Aihearkisto: Articles in English

Good practices in bio-based circular economy in Vietnam

Circular economy is raising interest all over the world. In a bio-based circular economy, material and nutrient flows form loops. The article presents selected Vietnamese good practices in bio-based circular economy.

Authors: Vie Huynh and Susanna Vanhamäki

A brief overview of bio-based circular economy

Limited natural resources and climate change are driving us towards new economic and ecological solutions. Circular economy offers one answer to these challenges. In the current linear economy, natural resources are transformed into products and then dumped into the environment after being used. In a circular economy, however, material flows form loops: material is recycled for other purposes after usage. (EMF 2013)

The circular economy consists of biological and technical flows (EMF 2017). The bio-based circular economy concentrates on material in biological cycles, i.e. the circular use of bio-based resources e.g. bio-waste, wood products, wastewater sludge and agricultural residues.

Recently, circular economy has been adopted in international and national policies, showing that these nations are moving from rhetoric to action. In 2015, the European Commission (2015) released the Circular Economy Package, an action plan concerning the EU’s transition towards a Circular Economy. In addition, China and France have laws concerning circular economy (Balkau 2017). Nevertheless, in addition to strategies on national level, concrete actions are also necessary. In fact, in quite many cases, this is where the development begins.

The country discussed in this article, Vietnam, is at a stage where circular economy is not yet in strategic focus. However, local circular economy actions are still emerging.

Current state of the Vietnamese bio-based circular economy

During the 20th century, the concept of closing the nutrient loops was implemented to some extent in Vietnam. In the agricultural sector, waste from one activity was used as input for another activity. However, due to rapid economic development, the use of chemicals has rapidly replaced the more sustainable but less profitable nutrient-loop model. This came with a heavy price to the environment. (Renewable matter 2017)

Currently, approximately 28 million tons of waste is annually released into the Vietnam environment, 46% of which comes from municipal sources (Schneider et al. 2017). It is interesting to note that 60-70% of the municipal solid wastes is bio-waste, which can be biologically recycled, e.g. turned into compost and/or biogas (Tran et al. 2014). However, the majority of solid waste in Vietnam is either burned or landfilled. For example, 76% of household waste in Vietnam’s biggest city – Ho Chi Minh City – is buried in landfill sites (Báo Mới 2017). This gap between potential and reality of recycling can be seen as potential in the development of a bio-based circular economy in Vietnam.

According to Báo Mới (2017), there has already been a project to categorize household wastes at source in six districts of Ho Chi Minh City, reaching 20-30% categorization rate. Nonetheless, the impact of this project is questionable, as there is insufficient processing technology and infrastructure in the city. The categorized wastes are just grouped back together after being transported to existing waste facilities. Should this project be applied more successfully on a larger scale, a significant amount of waste would be turned into useful materials (Tran et al. 2014).

The recycling industry in Vietnam is undeveloped and very fragmented. In this industry, there is an interesting line of work where people roam around landfill sites to collect recyclable materials and sell back to recycler for a living. This job is called “ve chai” in Vietnamese. However, this way of recycling is extremely inefficient, and “ve chai” collectors barely make a living. (Vietnam Online 2015)

Notable good practices in Vietnam

Biogas in Huế

From 2011 to 2014, BAJ – a Japanese non-profit organization – funded to install 37 biogas digesters in rural areas of Hue city (Bridge Asia Japan 2011; Bridge Asia japan 2014). Those digesters turn livestock manure into biogas, which was initially used for cooking and in-home lighting. These biogas systems have saved approximately 250 USD per month in cooking/lighting costs for each participating family. This amount is significant as Vietnamese GDP per capita is only around 2200 USD/year. The digesters have also led to the development of a street-lighting system utilizing excess biogas produced at night. Excess gas would have been wastefully released otherwise. These systems have made the previously unlit streets much safer for local people. (Khoahoc.tv 2013; Thuy Xuan ward’s People’s Committee 2014).

Bio-fertilizer in Đà Nẵng

A Japan International Co-operation Agency has provided 500,000 USD of funding to setup a biomass liquid fertilizer factory in Đà Nẵng city. This factory applies the organic waste circulation system developed in Chikujo (Japan) to turn municipal wastes into liquid fertilizer for agriculture activities. By 2016, initial testing facilities capable of processing 3.5 tons of waste a day have been operational. This new fertilizer reportedly helps crops to grow healthier. Excess use of the fertilizer does not result in chemical residuals in plants and land like other current chemical fertilizers. Furthermore, the price is roughly 10% that of their chemical counterparts, which greatly helps farmers, since they previously spent 10-20% of their revenue on fertilizers. (Vietnam News 2015)

Solid waste recycling in Đà Nẵng

In 2015, Đà Nẵng’s department of natural resources and environment, together with Vietnam Environment Corporation, introduced the first phase of the Khánh Sơn solid waste processing composite. The investment totals 40 million USD, resulting in a composite that can categorize and process 200 tons of household solid wastes a day. Wastes are turned into oil (industrial fuel), bio-char (soil-fertility supplement), and bricks (building materials). The facilities have achieved up to 0% solid landfill waste ratio. Its introduction has greatly reduced the burden on Khánh Sơn landfill site, which is imminently overloaded and is scheduled to close in 2020. (Tuổi Trẻ Online 2015)

Conclusions

The development of a circular economy in Vietnam is still in its infancy, both in terms of awareness, technology and infrastructure. There are few policies and investments backing this concept. The majority of financial and technological support comes from international environmental organization in the region, especially from Japan. There is, however, great potential in the management of municipal solid wastes. The majority of those wastes can be biologically recycled into valuable materials. Last but not least, although sporadic and limited in scope, there are a number of bio-based circular activities that hint at a promising future for Vietnam.

 References

Balkau, F. 2017. Circular economy and regional implications. In: Massari, S., Sonnemann, G. & Balkau, F. (eds) Life cycle approaches to sustainable regional development. New York, USA: Routledge. 179-185.

Báo Mới. 2017. TPHCM: Mỗi ngày thải ra 8.300 tấn rác, chủ yếu là chôn lấp. [Electronic newspaper]. [Cited 17 Nov 2017]. Available at: https://baomoi.com/tphcm-moi-ngay-thai-ra-8-300-tan-rac-chu-yeu-la-chon-lap/c/22506862.epi

Bridge Asia Japan. 2011. 2011 Annual Report. [Online document]. [Cited 15 Nov 2017]. Available at: http://www.baj-npo.org/english/downloads/BAJ_2011_Annual_Report.pdf

Bridge Asia Japan. 2014. 2014 Annual Report. [Online document]. [Cited 15 Nov 2017]. Available at: http://www.baj-npo.org/english/downloads/2014%20Annual%20Report.pdf

EMF. 2013. Ellen MacArthur Foundation: Towards the Circular Economy. [Online publication]. [Cited 15 Nov 2017]. Available at: https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Ellen-MacArthur-Foundation-Towards-the-Circular-Economy-vol.1.pdf

EMF. 2017. Ellen MacArthur Foundation: Circular Economy System Diagram. [Cited 15 Nov 2017]. Available at: https://www.ellenmacarthurfoundation.org/circular-economy/interactive-diagram

European Commission. 2015. Closing the loop – an EU action plan for the circular economy. [Cited 15 Nov 2017]. Available at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52015DC0614

Khoahoc.tv. 2013. Rác thải thành điện thắp sáng nông thôn (Waste to be turned into lighting for the countryside). [Electronic newspaper]. [Cited 15 Nov 2017]. Available at: http://khoahoc.tv/rac-thai-thanh-dien-thap-sang-nong-thon-45882

Renewable matter. 2017. Vietnam Opens Up to the Circular Economy. [Electronic magazine].  [Cited 15 Nov 2017]. Available at:
http://www.renewablematter.eu/art/295/Vietnam_Opens_Up_to_the_Circular_Economy

Schneider, P., Le, H. A., Wagner, J., Reichenbach, J. & Hebner, A. 2017. Solid Waste Management in Ho Chi Minh City, Vietnam: Moving towards a Circular Economy? Sustainability. [Electronic journal]. Vol 9 (2), 286. [Cited 15 Nov 2017]. Available at: https://doi.org/10.3390/su9020286

Thuy Xuan ward’s People’s Committee. 2014. Lợi đủ điều từ hầm biogas (Benefits from Biogas pit). [Electronic newspaper]. [Cited 15 Nov 2017]. Available at: https://thuyxuan.thuathienhue.gov.vn/?gd=3&cn=136&id=146&tm=10

Tran, T. M. D., Le, M. T. & Nguyen, T. V. 2014. Composition and Generation Rate of Household Solid Waste: Reuse and Recycling Ability – A Case Study in District 1, Ho Chi Minh city, Vietnam. International Journal of Environmental Protection. [Electronic journal]. Vol 4 (6), 73-81. [Cited 14 Nov 2017]. Available at: www.academicpub.org/DownLoadPaper.aspx?paperid=15970

Tuổi Trẻ Online. 2015. Đà Nẵng có công nghệ xử lý chất thải rắn thành dầu, than (Da Nang now has the technology to process solid waste into oil and charcoal). [Electronic newspaper]. [Cited 15 Nov 2017]. Available at: https://tuoitre.vn/da-nang-co-cong-nghe-xu-ly-chat-thai-ran-thanh-dau-than-767847.htm

Vietnam News. 2015. Da nang leads the way with organic fertilizers. [Electronic newspaper]. [Cited 15 Nov 2017]. Available at: http://vietnamnews.vn/society/270616/da-nang-leads-the-way-with-organic-fertilisers.html#7WrwClbmQyxGXeJm.97

Vietnam Online. 2015. Garbage and Recycling. [Cited 14 Nov 2017]. Available at: https://www.vietnamonline.com/living/garbage-and-recycling.html

 Authors

Vie Huynh is a 2nd year student in International Business at Lahti University of Applied Sciences.

Susanna Vanhamäki is the Project Manager for BIOREGIO project at Lahti University of Applied Sciences.

Published 11.12.2017

Image: https://pixabay.com/en/country-nature-rice-river-vietnam-2178853/ (CC0)

Reference to this publication

Huynh, V. & Vanhamäki, S. 2017. Good practices in bio-based circular economy in Vietnam. LAMK Pro. [Online magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2017/12/11/good-practices-in-bio-based-circular-economy-in-vietnam/

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Co-creating Rustenburg Circular Economy Road Map in South Africa

The city of Rustenburg is drafting a road map towards circular economy as a part of cooperation project Co-creating Sustainable Cities with Lahti (Finland) and Ho (Ghana). The road map is drafted with the help of baseline studies, stakeholder discussions and a series of three co-creation workshops in Rustenburg.

Author: Maarit Virtanen

The main objective in Rustenburg is the diversification of economy and creation of jobs through circular economy. Circular economy solutions would also support environmental protection and waste management aims. At the moment, the economy of region is based on mining. During the first two co-creation workshops, four main areas of interest have been identified:  1. Value creation through material recycling; 2. Composting of biodegradable waste; 3. Development of repair and reuse services; 4. Education and awareness raising.

Value creation through technical material recycling

In Rustenburg, the waste collection system covers most of the city area, except for rapidly spreading informal settlements. There is no official recycling of waste, but waste pickers circle the streets and landfill collecting and selling materials. The aim in Rustenburg is to formalise waste recycling, to introduce waste separation at source to households and businesses, and eventually to process some of materials in the area. There are altogether 13 buy back centres for materials in Rustenburg, but the processing is done in Pretoria, Johannesburg or other locations.

Figure 1. Waste pickers taking materials to a buy back centre

Waste separation at source will enhance the material recovery from waste and ease material processing, as organic waste is separated from other materials. It will also provide better income and working conditions for waste pickers and recyclers. Separation at source can be introduced through pilots at selected businesses and communities. The pilots help to specify, which materials should be sorted at source and which can be sorted at the collection or transfer sites. There are already markets for different types of plastics and papers, cardboard, glass and metals.

To ensure effective collection of recyclable materials, sites for sorting and storing of materials should be established. Currently, transportation is a challenge for recyclers working in townships outside the city centre, and there are problems with littering, when recyclers sort the waste on streets.  In the designated sites, recyclers could do the final sorting of materials, after which materials were transported in larger quantities to the existing buy back centres in Rustenburg. Once the process of collection, sorting and sales is functioning, the income from sales can be invested in, for instance, bailers, shredders and transport trucks. Further investment can be sought for a conveyor belt to ease the sorting.

The recycling process can be further developed by establishing municipal buy back centres, if this is seen as an economically viable option instead of selling materials through existing centres. Once the availability of recyclable materials is ensured, processing of some materials can be developed. These can include, for example, manufacturing of pellets from PET bottles, or manual handling of WEEE to separate most valuable components for sale.

Composting of biodegradable waste

The composting of biodegradable waste, including garden waste, kitchen waste and organic waste from businesses will help to divert waste from the landfills and makes the separation of recyclable materials from waste easier and more profitable.

The composting can also be begun with a pilot on, for example, restaurants and selected residential areas. The pilot can be done with open air composting, but it should also be studied, whether, for instance, drum composting could be used to improve the efficiency. After the composting systems is functioning, the ready compost can be sold for agriculture or be utilised by the municipality.

If the collection of biodegradable waste proves successful, and the amounts of organic material are adequate, production of biogas can be a viable option. One pilot scale biogas plant is in operation in Rustenburg, with positive experiences on both gas production and utilisation of compost for gardening. However, as biogas production requires investments, it must be ensured that there is a reliable feedstock for the production.

Development of repair and reuse services

One of key elements in circular economy is to lengthen product lifetime through reuse, remanufacturing and repairing. There is a large number of small-scale repair services in Rustenburg for various products scattered around the town. Industrial estates are developed in Rustenburg for different townships, and these could also act as centralised areas for repair services.

Concentrating services in certain areas could promote the accessibility of services through joint marketing and the entrepreneurs could develop the services together through, for example, join investment on machinery. In addition, proper waste management and recycling would be easier to provide, if the activities were located in certain areas.

Figure 2. Services available at an informal settlement

Education and awareness raising

An important part of circular economy is integrating it into education at different levels to enable broader change in, for example, product design, consumption patterns and business models.

The existing environmental awareness raising programs with schools and other stakeholders can be used and further developed to promote circular economy thinking. In Rustenburg, this can in the long run include also establishing college or university degree programs on circular economy.

Next Steps

The next steps in cooperation are specifying the activities and funding opportunities for circular economy pilots. Work is already well under way in Rustenburg in both formalisation of waste picking and piloting the separation at source. There is also interest for cooperation with Finnish companies, and the aim is to invite some of them to the next co-creation workshop in Rustenburg in March 2018. The Circular Economy Road Map will be integrated into municipal plans to promote the implementation of activities.

The road map and cooperation in Rustenburg is a part of Co-creating Sustainable Cities project funded by the Ministry for Foreign Affairs of Finland. Lahti University of Applied Sciences implements the project together with the City of Lahti in 2017-2018. (Lahti University of Applied Sciences 2017.)

References

Lahti University of Applied Sciences. 2017. Co-creating Sustainable Cities Project. [Cited 4 Dec 2017]. Available at: http://www.lamk.fi/english/projects/co-creating-sustainable-cities

All pictures by the author.

About the author

Maarit Virtanen is the Project Manager for Co-creating Sustainable Cities and Kiertoliike projects at Lahti University of Applied Sciences.

Published: 8.12.2017

Reference to this publication

Virtanen, M. 2017. Co-creating Rustenburg Circular Economy Road Map in South Africa. LAMK Pro. [Electronic journal]. [Cited and date of citation]. Available at:
http://www.lamkpub.fi/2017/12/08/co-creating-rustenburg-circular-economy-road-map-in-south-africa/

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How to Recognise and Exploit Outlooks in SME Level

This article describes the business development activities carried out in The Lahti Region Outlook – Improving SME’s Skills in the Future Business Development project (NÄKY project) at Lahti University of Applied Sciences in 2016-2017. For rapid and unpredictable changes in everyday operating environment, SMEs have to navigate and renew their own businesses. The aim of the NÄKY project is to enhance SMEs skills to anticipate week signals and support SMEs to exploit signals in business development. During the project SMEs have been trained to recognise the main outlooks and exploit them in businesses development.  The main partners of the project are the local Chamber, Universities and vocational institutes.

Authors: Jari Hautamäki & Jussi Eerikäinen

Background

McGuire (2002) underlines framing and mobilisation as the main development measures. According to Gibney et al. (2009, 19), framing means strategic rethinking and co-creation of things getting new shapes and crossing layers and borders. Framing filters knowledge and data flows relating to core development. To paraphrase Sotarauta et al. (2007), framing and filtering influence partners’ minds and support in finding a shared direction for focusing resources and know-how.

According to Solomon et al. (2007), customers and consumers are not only passive buyers, but are more active participants having the desire to be involved in companies’ product and service development. Arnkill et al. (2010) present that companies should undertake major transformations in their innovation processes and business models in order to deliver more valuable products and services to the market. New innovation strategies of companies often involve increasingly open business models, a greater focus on understanding latent consumer needs, and more direct involvement of users in various stages of the innovation process (Arnkil et al. 2010, 15).

The Regional Development Programme of Lahti University of Applied Sciences (Lahti University of Applied Sciences 2015) highlights the university’s mission to prepare regional, national and international business-based future knowledge. One of the main aims of the programme is to create prerequisites for exploiting future knowledge in local business development. Moreover, the Lahti Region Business Build-up Alignments 2016-2020 (Päijät-Hämeen liitto 2016a) notes that changes in business are permanent. Therefore, the role of anticipation and utilisation of changes have a great role in renewing businesses.  Renewing means implementation of changes in business based on an understanding of the influences of future phenomena. Furthermore, abandon from out-of-date business practices is needed.

The Lahti Region Development Programme 2018–2021 (Päijät-Hämeen liitto 2017) shows that digitalisation and internationalisation as well the new growth sectors like circular economy, design, event management and travelling will change the business environment and competition. That creates new kinds of opportunities to generate new business ideas and renew business development processes from the point of view of future knowledge and anticipation. In addition, the programme states that the Lahti Region should utilize more universities’, vocational institutes’ and international companies’ resources and competences in renewing businesses and creating new start-ups.

Lahti Region’s Plan in Preparation for Structural Change (Päijät-Hämeen liitto 2016b) highlights specialisation and test-peds based on regional strengths and opportunities. Development processes are seen as a broad network-based collaboration, which produces new kinds of perspectives and challenges relating to regional development. Furthermore, according to Lahti Region’s educational alignments, working-life and training processes should be more overlapped for involving students in the development of companies.

Business Development Challenges

Rapid and unpredictable changes in operational environment increase challenges in SMEs’ businesses. Preparing for positive or negative changes requires companies to navigate and renew their businesses. Enhancing competitiveness will be possible in companies that underline customer-oriented development and co-learning as well as long-term anticipation. To stay at the top of development is increasingly more important and relevant. (Hautamäki et al. 2013.)

According to Lahden ammattikorkeakoulu (2016) vital SMEs themselves actively participate in the creation of future and ongoing changes.  For clarification, SME’s strategies require recognition of future drivers and opportunities. Learning about the future could be promoted by anticipating in collaborative networks and by efficiently utilising the public sector’s stakeholder resources and prerequisites.

Future business will be generated as results of decisions in companies every day. Managers and staff of SMEs have to learn to recognise outlooks and new opportunities. Future knowledge enables the creation of future-oriented outlooks. Linking outlooks to companies’ business strategies enables mobilisation of development processes and innovative product and service development. (Lahden ammattikorkeakoulu 2016.)

Current SMEs’ know-how in anticipation needs to be enhanced. However, SMEs’ resources for innovative development are normally not sufficient. There are usually problems with meeting future knowledge and business development.  Nevertheless, almost every SME should have innovative business inceptions and initials as well as a the capacity to recognise upcoming technology signals and market shifts over industry sectors (Lahden ammattikorkeakoulu 2017).

Anticipation could be applied and mobilised in collaboration between the public sector and private companies in an agile and practice-based way. From the point of view of collaboration, local universities and business development stakeholders should take responsibility for creating a local future business platform. By combining separated resources to the platform, the effectiveness could be increased. (Lahden ammattikorkeakoulu 2016.)

Network for mobilising development measures

The NÄKY Project (Lahden ammattikorkeakoulu 2017) and anticipation network were established. The Häme Chamber decided to work as a mediating organisation between universities, vocational institutes and chamber-member companies. The shared aim was to establish a network over the Kanta-Häme and Lahti Regions for continuing local collaboration between education and companies, together with developing new practices. One aim was to test social media applications in disseminating results and develop multi-channelling communication practices in network (Eerikäinen & Hautamäki 2017).

Figure 1. The Anticipation Network of the NÄKY Project (Lahden ammattikorkeakoulu 2017)

The aim of the project has been to create new SME-based agile development practices for recognising and visualising future trends and signals, as well as for exploiting them in SMEs’ business development. The duties of the universities have been to manage projects and create a development platform with different sorts of test-peds. The platform has been needed for testing cross-fertilization methods intended for colliding managers, experts and students of SMEs and development organisations (Eerikäinen & Hautamäki 2017).

The main aim of the project has been to create a regional operating model for enhancing SMEs’ anticipation skills and increasing companies’ capabilities and inspiration to develop and nimbly utilise the strategies of their own. For disseminating the project’s results, an externally funded national development programme and project will be prepared.

Preliminary Results of the Project

The NÄKY Future Map (figure 2) has been prepared on Trello community by experts and students working for the project. The map presents 100 main future trends and signals, which are significant from the point of business development today. The map is interactive and enables involvement in conversations relating to complementing and enriching the information included to single trends and signals. The NÄKY Future Map supports updating linked to https://trello.com/b/YUuunEwd. (Lahden ammattikorkeakoulu 2017.)

Figure 2. The NÄKY Future Map (Lahden ammattikorkeakoulu 2017)

The regional operating model for enhancing SMEs’ skills in anticipation has been tentatively modified from the Quadruple Helix model (Figure 3). The final model will contain major stakeholders, relations, encounters, test-peds, platforms and practices fostering SMEs’ roles in the business development learning process.

Figure 3. Tentatively Operating Model based on the Quadruple Helix -Model (cf. Chesbrough & Bogers 2014).

The roles of the stakeholders of the operating model have been settled. Häme Chamber’s member companies’ role have been to learn, how to recognise future trends and signals as well as how to exploit the Business Model Canvas and Lean Service Creation in combining future signals and agile everyday business development together.

Through the experiments, the local Chamber’s, universities’ and vocational institutes’ assignments have been to find new collaborative ways to anticipate, enhance anticipation skills and foster SMEs’ business development processes. The Regional Council’s assignment has been to finance development measures of the NÄKY projects, with the aim of implementing regional strategies and programs, which direct regional development resources. The aim of the students has been to network with SMEs, creating new ideas and learning development processes typical for working life.

To combine the previously mentioned stakeholders and interested parties has been based on the involvement of a development context arranged by the projects. Every party has the same development platform, even though they each have different aspirations. The Context Management contains listed events, meet-ups and workshops, such as the following:

  • NÄKY Kick-off Events, 24th and 27th of January 2017
  • Häme Chamber Afternoon Event for Influential Persons, 16th of February 2017
  • Workshop: Building-up and Internationalisation 30th of March 2017
  • Workshop: Running-up Business by Utilising Business Model Canvas, 25th of April 2017
  • Workshop: How to Exploit Trends and Future Signals in Business Development, 27th of April 2017
  • Workshop: Drivers of Change and alternative Outlooks, 7th of June 2017
  • Workshop: How to Combine Ideas by using Agile Methods, 8th of June 2017
  • Workshop: Deploying Customer Experiences in Service Development, 27th of September 2017
  • Workshop: Social Media Applications in Marketing and Selling, 28th of September 2017
  • Future Business Summit, 9th of November 2017

One of the most important outcomes of the NÄKY Project will be the local, future-based business development plan. Planning is still in progress without the final report. The aim is to create a new business development project, which is meant to disseminate good practices to other Chambers and inspire to create the same kind of development activities as the NÄKY Project. Moreover, the effectiveness of the NÄKY Project activities should systematically explore and implement measures by applying universities’ RD-opportunities (Eerikäinen & Hautamäki 2017).

For marketing workshops’ contents and results through multiple channels, some social media applications have been tested. The NÄKY Map of the Future has been created by applying the Trello application. Many newsletters have been sent and released by Facebook and traditional websites. The Häme Chamber’s online newspaper has been a workable channel for disseminating good practices and case stories (Hämeen kauppakamari 2017).

Summary

The main task of the NÄKY projects is to enhance SMEs’ skills to anticipate business transformation and utilise agile methods in business development. There are many reasons for that. According to Hautamäki et al. (2012), consumption has been a target for strong fragmentation in the last years. The same customer is able to belong to many different consuming communities and behave in many different ways. Consumption behaviour will increasingly change in the future because of the fast transformation of operating environments. That’s why marketing and selling have to be based increasingly more on consumers’ lifestyles, significances, images, myths, symbols, shared values, conversations and stories as well as acquisition practices.

Future knowledge is needed for developing businesses in companies and communities. Main challenge is to filter and make visible knowledge and information, which relates to development targets. The duty of Universities of Applied Sciences is to produce knowledge, which is exploitable from the point of view of the business development of working life organisations and networks. For this reason, Lahti University of Applied Sciences and Häme University of Applied Sciences have launched the NÄKY projects with close collaboration to the Häme Chamber.

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Sotarauta, M., Kosonen, K-J., & Viljamaa, K. 2007. Aluekehittäminen generatiivisena johtajuutena – 2000-luvun aluekehittäjän työnkuvaa ja kompetensseja etsimässä. Tampere University. SENTE 23/2007.

About the authors

Hautamäki, Jari, Ph.D., works as a director of regional development in Lahti University of Applied Sciences. His duties include developing collaboration between university and working-life and developing services for business organization.

Eerikäinen, Jussi, M.Sc. (Tech.), is a CEO of Häme Chamber of Commerce. Previously he has worked for Lahden Messut Oy and Yleiselektroniikka Oyj as a managing director.  A wide experience in foresight activities and business strategies belong to his competences.

Hautamäki, Jari, KT, toimii aluekehitysjohtajana Lahden ammattikorkea­koulussa. Tehtäviin kuuluvat mm. Lahden ammattikorkeakoulun sidosryh­mä- ja kumppanuuskäytäntöjen sekä työ- ja elinkeinoelämälle suunnattujen palvelujen kehittäminen.

Eerikäinen, Jussi, DI, toimii Hämeen kauppakamarin toi­mitusjohtajana. Hän on toiminut aikaisemmin mm. Lahden Messut Oy:n ja Yleiselektroniikka Oyj:n toimitusjohtajana ja Onninen Oy:n markkinointijoh­tajana. Hänellä on laaja kokemus ja osaaminen ennakoinnista ja strategia­lähtöisestä liiketoiminnan kehittämisestä.

Published 7.12.2017

Reference to this publication

Hautamäki, J. & Eerikäinen, J. 2017. How to Recognise and Exploit Outlooks in SME Level. LAMK RDI Journal. [Electronic journal]. [Cited and date of citation]. Available at:
http://www.lamkpub.fi/2017/12/07/how-to-recognise-and-exploit-outlooks-in-sme-level/

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Article picture by Jari Hautamäki.

Circular Economy Co-creation in Ho, Ghana

An aim of cooperation between Ho (Ghana), Rustenburg (South Africa) and Lahti (Finland) is identifying circular economy opportunities and pilot projects. The co-creation process includes baseline studies, stakeholder discussions and workshops.  The article presents two identified waste pilot projects in Ho.

Author: Maarit Virtanen

Introduction

In Ho, the lack of waste management services is visible and there is no organised recycling of materials except for metals and small amounts of plastics. However, for example, organic waste is widely used for animal fodder. There is also reuse for items like empty plastic bottles, containers and cardboard boxes. Furthermore, various reuse, renting and repair services are available around the town. Even the public transportation is based on an efficient taxi system with cheap prizes, joint rides and constant availability of service.

 Ho Market Place Waste Recycling

The new Ho Market Place is expected to open in 2017. The Market Place hosts around 2000 sellers on market days, which take place every fifth day. The market place is used daily and has been identified as a suitable place to pilot waste sorting and recycling. The new main market building has space for 390 sellers, and there are also several other new stalls in the area. Almost everything is sold in the market; garden and agricultural products, a lot of yam and charcoal, fish, groceries, textiles, clothes, plastics, pesticides, canned food etc.

Figure 1. Ho Market Place

The largest waste fractions generated at the Market Place are plastics, cardboard, paper, organic waste and charcoal waste. Almost all waste fractions generated have some kind of monetary value, although currently only metals, plastics, paper and cardboard have a possible buyer in Ho. Materials are transported to Accra for processing.

For the piloting of recycling, it was decided to focus on the biggest waste streams that already have a market, and to organic waste. A composting facility is needed for organic waste recycling.  The stakeholders involved in the value chain include waste producers, waste management companies, private companies buying and processing recyclables, the Ho Municipal Assembly, Market and Traders Associations, research institutes, farmers and other possible users for the compost, and local NGOs.

The separation of recyclable waste at market place can be done by waste pickers or buy sellers. Since waste separation is a totally new concept for the sellers, and they change, education can be challenging. The best solution could be to have separate waste bins for organic waste and other recyclables, and also have trained waste pickers circulating the area and collecting materials. At the moment, collecting recyclable waste is not seen a worthwhile job, so awareness raising is also needed on the value of materials.

Before starting the pilot, the amounts and availability of waste must be studied. There is already local utilisation for, for example, some of the organic waste and a token fee can be expected for it. What is also needed for the pilot is intensive training for waste pickers and market sellers, and equipment for waste collection. In addition, municipal waste regulations should be formulated to support waste sorting and recycling. A separate plan is needed for the small-scale composting facility.

Figure 2. Waste ends up in streams and rivers in Ho

Waste Recycling Pilot at Ho Technical University

Ho Technical University (HTU) has about 5 000 students and a campus area with several departments, offices, restaurants and student hostels. HTU has proposed a waste recycling pilot in the campus. The largest waste fractions produced at HTU include paper, cardboard, plastics and organic waste. There is also some metal and cans. In addition, small amounts of e-waste, glass, leather waste, and used clothes are produced. The waste is generated by students, staff, vendors, restaurants, workshops and hospitalities. Organic waste includes garden waste.

Similar to the market place, the easiest waste fractions to start with are those with existing markets, like cardboard, paper and plastics. Considerable amounts of paper are stored at campus, so the first step in the pilot is to organise their recycling. The collection of organic waste requires a composting facility, which should be a common one for campus and organic waste from the market. The university has a Department of Agriculture that has a farm and could participate in composting and relater research.

Since waste recycling is new in Ho, HTU campus would provide a good piloting opportunity for also testing different communication and education methods with students involved in the whole process. In addition to material recycling, different upcycling and reuse opportunities can be explored together with students.

Next Steps

The circular economy concept has been recognised with enthusiasm in Ho, and a wide range of stakeholders has been involved in the two workshops organised. The next aim is to co-create concrete pilots to test the concepts. Cooperation with Ho is a part of Co-creating Sustainable Cities project funded by the Ministry for Foreign Affairs of Finland, and coordinated by Lahti University of Applied Sciences.

Author

Maarit Virtanen is the Project Manager for Co-creating Sustainable Cities and Kiertoliike projects at Lahti University of Applied Sciences.

Published 28.11.2017

All photos by Maarit Virtanen.

Reference to this publication

Virtanen, M. 2017. Circular Economy Co-creation in Ho, Ghana. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2017/11/28/circular-economy-co-creation-in-ho-ghana/

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Size doesn’t matter: The Importance of Strategic Management & Planning in SMEs

Today, businesses which carefully design their future plans based on strategies are said to out-rival their competitors and develop sustainability in the long-term. This article is aimed to outline an idea of the importance of strategic management and planning within small and medium-sized enterprises which commonly constitute the largest economic share by output.

Authors: Daria Torzhevskaia and Minna Porasmaa

The Meaning of Strategic Management

The function of strategic management is to formulate and put into practice the major company’s initiatives considering available resources and assessing the internal and external environments in which the organisation operates. It provides a general direction to the enterprise and involves specifying the organisation’s objectives, developing policies and plans to reach these objectives, and then allocating resources to implement the plans. Accurately executed strategic management navigate and orientate individuals within organisations, make them more mobilised, encouraged and following the same focus and direction. In order to achieve a successful strategic fit a company should be consistent in its external environment which includes relationships with its rivals, customers and suppliers and internal goals, capabilities and structures. (Hambrick & Chen 2007.)

Strategic Planning in Small and Medium-Sized Enterprises

Smaller firms are not simply the smaller versions of larger organisations, but they behave in the market very differently. The substantial body of research acknowledges a positive relationship between strategic orientation and firm success. (Jones & Sisay 2014.) However, due to insufficiency of market knowledge and capital, a limited access to research and personal intuitive management style, SMEs commonly ignore strategic orientation. Even though most of the research practices on strategic management are applied to large corporations, the relevance of strategy in small businesses does not diminish in comparison with bigger entities. Small firms can even display an explicit strategic competitive behaviour. (Lobontiu 2002.)

The opportunity exploration and reasonable resources exploitation directly affect small business performance. Virtually, SMEs cannot compete with larger firms in terms of investment in Research and Development (R&D), economies of scale or significant promotional expenditure (e.g. nation-wide marketing campaigns). (Hill & McGowan 1999.) Thus, given the advantages of flexibility within a small entity, the strategic concept has to be more flexible and adaptable for them.

Every globally recognised company started out small. A shared key to success of those organisations laid in their ability to see the goal and effectively plan their actions towards it.  (TXM Lean Solutions 2017.) The conclusion from this is whenever an initiative to start up a business emerges, the first things for key long-term success is to establish a clear reason for existence (Mission), a big dream driving company’s operations (Vision) and fundamental principles that would guide its daily decision-making (Values). The objectives and goals have to be set out and communicated across the team to ensure the operational and human capabilities are aligned with the strategy execution requirements.

Case Study

In order to display a practical application of the ideas above, the strategic planning significance can be underpinned by one particular construction industry example. The case company strategy turned out to be more intuitive than deliberate with a strong orientation towards operational rather than strategic issues.

The research has been undertaken within a small general contractor located in Sydney, Australia, – the market with an intense and tough competition – which provides design and construction services with a particular operational emphasis on project management. The company had been functioning well with a short-term project success orientation until it reached a certain point of maturity where it had to choose: either to reinvent its vision and devise a future survival strategy or accept the failure to grow. The empirical research by interviewing the company’s representatives has revealed that the main growth restricting factor was its inability to develop the fundamental principles and values which would guide its daily decision making. This in turn has disrupted the company’s ability to effectively develop in a more complex and profitable business model by using a proposed external opportunity to cooperate under Joint Venture. (Torzhevskaia 2017.)

Being strategically unprepared for future, the company was largely myopic at reaching out higher efficiency of its operations and taking advantage of market prospects at its full capacity. It has been observed how a strategically uncertain position of the case company has entailed troubles in project management, brand identification and relationships with stakeholders. (Torzhevskaia 2017.) This case is a bright example of how significant the potential losses may be if an entity is not given a purpose and a direction to move forward. Such position has a more or less predictable outcome which is likely a recession, stagnation or an end of development.

This case can teach us a few things. First, the strategic planning cannot be underestimated regardless of the type and scale of activity. Second, an ongoing reflection and environmental scanning are key for recognising opportunities in the external environment. Thirdly, all the above conclusions are especially applicable for the small businesses which success is strongly determined by the ability to scan the environment and adapt to changes considering its internal capacity. Finally, the more complex the business model becomes and the higher market expectations emerge, the more dynamic leadership and strategic orientation is required.

In Conclusion

The strategic planning activities have to operate at the pace of business, providing real-time perspectives for management to quickly respond to market swings, reallocate resources and take advantage of emerging prospects. Companies that tend to integrate and develop their strategic planning techniques compete more effectively generating higher sales and profit margins, return on assets and employee growth being at the same time more innovative and nationally recognised.(Desai 2015.)

It has been a matter of disputes and extensive discussions whether strategic planning is necessary within businesses. However, the industry case described above adds to the significance of proper strategic management disregarding the scope and nature of operations. In parallel, a traveler without a final image of destination and a sense of direction is likely to get lost throughout a journey. It is hard to argue that every manager who is aiming at success has to be led by the strategic plan with clear goals as well as every intelligent traveller is guided with a map and a compass.

References

Chinowsky, P. & Meredith, J. 2000. Strategic Management in Construction. Journal of Construction Engineering and Management. [Electronic journal]. Vol. 126 (1), 1-9. [Cited 5 Oct 2017]. Available at: https://doi.org/10.1061/(ASCE)0733-9364(2000)126:1(1)

Desai, F. 2015. Why Global Corporations Need to Redesign Their Strategic Planning Function. [Electronic magazine]. Forbes Nov 2, 2015. [Cited 5 Oct 2017]. Available at: https://www.forbes.com/sites/falgunidesai/2015/11/02/why-global-corporations-need-to-redesign-their-strategic-planning-function/#1ac124d06ee3

Hambrick, D. & Chen, J. 2007. What is strategic management, really? Inductive derivation of a consensus definition of the field. Strategic Management Journal. [Electronic journal]. Vol. 28 (9), 935-955. [Cited 5 Oct 2017]. Available at: http://dx.doi.org/10.1002/smj.615

Hill, J. & McGowan, P. 1999. A qualitative approach to developing small firm marketing planning competencies. Qualitative Market Research: An International Journal. [Electronic journal].  Vol. 2 (3), 167-175. [Cited 5 Oct 2017]. Available at: https://doi.org/10.1108/13522759910291662

Jones, R. & Sisay, S. 2014. Small and Medium Enterprises. Strategic Management in SMEs: An Orientation Approach. In: Todorov, K. & Smallbone, D. (eds) Handbook of Research on Strategic Management in Small and Medium Enterprises. [Electronic book]. Hershey, PA: IGI Global. Advances in Logistics, Operations, and Management Science (ALOMS) Book Series , 1-23. [Cited 5 Oct 2017]. Available at: https://doi.org/10.4018/978-1-4666-5962-9.ch001

Lobontiu, G. 2002. Strategies and Strategic Management in Small Business. [Electronic document]. Copenhagen: Department of Management, Politics and Philosophy. Copenhagen Business School. MPP Working Paper No. 15/2002.  [Cited 5 Oct 2017]. Available at: http://openarchive.cbs.dk/bitstream/handle/10398/6373/wp15-2002.pdf?…1

Torzhevskaia, D. 2017. Strategic Management in Construction Industry. Case Company: Custom Design & Construction. [Online document]. Bachelor’s thesis. Lahti University of Applied Sciences, Faculty of Business and Hospitality Management. Lahti. [Cited 5 Oct 2017]. Available at: http://www.urn.fi/URN:NBN:fi:amk-2017101316038

TXM Lean Solutions 2017. Blog: Why do So Few Small Companies Become Big Companies? [Cited 5 Oct 2017]. Available at: http://txm.com.au/blog/small-companies-become-big-companies

Authors

Daria Torzhevskaia has studied International Business at Lahti University of Applied Sciences and will graduate and receive a BBA degree in October 2017.

DSc. (Econ. And Bus. Adm.) Minna Porasmaa works as a Senior Lecturer at Lahti University of Applied Sciences, Faculty of Business and Hospitality Management.

Published 25.10.2017

Illustration: http://blog.muipr.com/wp-content/uploads/2014/08/marketing-624×5001.jpg