Papers in Brief (IX): Wells (2016): Degrowth and Techno-Business Model Innovation: The Case of Riversimple

[Note: This is the ninth post in our “Papers in Brief” series. This series offers a special service as it explains the core ideas of chosen research papers in a nutshell.]

Papers in Brief (IX) by Peter Wells

Wells, P. (2016): Degrowth and techno-business model innovation: the case of Riversimple, Journal of Cleaner Production, online first 5 July 2016, http://dx.doi.org/10.1016/j.jclepro.2016.06.186.

While the concept of degrowth has captured the imagination and spoken to the concerns of many, making such a concept operational presents considerable challenges. Moreover, the degrowth journey has to start from present realities so the question of transition becomes fundamental.

This paper explores how degrowth might be attained, through a case study of Riversimple, an innovative business in the realm of personal automobility, based in Wales (in the UK).

Despite the deeply grounded critique of capitalist neo-liberal market structures as the primary resource allocation mechanism in most societies, little has been said about the function of business in the transition to and dynamic reproduction of degrowth. In other words, to date the rich debate around degrowth, encompassing many perspectives, discourses and views, has been preoccupied with the grand picture. At this juncture, the actualisation of degrowth thus requires the same quality of rich debate but at the micro-economic level of organisations, the technologies they employ in production or service delivery, the technologies embedded in the products and services they deliver, and the management structures that shape not only the need (or not) for growth but also the wider ramifications of those constituent technologies.

It is argued that the key to this transitionary process is the triple-layer of innovation in technology, the business model, and the governance structure. The paper shows that radical technology innovations in the vehicle itself are achieved by underlying principles that focus on mass decompounding, powertrain de-coupling, whole system design, and low-volume production systems. The characteristics of the technologies are fundamental to, and in part derive from, the business model adopted by the case, and the governance structures designed to avoid the primacy usually afforded to returns to financial shareholders.

In brief, the Riversimple Rasa car has a lightweight carbon fibre structure, off-the-shelf hydrogen fuel cell stack, a hybrid ultra-capacitor battery pack, and four hub motors that can also be used in regenerative braking. The car can seat two, and weighs just 580kg. As a package, therefore, the cars are highly efficient. Prototype test mules have delivered in excess of the equivalent of 106 km/litre, with a range of some 480 km, acceleration 0-50 kph of 5.5 seconds, a top speed of 80 kph, and can be refuelled in three minutes.

The paper provides some comparisons with the philosophical approach and product outcomes of the conventional automotive industry. In particular the Tesla S, and BMW i3 and i8 models are used as comparators in Table 1. Moreover, there is discussion of the differences between the Rasa and the fuel cell models emerging onto the market during 2016 including the Toyota Mirai, the Hyundai ix35 SUV, and the Honda FCX Clarity. These mainstream efforts are all exposed as being unduly resource intensive and expensive.

Manufacturer Riversimple Rasa BMW Tesla BMW
Model Prototype i8 Model S i3
Mass (kg) 560 1,500 2,100 1,300
Power Fuel cell and ultra-capacitor Plug-in electric hybrid with 1.5 litre 3-cylinder combustion engine Battery electric Battery electric (range extender optional)
Vehicle body Carbon fibre reinforced composite (autoclave) Carbon fibre reinforced composite, bonded panels Steel welded panels Carbon fibre reinforced composite, bonded panels

Table 1: Riversimple, BMW and Tesla models compared

(Sources: www.riversimple.com; www.bmw.com; www.teslamotors.com. All accessed 25/05/16)

It is important to understand that for Riversimple the technologies and the innovations in business model and governance structure are all part of one cohesive approach to the activity of providing mobility and aspiring to zero environmental cost (see www.riversimple.com). This ‘whole system design’ is thus integral to understanding the potential contribution to degrowth as a ‘flourishing’ business.

riversimple_governance

Diagram 1: The Riversimple business model and governance structure

In essence, Riversimple’s governance structure comprises six custodian bodies, separate legal entities who are the sole members of Riversimple LLP. They jointly appoint the board to oversee the day-to-day management and strategy, and the Stewards (one to each of the six areas) to oversee the wider social, implications of the business. The six areas are: Environment; Users; Staff; Neighbours; Investors; (Technology) Partners. Importantly, the ‘investors’ are only one of the six custodian bodies, and each custodian body has an equal voice, so the financial concerns are not prioritised to the exclusion of all else.

The business model at the heart of it all is founded on the characteristics of the underpinning product technologies reinforced and enabled by a ‘sale of service’ approach in which the business retains ownership of the products as assets. It is notable that the mobility service package includes fuel consumption, thereby providing an incentive for the business to improve the operational efficiency of the product. The stewards have a role in ensuring that, over the long term, the business remains true to its principles rather than seek to extract some form of monopoly rent and increase charges in the future.

The concept is predicated upon the product being returned every three years to be ‘refreshed’ both cosmetically and practically before being made available again to users. In principle such an approach is well-understood in product-service systems as being a mechanism that encourages product longevity by design and hence reduce resource use. Such a model would readily suit car-sharing concepts and wider interests in the circular economy.

The paper concludes by returning to the issue of degrowth. It is recognised that brave micro-scale alternatives have a long history, but equally have largely failed to flourish in the hostile context of over-arching neo-liberal economies. As Kallis et al. (2012) note, one key question is how will production be organised in a degrowth world. It is proposed in this paper that the journey Riversimple has embarked upon is a meaningful transitional solution that is achievable while ‘inside’ contemporary economies, while simultaneously providing a potential constituent ingredient of the radically different degrowth future. Certainly, for the founder Hugo Spowers the enduring legacy is not sought with regards to the technologies of the car itself, or even with the redefinition of personal private mobility. Rather his ideal is that the business model and governance concept be replicated and applied in multiple arenas and markets as a structure to enable the democratic localisation of zero burden provision. Hence Riversimple could be understood as an under-developed form of collective and politically-motivated precursor to degrowth, or as the sort of creative commons of design and manufacture post-capitalist production model.

References

Wells, P. (2016): Degrowth and techno-business model innovation: the case of Riversimple, Journal of Cleaner Production, online first 5 July 2016, http://dx.doi.org/10.1016/j.jclepro.2016.06.186.

Kallis, G.; Kerschner, C. & Martinez-Alier, J. (2012): The economics of degrowth, Ecological Economics, Vol. 84, pp. 172-180.

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