culture (note: you don’t have to be a cooperative to work like a cooperative); and being, at least partially, autonomous from markets and more oriented to self-sustaining(Helfrich & Bollier, 2012; Ostrom, 2010).

The underlying mindset of both paradigms is using and (partly or fully) co-creating a service that is needed in order to reduce material consumption, throughput, and product ownership, while at the same time connecting to others and forming a community of prosumers. The sharing economy is insofar a step from the existing ‘Now Economy’ to a ‘Next Economy’ (Reichel, 2015, 2017)where a commons orientation plays a more dominant role in everyday economic and social life, while economic growth loosens its grasp on our imagination.

References:

Heinrichs, H. (2013). Sharing economy: a potential new pathway to sustainability. Gaia, 22(4), 228.

Helfrich, S., & Bollier, D. (Eds.). (2012). Wealth of the Commons: A World Beyond Market and State. Amherst, MA: Levellers Press.

Martin, C. J. (2016). The sharing economy: A pathway to sustainability or a nightmarish form of neoliberal capitalism? Ecological Economics, 121, 149–159.

Ostrom, E. (2010). Beyond markets and states: polycentric governance of complex economic systems. The American Economic Review, 641–672.

Reichel, A. (2015). What’s Next? Wirtschaften jenseits des Wachstums.In Zukunftsreport 2016 (pp. 110–135). Frankfurt am Main: Zukunftsinstitut GmbH.

Reichel, A. (2017). Shape of things to come: From the «Laws of Form» to management in the postgrowth economy. Ephemera: Theory and Politics in Organization, 17(1).

  • Input talk by Melodena Stephens Balakrishnan, Professor of International Marketing Strategy & Entrepreneurship:

Tech Entrepreneurship to leapfrog developmental challenges and create sustainable societies

While there is no turning back on technological evolution, the sad reality is there is a divide in social development that aid and governments are still unable to fix. Whether you are looking at the impoverished at the bottom of the pyramid, or the marginalized or disfranchised, there are opportunities for sustainable developmental growth. Entrepreneurship will remain a backbone for economies and perhaps we need to look at how to transition to the concept of community-based enterprises (Peredo and Chrisman, 2006). This talk will introduce three perspectives of how technology and entrepreneurship can be a game changer in a rapidly modernizing world using a variety of cases (Balakrishnan and Lindsay, 2016).

  • Technology as an enabler of social development

According to the 2017 “Better Business Better World” report, the opportunity for Global Goals is worth US$ 12 trillion. There is no doubt as the world moves from crisis to crisis, aid is inadequate and even impact investors are getting impatient.

  • Technology to spearhead governance for greater transparency

The advent of blockchain raises interesting possibilities for governance and transparency – problems that plague development work in fragile countries and the ones laden with bureaucracy. (World Government Summit and Consensys, 2017).

  • Technology to facilitate measurement for impact

Making sure you “Do Good and Do no Harm” is not easy and the fact many organizations plan CSR for one accounting year means long-term good intensions may not translate positively to sustainable development and do more harm than good. Measurement is complex as studies show (Holt and Littlewood, 2015).

References:

Balakrishnan, M.S. and Lindsay, V. (2016), Actions and Insights: Middle East North Africa (Vol. 5): Social Entrepreneurship, Emerald Group Publishing: UK. ISBN-10: 1786354403, ISBN-13: 9781786354402.

Business & Sustainable Development Commission. 2017. Better Business Better World, London.

Holt,D. and Littlewood, D. 2015, Identifying, Mapping, and Monitoring the Impact of Hybrid Firms, California Management Review.57 (3), 107-125.

World Government Summit and Consensys (2017). Building the Hyperconnected Future on Blockchain. Available: [Accessed 14 February, 2017].

Peredo, A. M., & Chrisman, J. J. 2006. Toward a theory of community-based enterprise.Academy of Management Review,31(2), 309-328.

  • Input talk by Dirk Wagner, Professor of Strategic Management:

Human (F)Actor Management – Cornerstone of Sustainable & Responsible Organizations

The digital domain increasingly changes, enhances, complements and substitutes the human workplace. As with technology in general, traditionally the focus has been on the development of digital tools that serve an organisation’s purpose. To the extent that machines more and more become actors in their own right, they do not only compete more often with human labour. Increasingly, they also influence human action, and as such sometimes enhance options and on other occasions limit options available to humans (Carr, 2014).

Put broadly, the consequences up to this stage have been significant economic development on the one hand (Brynjolfsson and McAffee, 2014) and a considerable deterioration of the mental health of the workforce on the other hand (Wagner, 2015). The latter point is problematic, at least for humans. Whilst the digital transformation has only just started, increasing dynamics suggest that it is advisable to shift at least some of the focus from the digital tools to the human (f)actors. Today, companies and organisations in general claim that employees are their most important resource. With machines developing at unprecedented pace, from a purely economic perspective this might change in the future (Bostrom, 2014). But in order to ensure a sustainable economic and social development, there is a need to ask in fundamental ways what the strengths and the weaknesses of human (f)actors in our companies and organisations are and how we have to position them in the increasingly digital domain of the workplace and in the more and more digital systems of economic value creation. Companies that gain this understanding increase their chances to achieve sustainable competitive advantage. This presentation introduces the human (f)actor management framework.

References:

Brynjolfsson, E.; McAfee, A. (2014): The second machine age. Work, progress, and prosperity in a time of brilliant technologies. New York: Norton & Company.

Carr, N. (2014): The glass cage: Where automation is taking us. New York: Norton & Company.

Bostrom, N. (2014): Superintelligence: Paths, dangers, strategies. Oxford: Oxford University Press.

Wagner, D.N. (2015): The Tragedy of the Attentional Commons – In Search of Social Rules for an Increasingly Fragmented Space. In: Journal of New Frontiers in Spacial Concepts, KIT Scientific Publishing, Vol. 7(2015), 31-41.

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