Investing in the Regenerative Age
Ultimately, all successful economies work because they are in service of societal need. By that definition, by the time we are done with the 2020s, society will need a vision for an economy that can stabilise and regenerate our society and planet after decades of spiralling extraction and environmental destabilisation. What will this vision look like? Circular economists have an idea. They believe we will need a new kind of bio based, participatory and distributed ‘maker’ economy, with circular flows of materials, data, energy and finance. The kind of economy that offers a critical ingredient in future place making, helping to create jobs, community, an attractive locale and lifestyle.
For investors like family offices and sovereign wealth funds who are keen to catalyse and invest in long term resilience, this kind of co-operative stakeholder owned future typically presents a conundrum and a number of blind spots. A conundrum and potentially a risk in so far as it raises the prospect that if value needs to be circulating for the common good of society and kept ‘in play’, there may be less opportunity to capture and extract it and see the system thrive. We can already see this shift with the rise of alternative company ownership models. On the other hand, it also raises a huge opportunity for those who are in the business of catalysing these economic systems on behalf of society and can take a fractional ownership at scale or some kind of tokenised investment in the public good of a thriving place. The blind spots for investors are often in relation to understanding the viable synergies of technology, markets, incentives and community. Plus of course how to invest in them, e.g., the financial instruments and vehicles that could help a co-operative community-invested model (where value stays in play) take off.
To figure out how and where to invest, we need to design experiments to understand and bring forward this future. There are examples of this already happening. I have been privileged to support the work of The Textile Circularity Centre, part of the National Interdisciplinary Circular Economy Centres Research Programme in the UK. This research programme has been exploring how traditional production segments and infrastructure are blending, with more interoperability of production platforms serving 'multiple segments' with common biological materials. An important component is the development of biomaterial digesters and spinning which creates cellulose-based fibres for a variety of uses from a variety of locally abundant sources of clothing, packaging and agricultural waste. Their work offers an exciting and important vision for a sustainable packaging and fashion industry, exploring for example how fashion users might become more invested in their fashion through new fashion services and opportunities to participate as co-creators. At a vast scale, the epic Saudi project Neom with its exciting industrial zone called Oxagon is also seeking to explore some of these synergies and in the process is creating an incredible experimentation tool for the sovereign wealth fund that supports it.
Being able to catalyse the synergies of community, data, production infrastructure, incentives, financial instruments, products and services in a way that creates shared value and better meets fundamental human and societal need will be incredibly valuable for the investors who can see them, create them and licence them. They are effectively future societal franchises. Unlike nature, we won’t have 3.7 billion years to co-evolve our regenerative system.
At Regenovate we are working with our network of partners to build multi-party, collaborative, design led, place-making venture vehicles that work through and validate scenarios in which shared value is catalysed. The investors who can figure out these ingredients, ‘bottle them’, distribute them and take a stake in their success will have found the investment vehicles of the regenerative age.