Berlin as a beacon for a circular economy?

TEXT
Christian Lautermann, Institut für ökologische Wirtschaftsforschung (IÖW)
Siegfried Behrend, Institut für Zukunftsstudien und Technologiebewertung (IZT)

The goal is to generate more growth, employment, and tax revenues – in short, economic prosperity. Metropolises in which start-ups thrive, unicorns are born, and tech corporations settle are considered particularly sexy. Whether high-tech innovations mean real social progress or whether they are actually based on new forms of exploitation often remains an afterthought.

Economies between tradition and future

Is the model of a sustainable economy, on the other hand, a suitable flagship for an innovative metropolis? With its diverse sustainability initiatives, our capital Berlin seems predestined to replace the theme of international location competition with an economic culture that encourages a socio-ecological reorientation. But it’s not enough simply to add organic supermarkets to discount stores, replace gasoline-powered cars with electric vehicles, and have a few “green” start-ups.

Not the same in green, but different

Instead, a sustainable economy requires that economic structures, forms of organization, and exchange relationships be designed in a fundamentally different way. On the one hand, this means building new kinds of companies that differ significantly from the conventional models: They pursue a balance of solidarity both internally and externally, they enable democratic co-determination and participation for the people involved, and they are uncompromisingly oriented towards social and ecological goals. Second, the network in which companies, their suppliers, and customers are integrated must change – instead of a one-way street, integrative and cooperative relationships between economic actors enable the sustainable recycling of valuable resources. Alternative business forms and the circular economy are two promising approaches to a sustainable economy that have great potential in an urban context like Berlin. Alternative economies can be defined as those economic practices and forms of enterprise that deliberately do things differently from what is otherwise the norm in the capitalist market economy. They exist in diverse forms that have emerged – and continue to emerge – over several decades in all vital economic sectors.

What they have in common is that social values and ecological demands are decisive for economic activity. Thus, as early as the 1970s, alternative businesses emerged that not only organized collectively in solidarity, but also, for example, showed themselves to be eco-pioneers by providing organically-produced food – such as the women’s collective Kraut und Rüben which has existed as an organic food store in the Berlin district of Kreuzberg since 1978. Then, in the last decade, Berlin has become the breeding ground for a new generation of alternative businesses. They go by the term social entrepreneurship. What they do differently is that they develop innovative business models in which the social or ecological purpose of the economic activity is permanently and primarily enshrined in the company organization. The most famous example is the alternative Internet search engine Ecosia, which systematically uses its advertising revenue to invest in climate protection projects such as tree planting. The diversity of alternative economies also includes approaches that experiment even more fundamentally with alternatives to the prevailing economic system. The new Circles initiative, for example, is working on nothing less than the development of a new decentralized monetary system. Based on blockchain technology, it aims to enable an unconditional basic income by using relationships of trust between economic actors to collaboratively build local economies.

The path to circular economies

Sustainable local economies require circular economic structures. The next generation of the circular economy is emerging, particularly in urban areas. It includes new economic practices such as innovative repair concepts, swapping and lending platforms, re-commerce, intermediary exchanges for shared use of goods, and much more. In Berlin in particular, a diverse innovation landscape has emerged in recent years. In the area of re-use, there are around 340 players. Among them are numerous second-hand stores, clothing stores, book-sharing tables, social department stores, and so on. The city’s municipal waste service, the BSR, operates a second-hand store called NochMall. Those active in the sharing economy range from commercial platforms to initiatives for the common good (e.g., Fairleihen). As drivers, idea generators, and implementors of the idea of the circular economy, there are numerous networks (such as the Kreislaufwirtschaft Berlin-Brandenburg or CRCLR), initiatives (such as the Haus der Materialisierung or the Circular Economy Tours) as well as actors from business, science, politics, and civil society (such as the BluehouseLab of ALBA, Circular Berlin, the Cradle to Cradle e.V., and the InfraLab of the BSR).

Exklusive Anzeigen aus der Printausgabe

This then leads to the question: If a city has such promising approaches to a sustainable economy – how can it then use their potential to develop as a radiating force for alternative economies? Berlin’s politicians have made initial attempts: For example, the Senate Department for Economics, Energy and Public Enterprises has launched pilot funding projects – “Social Innovation Capital” and “Social Economy Berlin” – for a broader group of alternative economy players, operating under the banners of “social” and “social solidarity economy.”

Amsterdam and Brussels are further ahead

However, other European cities are already a bit further ahead. In the Netherlands, Amsterdam is pursuing the declared goal of becoming a pioneer of an “impact economy” and since 2015 has successively built up the city’s funding initiative Amsterdam Impact. The aim is to strengthen the “ecosystem” of all companies that can be assigned to the field of social entrepreneurship. The CoopCity project in the Belgian capital Brussels has a similar thrust. Since 2016 the city, in collaboration with seven partner organizations and with EU funding, has introduced a programme to promote the establishment, development, and cooperation of social enterprises.

In order to keep pace and even develop its own profile as an international pioneering city, Berlin could focus more strongly on the model of sustainable economic activity. A corresponding support programme should focus on the diversity of alternative economic forms for a socio-ecological transformation. In addition to classic instruments of economic promotion, this includes the deliberate facilitation of open spaces, playgrounds, and fields of experimentation, including for more radical alternatives – such as the idea of an urban real laboratory for socio-ecological transformation, as proposed by the Transformation Haus und Feld initiative from urban civil society for the former Tempelhof Airport. It would be important to create a comprehensive, networked infrastructure for alternative, circular forms of economy and consumption (repair, re-use, or upgrade) in the neighbourhoods and close to residents in department stores, markets, libraries, sports facilities, and schools. In order to establish Berlin as a Circular City, the existing niches must enter the mainstream by synchronizing demand and supply more closely.

Programme tips

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ESMT Berlin, Leibniz-Institut für Wirtschaftsforschung Halle (IWH)

Dr. Christian Lautermann is head of the research field Corporate Governance and Consumption at the Institute for Ecological Economy Research (IÖW). His work focuses on sustainability management, social / sustainable entrepreneurship, corporate responsibility, and alternative economics.

Dr. Siegfried Behrendt holds a degree in political science and a degree in biology. He has been working at the Institute for Futures Studies and Technology Assessment (IZT) since 1990 and has been Head of Research for Technology and Innovation since 2014. He focuses on the early detection, analysis, and integration of risks in innovation processes as well as on the design of transformation processes.