The fragility of the waste industry

Nicholas Nassim Taleb of The Black Swan fame, has recently written a new book called Antifragile. This book essentially takes the observation of black swans (highly unlikely, high impact events) and seeks to understand how the existence of black swans can be exploited.

Rather than systems being susceptible to black swans (ie fragile), or even resistant to black swans (resilient or robust), the goal is to design systems that thrive in the presence of black swans. Taleb coins the word "antifragile" to describe such systems.

What does that have to do with waste?

Well, I'd argue that it has a great deal to do with waste. Whenever the waste industry turns its mind to zero waste, it seems to do so in a perfectly fragile way.

Waste - racing to the bottom or the top?

Developing our waste processing plant, I am reminded of Seth Godin's blog post: The race to the bottom. In short, we can chose a race to the bottom or a race to the top.

The race to the bottom

This race is pretty clear cut. It involves bigger landfills, older trucks, cutting corners wherever possible to wring every last cent out of the business. Eventually, the last cent wrung out of the business is yourself. 

It assumes that the customer doesn't care what happens to their waste, and is purely driven by price. Of course, once you've created this race then it is self-fulfilling. You have convinced the customer that the only thing that matters is price.

Every market has its own race to the bottom, and every race to the bottom ends up at the bottom. You can only hope that race doesn't consume the whole market. 

In the field of waste management, but also in most other fields, you rely on regulators to protect you against the worst of the race to the bottom. Regulators can even call the race off (if they wish).

The race to the top

This race is also clear. It involves fewer landfills and more waste processing. It is probably more labour intensive as it seeks to extract every last resource from the waste received. Unlike the race to the bottom, it builds new businesses upon its success. 

Reprocessed material adds value and jobs to the economy - a recent report "The Australian Recycling Sector" estimates that

• 0.15 to 0.3% of all Australian jobs are in the recycling
• The sector has annual turnover of between $6-10 billion dollars, of which more than half is from the sale of recover materials
• A tonne of waste recycled creates more jobs than a tonne of waste landfilled

This race assumes that customers ultimately want good service, and are prepared to pay a little above the bottom of the market to receive it. Sell a vision and you will be surprised what you bring with you. Of course, it may be that the customers need some prodding.

For example, if you are building a waste processing plant, your key customers are waste collectors. Their customers are other businesses who sell, ultimately, to consumers. And consumers can be very influential in persuading businesses to lift their game. Selling the vision should not be confined to your immediate customers, but rather across all of society. It is the grand narrative that you want people to buy, not a selfish little "what's in it for me".

The race to the top is all but untouched by the regulator, but rather driven on by your customers and your ability to keep innovating.

Where would you rather be?

Long term, there is only one race you want to be in. The race to the bottom is easy. It is also a race to your own destruction. Sure, not now, but in a few years time (depending on the speed of change in the market).

The race to the top is hard. It requires a great ability to tell the story. It needs supporters, fans, followers. It needs a virtuous cycle of creating people who care, who in turn create more people who care. 

For all of this, the race to the top is the only sustainable race. When the bottom racers have collapsed, spent after slugging it out in the ditch, you remain strong and profitable.

And what do I do?

It is pretty straightforward - you can just keep spreading the word. Keep up your belief that the wrong thing is wrong, no matter how much people seek to persuade you otherwise. 

This and skim across my blog from time to time. In between digressing through some personal ramblings, I hope that the blog can keep inspiring ideas on what is right, what is possible, and how the bad can be replaced with the good.

Waste and peer-to-peer

It is one of the pleasures of Twitter to have a constellation of different ideas emerge, combine with your existing framework of knowledge and form new concepts. And so it is with Michel Bauwens' writing on peer-to-peer (tweeting at @mbauwens)

In the waste management context, Michel's description of the failings of information and production hoarded is spot on. Waste is the most obvious symptom of a failed mode of production.

Waste is not intrinsically waste. It is only waste because the holder has no value for it. In a different context the waste is a resource.

The difference between the two? An inability to connect the waste context to the resource context. This inability to connect is driven by a lack of information. That might be a lack of information where a local user of the waste is not aware that the waste exists. Or a potential business cannot be unveiled because nobody has the aggregated information to piece it all together. Or maybe as stupid as the timing of a byproduct doesn't match when it is needed, for no better reason than the parties didn't know. And so it goes to waste.

Think about it. Waste is generally managed by waste companies. They do not usually share their daae for fear that competitors might step in. This is not to say that they don't try to direct waste to where it can be used as a resource. But the problem is structural. It is endemic in the way business is done. They cannot anticipate all of the solutions to the problem.

Government tries to fix this by attempting a wholesale aggregation of all of the data around. So there are innumerable studies presenting the quantity of this or that waste, but it is never enough. In fact, it probably sets the industry back.

Why? Well, for one, the data is never provided in sufficient detail to enable any sort of real understanding of what is happening. It is presented in a manner that presupposes a certain type of infrastructure-bound solution. Having data creates an impression that government should then try for a waste infrastructure plan. And the whole exercise reinforces the structure where data is a resource to be monopolised.

Imagine an alternative where it is in the interests of the data holder to share it. I don't know why just yet, but set "why?" to one side. Once you have the situation, then the infrastructure is more than available. There is immense social media, immense data networks that can quickly and intelligently process data into information.

Furthermore, with the data freely available, entrepreneurs can see new patterns, new opportunities. They can slice and dice in ways that nobody could anticipate. They can open the field for collaborative solution making, a mode that is far more nimble and intelligent than silos of information hoarding experts. This has been demonstrated in "immaterial production" (ie the web), and there is no reason why it cannot also be true in material production.

You could see a world in which there is some clever way of quickly and effortlessly sharing information on waste generated and resource needs, which then leads to pop-up businesses who connect the dots. Perhaps anticipating needs, perhaps transforming wastes to meet unthought of needs.

Framed like this, I think that waste starts to look a bit silly. A problem that has arisen because we are too dumb to raise our voice and just...Share. Our. Knowledge.