Mad Scientist Radio – Episode 5 – The Blue Economy

A special edition of Mad Scientist Radio hosted by Ian Hopkinson and with special guests Dr Martin Blake and Leigh Baker. We take a break from talking about SEO and discuss the future of sustainability and how we can all be consciously engaged and involved in whole systems thinking. We find out that Green is very one dimensional when it comes to the approach and the economic models, where as the ‘Blue’ way of doing things is more realistic and looks at the human, financial and environmental synergies that can exist if we look through a big picture lense. Giving situations and strategies more thought and work together to be smarter and more considerate of the long term view.


IAN: I am Ian Hopkinson and thanks for joining us once again. I’ll be hosting on my lonesome today with Andrew waving and commenting from the back bleachers but as he doesn’t have a microphone we won’t be able to hear him. We have a special edition to the show lined up for you today. We’ve been talking about SEO but today we are going to be talking about the blue economy. So a little bit of sustainability chatter for you. We’ve got special guests Dr. Martin Blake and Leigh Baker here with us. Dr. Martin Blake is the international founder of Global Sustainable and recognized authority on the Blue economy. He is also in fact the global leader of Blue Australasia. Leigh Baker also joins us and shes the Victorian leader blue Australasia. Shes also the author of The Deep Green Profit Handbook and her own venture Balance3 sees her as a consult business and system analysts, coaching and training businesses in business systems, communications, leadership and innovation. Welcome to the show guys. I’ll start with you Martin, what lead you to the Blue economy

MARTIN: Oh it was a long journey. I first started working in the area of Sustainability and corporate social responsibility best part of three decades ago and it was actually before the names sustainability, corporate social responsibility had been coined and indeed when I first started in those professions the word green had not been described to the environmental movement. Green described someone as naive as opposed to having a predilection for the environment sustainability so its been a long time.

IAN: Yes and the word has somewhat changed meaning several times over hasn’t it. Can you describe the history of the Green movement because i think its important for people to understand that

MARTIN: Sure. I suppose the terminology first emerged in the ‘60’s, early 70’s in response to big organizations doing what was deemed as harmful to the planet. It sprung up alongside the CND, the ban the bomb movement and people were rebelling against what they saw as damage done to the planet big corporates and big organizations. Alot of good work was achieved in bringing awareness and consciousness to the agenda through NGOs and activists movements. More recently you have seen the attention to certain practices such as Whaling by Greenpeace and the activities by Sea Shepherd are very media worthy, still drawing attention to things that perhaps with a social conscience or environmentally conscious would like to be seen addressed

IAN: Do you think the Green concept is still working?

MARTIN: Not as well as it was. I believe it still has a role in informing peoples awareness of where things need to be focused upon but in actually terms of how the green economy and the issues of addressing the green revolutions as it was has become more impoverish because we’re now in far more complex interconnected, interrelated, systemic, transformational change. And the Green agenda was predicated on a different paradigm.

IAN: Okay so whats the thinking behind Green

MARTIN: If you look at the way the Green agenda and laterally the Green economy has emerged, it has been based on a philosophical paradigm that has been overarched by teutonian scientists and therefore it is reductionist in nature, it seems to make a problem go away or less bad by incrementally, transactionally taking, engineering scientific solutions to reducing the impact of the particular problem. So it ends up making the problem less bad but in a linear transactional way and the problem is that the investment methodology aligned with it is also based on a linear paradigm. People will invest in a green solution trying to solve a problem and when the investment required hits the investment hurdle rate or diminishing returns dictate return on investment or return on equity or net present value isnt being met any longer then the whole process gets the buffers and you end up with effectively a mediocre solution which is less bad than it previously was. These days less bad isn’t any good enough. We need to go beyond less bad and the transactional and move to a transformational approach

IAN: Well thats right thats a one dimensional approach I guess, so what does Blue bring to the table that Green doesn’t?

MARTIN: So if we look at why back in the mid 90’s to the early 2000’s, the founder of the Blue economy, the person who articulated a name which is Professor Guntar Pauli. He chose the name The Blue Economy because when you take the planet earth viewed from space, it is the blue planet and when you look at the planet viewed from space you cannot help but understand that the planet is a complex system. It has within it a economics systems, weather systems, ocean systems, financial systems, banking systems, geo-political systems, currency systems, radio systems, digital systems. There are all kinds of systems going around the planet in different ways and theyre all interrelated cause they’re all contained within the system. So if you actually look at the incongruity of dealing with complex problems in a systemic environment with a linear response its almost inevitable to deliver sub optimal outcomes

IAN: So the Blue concept is pushing more the spirit of cooperation between the systems?

MARTIN: Yea, the Blue economy is predicated on system thinking, it recognises complexity theory, it recognises that the world is comprised of complex adaptive systems and that being able to operate on a field of complex adaptive systems requires a systemically derived approach. Linear derived approach will always be impoverish so if you need to solve complex problems in complex times you need transformational approaches to deliver transformational solutions and thats what the Blue economy does differently. The overarching philosophy differs from the Green economy in that it is polistic, based on system thinking, recognises complex adaptive systems, it recognises that if you intervene into a system it will have outputs and outcomes, some of which are expected and some of which are perverse, some of which are unwelcome and thats how you need to deal with it.

IAN: Leigh, i was interested to find out more about the thought process that lead to the Blue economy, so Guntar Pauli being the founder. What was going through his mind in this concept and image for him?

LEIGH: Guntar was interested in the environment back in the 90’s and his first area of interest was in pollution of rivers in Europe and so he decided to do something about it, and he came up with a bio friendly/degradable detergent. He was really pleased with that, it sold really well and it stopped polluting the rivers of Europe. But then someone pointed out that the detergent was made of palm oil. In turn he substantially increased the demand for palm oil which was leading to deforestation in the tropics and the endangerment of several orangutan habitats. That is very much the example of if we only look at a small element of the symptoms of the problem then we are not looking for is this the whole problem’ and is this the systemic solution

 IAN: Taking in account of all the systems once again and how they work together is the key

LEIGH: And this is one of the ways it makes distinction between Green thinking and Blue thinking. How it has evolved is that Green thinking says ‘how do we do business now and how can we make it less bad? A bit less poisonous, fewer emissions, use less materials’ rather than ask the real question that needs to be asked. The real question is ‘how can we do this so it is good’. Good for everything, bottomline, ecosystem that keeps us alive and more good to the community that we do business in. While we set up a false dilemma we get Green thinking and expensive products. Blue thinking is the next generation

IAN: So once Guntar realised what was going on what was next?

MARTIN: Well Guntar decided he could no longer just be looking at that problem of solving river pollution without it being more systemic so he left that particular business and he articulated the phrase ‘The Blue Economy’. It was intended to be systemically derived, politically appreciated of systems and he wanted to create innovations and solutions that would create transformational change not just a linear approach to a transactional problem so he started to identify where were the synergies between different initiatives and technologies, where could innovations be linked together in clusters rather than linear supply chains and how could you make those linkages and clusters more resilient, more abundant, more successful where all parties one, where all entrepreneurs one, where the communities one and all is good for the environment, for people and commerce

IAN: Who did Guntar look too for the answers for those questions?

MARTIN: Guntars traveled the world extensively in search of good examples and his book which is called The Blue Economy actually looks at how over a period of 10 years a 100 innovation could create 100 million jobs and in doing so not only creates abundance and prosperity for the people who work in those new jobs, in this new area but also will do good for the planet and society

IAN: Why do Green solutions tend to be more expensive?
MARTIN: As we mentioned before Green solutions are predicated on making things less bad, its fundamentally driven by investing in into making incremental change until its no longer feasible  to invest more money into it. Diminishing returns set in because the model that drives business in that linear approach is the economic model that was conceived by Milton Freidman. Freidman economics is based on scarcity and investing in things until you get a rate in return and stopping when you dont. So often in the Green economy, Green solutions become the most expensive

IAN: Leigh Baker, back in 2009 you wrote a book called The Deep Green Profit Handbook, what’s changed in that time?

LEIGH: Probably writing it again, the name would change. At the time of writing that book I was deep in what I call regenerative thinking. Finding new ways for business that was actually good for community, eco systems and good for the bottom line because we get trapped in dilemmas and I wanted to emphasize by calling it The Deep Green Profit Handbook that if you go beyond ordinary, so if you go beyond green and i didn’t have any knowledge about Guntars work which was in parallel with this and thats why I called it Deep Green because there was more than regular green thinking about making something less bad so you dip beyond the title of the book and it says, there are 7 principles and they are pretty simple. There are no wastes, only bi products that haven’t found a value for. Every product has a value behind it and if we focus on the green and not the product then we’ll find better ways to do good business. Another of the principles is surprise surprise copying nature. Which is actually attempting to simplify the term biomimicry using natures building design experience whether its copying the nose of a Kingfisher to stop a bullet train breaking the sound barrier everytime it comes out of the tunnel or any of the thousands of biomimicry innovations. There is a wealth of knowledge that we already have

IAN: There is and I think biomimicry, maybe not the term but the concept of studying nature has been around for quite some time. What we learn from nature, how do we translate that into a form people will understand and change their way of thinking their way of life?

MARTIN: So, thats a fascinating question and of course understanding and living in cooperation and collaboration with nature isn’t actually a new discovery. If you look at indigenous people and indigenous tribes all over the world they knew how to do that. They were much closer to their climate change and how weather patterns affected were they would be and where water would be found, how they would interact with the planet so ancient wisdom with ancient people was very much in tune living in accord in harmony with the natural environment, since the beginnings of the agriculture and then subsequently the industrial revolution that we have forgotten those alignments with nature and now that we are discovering them and we’ve coined the phrase ‘biomimicry’ but back then they didn’t have the language, they had to practice


IAN: Thats right, we have an economic system that is very entrenched in our lives which has to plug in obviously which is necessary to bring things together and say ‘business can think about being Blue

MARTIN: Lets take that question, how can a business aspire to embrace the Blue economy. And the answer to that is simple really is that it needs to evaluate all of its surroundings and where it sits in its own complex adaptive system. Where does it get its supplies, where does it get its energy, where does it secrete its waste, how does it deal with those issues, what are the social issues in the communities within it operates, what are the financial constraints, what are the environmental constraints, what are the climatic weather constraints and then looking at all of the issues, the problems and the opportunities come up with the systemically derived transformational approaches to be more in tune with that complex adaptive system. If you continue on a strategy that is not in tune with that moving complex system that is dynamic in nature then there is only one inexorable outcome. If you don’t adapt you will exit

IAN: That is very much the case in the digital realm as well from the point of view of Madscientist Digital as far as the integration bricks and mortar digital presence, it seems people are little bit lost in, not seeing that as a total presentation of their business and them being integrated. I suppose its a similar concept here where our lives are very much in a state to be looked at in its whole like you said a realistic point of view, which has to be taken at this stage

MARTIN: And we live in very dynamic times which is constantly changing and to consider that you can have a linear pathway through a complex adaptive system that is dynamically changing even as you’re creating the linear pathway and before the ink is dry the system has changed so its never really fit for purpose and one goes through what strategist will call a process of ad hoc reconciliation and you look backwards and say ‘how do you rationalize ad hoc how you got to where you are cause in truth you could never really navigate it or predict it. The more contemporary way of looking back is to work in scenarios rather than plans and in this particular scenario we might take that particular approach and if this scenario we might take this particular approach but to have a linear plan to navigate a complex system is almost always to doomed to  failure.

IAN: Leigh Baker, so we have talked about a lot of great ideas here but how do we really do this?

LEIGH: First thing to say is these great ideas have been around for probably 20 years now and theres a really great case study that started back in 2001 with a company in the U.K called Bulmer Cider. They were struggling in the face of alco-pops coming onto the market and some very big companies coming behind them and there was this little company making cider in Hereford, the way they always made it. They were in very big trouble and they decided to give this stuff a go so they went and had a look at their operations and they brought in some energy experts and they also brought in Gunter Pauli. They had a look at their whole operation and they worked through it step by step. So they went out into the orchids and discussed what happened. ‘Okay so we grow some apples, we pick the fruit, we make some cider, then what happens?’ ‘We prune the apple trees, what do we do with the prunings? We rake them into windrows and then we pay somebody to come in and burn them.’ The energy expert in the room said, ‘Well you know what we can do, we can gather up all those prunings, chip them up and burn them and we can use that to generate energy.’ Well yea, thats a step forward but your still downcycling something, you’re taking wood and you’re burning it and you’re creating emissions. So fortunately Gunter Pauli was there in the room and he said, ‘Did you know that there are some very high value mushrooms that love to grow on apple wood so instead of having a waste that you have to dispose of what you can do is you can chip up these apple tree prunings and use them to grow mushrooms on.’ And this was in the U.K. and they were talking about a growing Asian population and they like they’re expensive mushrooms, where do they get them at the moment, well they air freight them here. So one thing you can do is use your prunings to create another cash flow, another crop, another income growing mushrooms

IAN: Excellent

LEIGH: And there is more but before I move on to that next good thing its worth pointing out that they made 4 times the revenue from growing mushrooms than they made in making cider. They stopped thinking wastage wise and they started thinking ‘Where’s the value in this if we take a whole system skew’. So once they had their mushroom crop, now if you think about mushrooms you’ve got the fruiting bodies that we see the things growing above the ground and which we pick but below that, all the fibres, the roots of the mushrooms are also a really valuable vegetable protein and what they found out is that, this is the time of mad cow disease in the U.K. What was causing mad cow disease is essentially they were feeding them animal products to herbivores and that is essentially what caused mad cow disease so what they found they had is lovely food stock, vegetarian protein to feed the cows so not only they were selling the mushrooms but…

IAN: You can’t make this stuff up can you

LEIGH: No, this is so good you can write a story on this but thats how they did business now Bulmer Cider makes cider still and they’re big enough to send it all over the world and they sell mushrooms and they sell livestock feed

IAN: Once you see these businesses do it in motion then they become addicted in finding other ways, other parts of the system they can utilise

LEIGH: Because again we are dealing with complex systems that are going to keep growing and keep changing. This becomes an ongoing process almost like surfing, scanning for what’s going on and adapting with the system that you are part of.

IAN: So thats a great example of business who saw it in action and then were able to implement it. How do we get businesses to that stage where they are willing to give this a try

LEIGH: To me the first thing is to tell the story, this is not a story that gets mainstream airplay and we’re not looking for every business to get it immediately, we are looking for businesses to get that there is an opportunity and want to realise that opportunity and that’s where our newly formed company Blue, which is for Blue Australasia is coming together with an expert team to be the coordinators and the facilitators for businesses who do want to play in this in this new space of win-win-win thinking. Finding new ways for local solutions that means local needs that means creating new local jobs regenerating new local eco systems

IAN: Excellent you will be able to group businesses together not just as part of the education process but creating a new mindset but also they will be able to pair together to help solve these solutions

LEIGH: I think we are going to be a connector

MARTIN: A catalyst

LEIGH: definitely, connecting businesses who want to explore it facilitating the exploration process, teaching how to see the systems because we are fairly habitually stuck in galinier economy, the production line thinking that bless him Henry Ford developed which was fine in the 1920’s but it is 100 years old now. So we help people to see the systems, we help them think circular, we help them think the blue innovations, the biomimicry and to create collaborations with local businesses and local communities

 IAN: And it seems to me that the true innovations we haven’t even realised lie in that cooperation

MARTIN: Thats absolutely right and if you look at what the idea at creating blue in Australia was and the company Blue Australasia it was to be the catalyst change, its to link other organisations and other people together and identify the synergies between the connections. To cluster them, not to work in straight lines and to find how can we do things differently, how can we deal with waste and supply change in creative ways that brings businesses to the point of flourishing, thriving and being abundant and serving their communities and where self interest is not a bad thing but when you have self interest it actually serves the system as a whole and not just an individual or the few. So its just a different way of doing things. So Ian, you’re the founder and CEO MadScientist Digital and as Blue economy and Blue systems thinking is a different way of doing things i’d actually like to ask you a question and see if this interview has inspired you to consider looking more deeply into the blue economy and seeing if you can aspire becoming Australia’s first Blue digital company


IAN: The answer is yes, yes, yes because I think my understanding of it is ironically one dimensional before today, we’re at a stage in our business where we are going through a number of transformations and I suppose the style and the culture of our business is that we are very open minded not just about ourselves as individuals and I think thats something a lot of businesses struggle with. ‘Who am I, what am i doing here,’ all those sets of burning questions that need to be answered for then you will get other people involved and that starts a culture. It’s a similar concept with this whole systems thinking and blue economy inspires. I would very much be interested to delve into examples of other kinds of companies other than the agricultural ones that we have talked about because the agricultural ones have I suppose when you understand the concepts and you start thinking that way theres some more obvious sort of processes that link together. I know that it will be the same in Digital and other forms of other businesses technology findings related businesses. So I would be interested in delving more into that because I can already see that we will find a benefit not just for us but for our partners and our clients because we have a number of clients who are in not necessarily businesses that are indirectly related to the environmental thinking but this changes all that. This makes this part of every business, this is not just every individual, it’s not just one plus one equals two, the mushrooms and the apples worked together. This is more than that

MARTIN: Well look, that didn’t take long. 45 minutes long and already you’re talking like us like an Blue economy expert. So welcome to the world of digitally Blue

IAN: Well thank you very much Martin and Leigh for coming in today, I appreciate you time. Its very exciting

LEIGH: It is

IAN: Thank you


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