Let mathematical models design your business plan

Since the Blue Economy approach opts for transformative and radical change of the existing business models, the initiatives must lead to real action on the ground. The new approach cannot build on experienced teams. The way forward is based on multi-disciplinary teams that learn by doing. These entrepreneurial initiatives translate an idea backed up by good science, into businesses that not only outcompete but generate significant economic development opportunities in the local community. In emerging economies this can be a real mechanism for lifting a whole community out of poverty. However, if such an approach was to be assessed using traditional business planning tools such as market analyses, financial spreadsheets and technology audits, the value that has been demonstrated time and again, would likely be incomprehensible. This is mainly due to the fact that such an assessment would focus only on a competitive analysis based on strengths and weaknesses, centred around core business activities built on core competences that are protected by patents.

This does not mean that The Blue Economy approach requires no strategic planning nor financial documentation! On the contrary, the approach relies on the Participatory System Dynamics Model as a tool to design, support and implement innovative business models. The mathematical modelling built into this tool informs acceleration and broadening of the implementation of opportunities, while determining the interactions with natural systems, taking into account their limitations. The power of the tool is that it can quantify tangible feedback loops and economic multipliers, enabling a clear understanding of the synergies that stand to be created by various Blue Economy-style initiatives.

In 1964 Professor Jay Forrester created the origins of this tool as an urban development model at MIT (Massachusetts Institute of Technology). Inspired by the description of the world’s problems given to him by Aurelio Peccei, a former top executive of FIAT and Olivetti, it was later converted into a global model that served as the basis for a report presented to the Club of Rome, in the famous book Limits to Growth. A simplified and modernised version of this model is available open source, permitting its use even by beginners in mathematics, who are committed to understanding and modelling the dynamics of a Blue Economy. Hence, mathematics and modelling are at the heart of The Blue Economy approach and this stops us from using a linear approach that overlooks the potential portfolios of opportunities to be created.