Distributed economy

Last updated

Distributed economies (DE) is a term that was coined by Allan Johansson et al. in 2005. [1]

Contents

Definition

There is no official definition for DE, but it could be described as a regional approach to promote innovation by small and medium-sized enterprises, as well as sustainable development. The concept is illustrated in the figure below, that shows centralised, decentralised and distributed economies respectively.

Different types of economies Centralised-decentralised-distributed.png
Different types of economies

Features

The relations in DE are much more complex than those in a centralised economy. This feature makes the whole economy more stable – leaf nodes no longer rely on just one central node. It also resembles ecological networks, making it a good practical example of industrial ecology. A big advantage of DE is that it enables entities within the network to work much more with regional/local natural resources, finances, human capital, knowledge, technology, and so on. It also makes the entities more flexible to respond to the local market needs and thus generating a bigger innovation drive. By doing this, they become a better reflection of their social environment and in that way they can improve quality of life. The whole concept of DE is not at all a new invention – this is how most pre-industrial economies were organised. However, information technology has opened new doors for the concept: information can be shared much more easily and small-scale production facilities (rapid prototyping) are becoming cheaper. [2] The DE concept works well with the development of fab labs.

Not all industries are fit for DE; for example, many chemical processes only become economically feasible & efficient on a large scale. On the other hand, bio-energy [3] and consumer products are interesting candidates.

See also

Related Research Articles

<span class="mw-page-title-main">Appropriate technology</span> Concept in the philosophy and politics of technology

Appropriate technology is a movement encompassing technological choice and application that is small-scale, affordable by its users, labor-intensive, energy-efficient, environmentally sustainable, and locally autonomous. It was originally articulated as intermediate technology by the economist Ernst Friedrich "Fritz" Schumacher in his work Small Is Beautiful. Both Schumacher and many modern-day proponents of appropriate technology also emphasize the technology as people-centered.

Industrial ecology (IE) is the study of material and energy flows through industrial systems. The global industrial economy can be modelled as a network of industrial processes that extract resources from the Earth and transform those resources into by-products, products and services which can be bought and sold to meet the needs of humanity. Industrial ecology seeks to quantify the material flows and document the industrial processes that make modern society function. Industrial ecologists are often concerned with the impacts that industrial activities have on the environment, with use of the planet's supply of natural resources, and with problems of waste disposal. Industrial ecology is a young but growing multidisciplinary field of research which combines aspects of engineering, economics, sociology, toxicology and the natural sciences.

<span class="mw-page-title-main">Knowledge economy</span> Approach to generating value

The knowledge economy, or knowledge-based economy, is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific innovation. The key element of value is the greater dependence on human capital and intellectual property as the source of innovative ideas, information, and practices. Organisations are required to capitalise on this "knowledge" in their production to stimulate and deepen the business development process. There is less reliance on physical input and natural resources. A knowledge-based economy relies on the crucial role of intangible assets within the organisations' settings in facilitating modern economic growth.

Economies of scope are "efficiencies formed by variety, not volume". In the field of economics, "economies" is synonymous with cost savings and "scope" is synonymous with broadening production/services through diversified products. Economies of scope is an economic theory stating that average total cost (ATC) of production decrease as a result of increasing the number of different goods produced. For example, a gas station primarily sells gasoline, but can sell soda, milk, baked goods, etc. and thus achieve economies of scope since with the same facility, each new product attracts new dollars a customer would have spent elsewhere. The business historian Alfred Chandler argued that economies of scope contributed to the rise of American business corporations during the 20th century.

Distributed artificial intelligence (DAI) also called Decentralized Artificial Intelligence is a subfield of artificial intelligence research dedicated to the development of distributed solutions for problems. DAI is closely related to and a predecessor of the field of multi-agent systems.

Eco-capitalism, also known as environmental capitalism or (sometimes) green capitalism, is the view that capital exists in nature as "natural capital" on which all wealth depends. Therefore, governments should use market-based policy-instruments to resolve environmental problems.

A prosumer is an individual who both consumes and produces. The term is a portmanteau of the words producer and consumer. Research has identified six types of prosumers: DIY prosumers, self-service prosumers, customizing prosumers, collaborative prosumers, monetised prosumers, and economic prosumers.

A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more politically applied focus. The 2011 UNEP Green Economy Report argues "that to be green, an economy must not only be efficient, but also fair. Fairness implies recognizing global and country level equity dimensions, particularly in assuring a Just Transition to an economy that is low-carbon, resource efficient, and socially inclusive."

Productive forces, productive powers, or forces of production is a central idea in Marxism and historical materialism.

<span class="mw-page-title-main">Fab lab</span> Small-scale workshop for digital fabrication

A fab lab is a small-scale workshop offering (personal) digital fabrication.

Commons-based peer production (CBPP) is a term coined by Harvard Law School professor Yochai Benkler. It describes a model of socio-economic production in which large numbers of people work cooperatively; usually over the Internet. Commons-based projects generally have less rigid hierarchical structures than those under more traditional business models.

Cleaner production is a preventive, company-specific environmental protection initiative. It is intended to minimize waste and emissions and maximize product output. By analysing the flow of materials and energy in a company, one tries to identify options to minimize waste and emissions out of industrial processes through source reduction strategies. Improvements of organisation and technology help to reduce or suggest better choices in use of materials and energy, and to avoid waste, waste water generation, and gaseous emissions, and also waste heat and noise.

The following outline is provided as an overview of and topical guide to business management:

The following outline is provided as an overview of and topical guide to technology:

Degrowth is an academic and social movement critical of the concept of growth in gross domestic product as a measure of human and economic development. The idea of degrowth is based on ideas and research from economic anthropology, ecological economics, environmental sciences, and development studies. It argues that modern capitalism's unitary focus on growth causes widespread ecological damage and is unnecessary for the further increase of human living standards. Degrowth theory has been met with both academic acclaim and considerable criticism.

<span class="mw-page-title-main">Industrial engineering</span> Branch of engineering which deals with the optimization of complex processes or systems

Industrial engineering is an engineering profession that is concerned with the optimization of complex processes, systems, or organizations by developing, improving and implementing integrated systems of people, money, knowledge, information and equipment. Industrial engineering is central to manufacturing operations.

<span class="mw-page-title-main">Outline of geography</span> Hierarchical outline list of articles related to geography

The following outline is provided as an overview of and topical guide to geography:

<span class="mw-page-title-main">Circular economy</span> Production model to minimise wastage and emissions

A circular economy is a model of resource production and consumption in any economy that involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products for as long as possible. The concept aims to tackle global challenges such as climate change, biodiversity loss, waste, and pollution by emphasizing the design-based implementation of the three base principles of the model. The main three principles required for the transformation to a circular economy are: designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. CE is defined in contradistinction to the traditional linear economy.

<span class="mw-page-title-main">Social metabolism</span> Study of materials and energy flows between nature and society

Social metabolism or socioeconomic metabolism is the set of flows of materials and energy that occur between nature and society, between different societies, and within societies. These human-controlled material and energy flows are a basic feature of all societies but their magnitude and diversity largely depend on specific cultures, or sociometabolic regimes. Social or socioeconomic metabolism is also described as "the self-reproduction and evolution of the biophysical structures of human society. It comprises those biophysical transformation processes, distribution processes, and flows, which are controlled by humans for their purposes. The biophysical structures of society and socioeconomic metabolism together form the biophysical basis of society."

Open manufacturing, also known as open production, maker mamanufacturing or material peer production and with the slogan "Design Global, Manufacture Local" is a new model of socioeconomic production in which physical objects are produced in an open, collaborative and distributed manner and based on open design and open-source principles.

References

  1. Johansson A, Kisch P, Mirata M., 2005, Distributed economies - A new engine for innovation Archived September 28, 2007, at the Wayback Machine . Journal of Cleaner Production 2005;13:971-9
  2. "New York Times - Beam It Down From the Web, Scotty" (PDF). Archived from the original (PDF) on 2011-07-25. Retrieved 2007-06-19.
  3. Mirata, Murat; Nilsson, Helen; Kuisma, Jaakko (August 2005). "Production systems aligned with distributed economies: Examples from energy and biomass sectors". Journal of Cleaner Production. 13 (10–11): 981–991. doi:10.1016/j.jclepro.2004.12.018.