“CIRCULAR STARTUP TOKYO” is an incubation program that supports the establishment of startup companies specializing in the circular economy area. Participants will receive support from the program, which consists of incubation (kick-off, 4 circular incubation lectures), mentoring, and a Demo Day, and aim to develop businesses based on the premise of realizing a circular value chain.
Following the kick-off on April 16, the first Circular Incubation Lecture was held on April 23, with Kiyokazu Nasu, President of Circle Design Inc., and Shogo Minemura, President of Zoukei-Kousou Corporation, as lecturers. The up-and-coming startup executives spoke from their respective perspectives about the key points to keep in mind in the circular economy and the practice of design research. Here is a report on the lecture and workshop, which was held both at CityLab Tokyo and online.
What is the Circular Economy?
First, Kiyokazu Nasu of Circle Design, Inc., a company specializing in co-creation, consulting, research, and training services for the Circular Economy, gave a lecture. Nasu asked the audience, “What is the Circular Economy?” He posed the question, “Try to discuss it with the person next to you in two minutes.” A simple question, but the participants’ answers proved to be anything but uniform.
Why is the Circular Economy so difficult to understand? Nasu recalled how the concept of circular economy was born mainly in the academic world, then spread to the policy world, then to business, and how the definition has diversified. He also mentioned that one of the reasons why it is difficult to grasp the concept is that it is still at the stage of being introduced into the real world in a concrete form before it permeates the general public.
Here, Nasu quoted the Swiss architect Walter R. Stahel, who is said to be the originator of the concept of circular economy, as saying, “Circular economy is about caring.” He also suggested that “people” and “environment” are the objects of “caring” in Walter’s words.
He also explained how society, which used to satisfy needs and desires mainly through “goods,” is now transforming into a society that satisfies needs and desires through various means such as “access” and “community.” He expressed his hope for the contribution of the Circular Economy in an age where the focus is on the value of products and resources rather than on goods.
Kiyokazu Nasu, Circle Design, Inc.
Definition of Circular Economy
The international standard “ISO 59004,” which is about to be published soon, defines the term “circular economy.” In the lecture, he also introduced the definitions in various countries, including excerpts from the European Parliament, ESRS (European Sustainability Reporting Standards), the Ministry of the Environment’s 2021 White Paper on the Environment, and METI’s Strategy for Resource-Autonomous Economy.
Although there are some differences in the wording used in each of these documents, they all share the same goal of ensuring that products and materials are used as long as possible while maintaining their high value.
Importance of Systems Thinking
Nasu said that it is difficult to achieve a Circular Economy simply by circulating resources, and that it is important to promote circularization while taking a bird’s-eye view of business models, collaboration with stakeholders, and social systems. He also touched on the importance of “systems thinking,” which was discussed at the World Circular Economy Forum 2024.
For example, in large companies, it is important to cooperate with each department and consider what role their own department should play in the company, while in small and medium-sized companies and start-ups, it is important to look at the supply chain and the overall system and be aware of what they should be responsible for.
The “R Strategy,” an extension of the 3Rs
Nasu then introduced the “R strategy” as one of the tools for understanding the circular economy. This is a strategy for promoting the circular economy and is an extension of the 3Rs of “Reuse, Reduce, Recycle.” In addition to “Refuse,” in which a product becomes unnecessary by eliminating a function or providing the same function in a different product form, there are also “Rethink,” “Repair,” “Refurbish,” “Remanufacturing,” and “Recycle.” In addition to “Rethink,” “Repair,” “Refurbish,” “Remanufacturing,” “Repurpose,” and “Recover” are added to the 3Rs, for a total of 10 items, listed in order of circularity.
After introducing examples of community-based systems and systems thinking, the lecture topic evolved into the Circular Value Chain.
Considering Circular Design from Three Perspectives
Nasu explained that in order to avoid negative impacts in the value chain due to efforts focused on the circular economy, the three perspectives of carbon neutrality, nature positivity, and the circular economy should be considered in an integrated manner He stressed the need to recognize the need to promote circular design while integrating the three perspectives of carbon neutrality, nature positivity, and circular economy to avoid negative impacts within the value chain.
He also stressed the need to take a bird’s-eye view of circular design, and to look at what kind of partners to work with in business models and social systems, and how to work together to enhance the circularity of the entire value chain.
What is a measurement/evaluation tool for circularity?
Following the introduction of representative circular business models and case studies, the concept of measuring circularity was discussed.
As an indicator to evaluate circularity, the common indicators in evaluation tools such as ESRS (European Sustainability Reporting Standard) E5 and WBCSD (World Business Council for Sustainable Development) CTI (Corcularity Transition indications) are “In-flow,” “Out-flow,” “Strategy,” “Economics,” and “Economic flow,” ‘strategy,’ ‘economics,’ ‘circularity use,’ and “water, energy, and nature.”
Nasu concluded his lecture by introducing six typical examples of circularity assessment tools and answering questions raised by participants regarding circularity measurement and environmental assessment.
Design Research for Responsibility (To respond, design research)
Shogo Minemura of Zoukei-Kousou Corporation took the podium next, having studied circularity from a design background at Musashino Art University’s graduate school after participating in FABRIC TOKYO. The theme of his lecture was “Design Research for Responsibility.”
Shogo Minemura, Zoukei-Kousou Co.
The lecture started with “systemic Change.” Here, the term refers to “systemic change” from a conventional linear economy to a circular economy.
Minemura suggested that what is required of CIRCULAR STARTUP TOKYO participants, who will be responsible for systemic change in the future, is an awareness of “how the ecosystem is circulating and how it is not circulating,” as well as an attitude of seeking ways to “improve the entire ecosystem.”
Responsibility = Ability to respond
Minemura defined “responsibility,” which is also translated as “corporate social responsibility,” as “response” + “ability,” and defined it as “the ability to respond.” He said that he would like participants who are about to start a business to acquire this ability in order to take a sincere and reliable step forward.
Minemura then explained “vision-driven business development” in order to “respond.” First, the present is “backcasted” from the “vision,” which is the future scenario foreseen through past experiences, and from there “forecasting” is used to set how the business will proceed. However, in the present place, the social structure has “wicked problems,” nasty and complicated problems. From here, you will learn how to properly face and respond to the improvement of the entire ecosystem in such a current situation.
Importance of Defining the Right Problem
To recognize the importance of “defining the right problem,” Minemura first introduced the problem of mass waste in the fashion industry.
The Ministry of the Environment has identified the amount of clothing discarded by households as a problem, 480,000 tons per year. However, when comparing CO2 emissions in each life cycle of clothing, disposal actually accounts for only 1.2% of the total. The procurement of raw materials (46.8%), spinning (14.9%), dyeing (28.9%), and other processes before the garment is sewn together account for a total of 90.6% of CO2 emissions. Are we tackling the problem we really need to solve?” Minemura asked.
In Japan, the Japan Sustainable Fashion Alliance (JSFA) was established in 2021 to help apparel companies work together to achieve recycling. One of its commitments is to “reach out to suppliers and customers and strive for transparency in the entire value chain.” Minemura points out that this meant that until then, the current state of the apparel industry and the efforts of each company had been opaque.
While global environmental issues should be improving as a result of technological innovation, data shows that greenhouse gas emissions are on the rise. Minemura described the current situation as “irresponsibility” in which we have failed to set the right issues and identify solutions, and have taken measures in the dark without facing the dark patterns of the structural social and industrial systems.
Minemura spoke of the difficulty of confronting wicked problems for which there are no correct answers or standards, and of changing the system.
Design Research Methods and Specific Examples
Design has long been defined as “changing the status quo to a favorable state” and has also been referred to as “the foundation of human activity.” In the lecture, he also introduced the idea of “design attitude” as accepting uncertainty and ambiguity while creating new meanings for them.
Minemura emphasized that in the process of research, combination, concept/protype creation, and design, “research” refers to confronting chaos while moving back and forth to grasp the current situation, and that it is necessary to foresee the future through such research. As a concrete method for understanding the current state of the system, he introduced the Ellen MacArthur Foundation’s Butterfly Diagram as an example.
Minemura also presented the Circular Diagram, which was also exhibited at the event. Minemura, a student at Musashino Art University’s Graduate School of Art and Design, created this diagram by zoning the areas of “makers,” “sellers/users,” and “policy,” based on his own research to understand the current state of the fashion industry and to set future scenarios. He shared the structure of the diagram and the procedure for its creation.
“Circular Diagram” by Minemura
Minemura repeatedly watched videos of presentations by program participants. He gave comments and advice to the participants by incorporating each participant’s business into a map that illustrated the areas related to resource circulation, and by looking over the impact of each business and in what areas.
About Prototyping a Solution
After understanding the current situation in this way, from this point on, we need to consider what kind of concept to draw and what steps to take.
Minemura says that in the state of confronting issues that have become increasingly complex and for which the correct answer is not known, the method of making hypotheses and verifying them is incompatible and difficult. As for prototyping solutions, he proposed two ways of thinking: “abduction” and “effectuation.” Abduction is a way of thinking that first tries and finds a new hypothesis, while effectuation is a logic or thinking process that changes the way we see, viewpoint, and cut. He also introduced specific examples of effectuation.
In closing, Minemura inspired the participants by explaining that it is important to look ahead to a “vivid, concrete future” and take steady steps toward that future, rather than dreaming about it, through the process of conducting research.
Workshop
After the lecture, a workshop was held. Participants shared their impressions of the lecture, what they learned, and what they would like to apply to their future business development. Minemura gave advice to each participant at the venue and Nasu gave advice online, making it a meaningful time for building a recycling-oriented business model.
The following opinions, impressions, and business directions were shared among the participants at the venue and online, and Minemura and Nasu also exchanged comments with the participants.
- I thought that by gaining a deeper understanding of how the market fundamentally works, we could dispel the anxiety we had been carrying. At the same time, I was positive that if I could gain a deeper understanding of this area, I would have a fighting chance even without any background in industrial waste. (Ryota Namba / EcoLoopers Inc.)
- Until now, I have been making and selling many physical things myself, but in this project, we basically don’t make things. I believe that if we can value intangible assets, especially people’s trust and thoughts, it will become a circular economy. (Seiki Fukudome / LiNk LLC)
- Although I had a desire to solve water pollution, I realized that I was missing the perspective of how the industry as a whole should be made circular, including CO2 reduction. It is also important to look at what kind of risks occur. I would like to have a comprehensive and bird’s-eye view so that nothing is left out. (Hiroki Iwasawa / Water and Old House Co.)
Many expressed a desire to dig deeper into the ecosystem surrounding their own businesses and raise the resolution.
Minemura commented, “It is very important to absorb the good points gained from these horizontal connections and apply them to our own companies. As in the example of the effectuation, I hope that you will change the way you look at things, take in various perspectives, and acquire the skills to apply the good points of other companies to your own business.”
After a Q&A session and exchange of opinions with the lecturers, the first lecture came to a close.
The next lecture will be the second circular incubation lecture. The themes will be “Circular Economy and Business Models” and “Circular Economy and Startup Practice (2).”
In addition to the lectures, participants will have the opportunity to be mentored by a dedicated mentor and a specialist mentor to deepen their learning and promote their projects for the Demo Day. We look forward to seeing each participant brush up their skills!