Achieving the Circular Economy via the Fluidity System

Andrew James Fynn, Ecosystem Economist

fluidity

Is The Circular Economy Needed?

If you had to design the Industrial Revolution, the design brief would be
Create a system of production that:

Puts billions of pounds of toxic material into the air, water, and soil every year
Produces materials so dangerous they will require constant vigilance by future
generations

Results in gigantic amounts of waste

Puts valuable materials in holes all over the planet, where they can never be
retrieved
Requires thousands of complex regulationsto keep people and natural
systems from being poisoned too quickly
Measures productivity by how few people are working

etc.
Cradle to Cradle, Braungart & McDonough 2008

How Can We Achieve Circularity?

We live in a world of finite resources

We are a responsive species

We have the technologies and the intelligence to solve the problems

associated with achieving circularity (cradle to cradle)
Challenges and opportunities on the path to achieving circularity:

habits, cultural, institutional, educational

proof of concept, peer pressure and leadership

economic barriers and challenges

These can all be addressed through a single system - the largest one
we share: the economy
5

Transform Not Replace

We are all dependent on the status
quo
The status quo is intolerable
We have to arrive at a very different
place
The way to get there is not to throw
away the current system

It is to transform it
GDP currently measures activity,
not benefit
Transform the currency and you
transform the economy
6

Hybrid System Needed

What you can predict you can
improve.
We need to stabilise but also
improve the current system.
Thus we need a new system that transforms the
current one into one that is circular, sustainable on every level. That gives us a hybrid.

Lets give the economy a brain.

7

What Does This System Look Like?

Nature achieves huge
change on a tiny scale
This change is multiplied
up millions of times
Why not do the same thing for an economy Change the nature of the transaction
Use the economy to change the economy
8

Current System - How Did We Get Here?

Current economic system is
patchwork
Made of past responses to past
situations
which no longer exist
Those responses are not integrated
It has not been designed in the present for the future
It does not make use of systems now available
in a joined up way

Big Data and ICT

9

For The First Time In Human History

Create a purely digital currency

Incentivise the flow of money
No risk of counterfeiting
We can understand this currency better than any
other in history
And we can use it to create the circular economy
10

Shifting Our Incentives

Why do you spend money?
Why do you make any decision?
We have incentives in one direction
and incentives in another
These form the decision-making landscape
The net balance of incentives determines which option is
chosen
Our decisions follow predictable patterns: it is possible to
stacking the decision-making landscape with short term
incentives aligned with the long term good
11

Gearing
Each transaction in the system has has two components:
Fluidity + National currency
The Fluidity currency is geared to the national currency
This ratio used is the Gearing Ratio
Gearing ratio is set by the seller (allowing innovation)
Buyers receive credits at little or no cost
Buyers save money by using Fluidity
Sellers make money by using Fluidity to increase business
and leverage higher income
Only products and services with higher embodied
circularity can participate
12

Accumulation
There is something else you can do
with a digital currency:
You spend 10 credits, the seller receives 11
credits. An auto generated increase.
This provides organic growth of the system
and rewards participation
This is the Accumulation Ratio
It is set by the governing agency

13

Evaporation
Another feature to accelerate circularity
outcomes
Money is more valuable to the whole when it
moves faster (velocity)
Incentivise velocity by reducing the value of
stagnant credits, along a curve
This feature is Evaporation
Evaporation and other factors can be adjusted
by sector, region, time and other conditions
14

The Ecosystem Economy

The onward flow of credits
stimulates further movement of
national currency
Credits flow from one sector to the
next
Improving circularity in the supply chain
Incentivising circularity by
positively affecting expectations
positively affecting behaviours
15

Big Data
Fluidity provides a vast number of data
These are not just read-only data
They are hands onto the economy
Suddenly we are no longer blind operators of the
most powerful machine on Earth

(c) Fox Corp. 2009

16

Sharing Best Practices

The value of these data
to sellers is greater than
the value of keeping best
practices to oneself.
Sharing best practices is incentivised - within and
across sectors
Thus the economy improves
Sustainability can no longer be said to be
the most expensive option

17

Threading The Needle

Wealth defined as the ability to obtain the things you need and desire
As innovative uses of credits are found, cash + credit incomes increase
beyond the baseline
The new momentum drives the transition to the circular economy
18

Feedback Loops & Snowballs

Over time there is ever greater sophistication,
responsiveness and scale
Fluidity becomes a more and more powerful
engine for change
- for sustainability in a truly holistic sense
Each of the variables available for adjustment
represents another dimension in facilitating
change
The algorithm used works in the same way as an
ecosystem model, self-improving
19

Summary
The more inclusive an ecosystem, the more
beyond sum gains realised
The intelligent economy is the
collaborative economy
The system will only get smarter
There is nothing to stop us from greatly
accelerating circularity
We should do that
20

Next Steps
Join us on social media

Check out the information provided via the links

Make Fluidity a point of discussion in your community,

business or sector

Write to your government representatives asking them to

adopt Fluidity

Email me with any further questions

If you are in a position of influence, contact me

Also email for newsletters with the progress of Fluidity

21

Be Social
Email FluidityEconomic@gmail.com
Like facebook.com/FluidityEconomic
See papers and this presentation at
scribd.com/andrew_fynn_1
This video at bit.ly/1LFtIj4
Blog: fluidityeconomic.blogspot.co.uk
twitter.com/AndrewJFynn
Google+ page: bit.ly/1QSkovI
Thank you
23