General Motors’ approach to circular economy innovation
How casting a wider net can help organisations discover solutions to systemic challenges
It would be a wasted opportunity not to think of the entire circular economy, and this is the right time to do it.
Ken Kelzer, VP, Global Vehicle Components and Subsystems, General Motors
Amid a sweaty London commute, Transport for London does its best to lift the spirits of commuters with witticisms written on service information boards. A personal favourite at Southwark station one Monday read: ‘a perfect metaphor for life would be someone trying to stand in a hammock’.
That metaphor also illustrates the challenge a single organisation faces when trying to tackle any one of the world’s most pressing problems. Impactful solutions are neither impossible nor easy to discover and nurture. But just like the person in the hammock may need someone to lean on, an organisation trying to tackle today’s global issues is more likely to succeed through collaboration.
Fewer businesses than ever need convincing that collaboration is important in today’s fast-changing economy. Collaborative efforts foster innovation, provide a framework for scaling ideas, and enable a more effective and efficient journey towards shared goals.
Looking to create a platform for collaboration around critical global issues, MIT Solve describes itself as a ‘marketplace for social impact’. Solve aims to scale innovative work from concept to lasting, transformational change, by creating a space for businesses, entrepreneurs, NGOs and policy makers to join forces on critical issues. It connects big ideas with investment, and seeks to align ambitions.
Solve Circular Economy Challenge
One big idea that has gained significant momentum and demands collaboration is the move away from our current linear economy, in which we take, make, and waste 2 billion tons of materials each year. Instead, a growing group of industry and government actors and emerging innovators are calling for a circular economy, where waste is designed out, products and materials are kept in use for longer, and natural systems are regenerated.
Working to catalyse innovation to support this vision, in February 2019 MIT Solve launched its Circular Economy Challenge. The challenge seeks solutions that enable: increased production of renewable and recyclable materials for products and packaging; design and production of mass-market clothing that is recycled and recyclable or biodegradable at the end of its life; new business models that encourage extending the lifetime of products over frequent purchases; and recycling of complex products like electronics.
From hundreds of submissions, the winning ‘Solver’ teams have now been chosen and each awarded a grant of $10,000 to further their innovations. General Motors is among the sponsors, adding to the prize fund with a circular economy specific award of $50,000 for standout two teams.
Zero Emissions
The winning submission could even help General Motors achieve its ultimate ambition of zero emissions — one of three key targets that also finds the company working towards zero congestion and zero crashes on the roads. AIR-INK’s Graviky technology captures carbon waste and turns it into high grade printing ink. This not only helps reduce the amount of pollution in the atmosphere but it helps to reduce the black ink and coatings industry’s dependence on carbon black, which is usually made by the deliberate burning of fossil fuels. AIR-INK’s co-founder, Anirudh Sharma, commented on the Solve website: “We exist til the time fossil fuels continue to be burnt. We just hope we cease to exist hoping air pollution isn’t a problem anymore.”
Innovating towards zero emissions poses a significant challenge as it not only requires elimination of vehicle emissions, but also emissions that occur throughout manufacturing and use. This requires a different approach, and General Motors’ sponsorship of Solve is only one way in which the company is investing in innovation for a circular economy. Across its many departments, General Motors is undertaking a host of projects, targeting both short-term evolution and more speculative, forward-looking exploration.
“Emission requirements globally are going to be significantly different in 2025,” says Ken Kelzer, VP, Global Vehicle Components and Subsystems at General Motors and Key Executive for the relationship with MIT Solve. “It will drive probably the most radical change in mobility and vehicles globally that we’ve seen in a 100 years. It’s going to be dramatic. [We need to] look at what the implications of zero emissions are on the community, on the earth, on the entire food chain, from start to finish.”
A critical step in the move to zero emissions is the transition from fossil fuel based systems to electric solutions powered by renewable energy. Electric battery capabilities are therefore high on the innovation agenda and Kelzer says it is important that these batteries fit within a circular economy.
“The answer to the circular economy isn’t just in recycling goods, it’s in reusing goods,” Kelzer explains. “We know people are going to be using electric batteries, we know the impact on the environment, so when we ‘dispose’ of them, it’s not a landfill disposal, it’s a ‘how do you make them reusable?’ And we’re working hard to make that happen as we introduce our next generation of technology.”
The pivot of electrification is so significant, Kelzer adds, that “it would be a wasted opportunity not to think of the entire circular economy, and this is the right time to do it.”
The future of mobility
This ethos from General Motors has been furthered by its involvement in Solve, which Kelzer says has expanded the company’s “horizons to a diversity of thought”. General Motors is now considering new ways to create a vehicle and is also looking for different means of creating value as a mobility provider.
Decoupling material use from value creation not only aligns with a core principle of the circular economy, it also enables General Motors to be confident that a decline in vehicle ownership is not a threat to its business. Instead, it is an opportunity for the company to develop new business models and product offerings.
Consider how a vehicle is currently made and sold. Alongside safety, a top priority for a manufacturer is longevity. The manufacturer must build a vehicle that is robust enough to travel a great number of miles as well as providing the user with value for money, making sure they don’t need to go back to the dealer other than for simple maintenance. Each component that goes into the vehicle therefore needs to be designed and made with this in mind, from the materials used to the composition.
Now consider a future where the manufacturer doesn’t sell the vehicle to the user. Instead, they maintain ownership of the vehicle and provide this mode of transport as a service. This could be through short or long-term rental models or shared ownership. No matter what business model the manufacturer opts for, the composition of the vehicle can be formulated around new priorities. Instead of longevity, the manufacturer could opt for ‘fuel’ efficiency, for example, with lightweight materials taking precedence over robust heavier materials.
As Kelzer says: “If we control the fleet, we control the vehicle, and we service the vehicle […] We can decide on a different material that might be necessary and we could replace that more frequently. So we are actively looking at whether there are material selection differences if we control the vehicle for a period of time [compared to] if you give it to a customer and they just drive away in it.”
Though replacing materials more frequently may not immediately sound like it fits with a circular economy, Kelzer adds that this “gives us the opportunity to reuse something, or reuse materials. As a society, everyone’s been developing materials that last forever, and many times those can be harmful to the environment. What we’re trying to do is understand what those are, and maybe we have an opportunity here to replace, reuse, recycle and put things in our vehicles without always having to do new. It’s a real opportunity.”
With vehicle usage estimated to be as low as 8%, new business models that see the manufacturer maintain ownership could also result in higher utilisation. Less vehicles might need to be made while the manufacturer still has a reliable stream of income.
A shift to a circular economy is not about fixing individual problems in isolation. It demands a new approach to innovation that tackles different parts of the system simultaneously, and more organisations are realising that this requires new levels of collaboration. For brands like General Motors, open challenges like MIT Solve are one piece of a tapestry of innovation and investment designed to unlock the opportunities of a circular economy, today and in the future.
