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Some issues around moving towards a more sustainable economy

The challenges around moving towards a more sustainable economy can be summarised as geopolitical, scarcity of critical materials, limitations around present technologies for recycling of products, lacking an integrated material and energy flow lens for life-cycle assessment and lacking an emergent complex systems view on the economy or any sub-system thereof. All these challenges provide opportunities for individuals, firms, sectors and nations. In effect the simultaneous move towards a digital and sustainable future provides the entrepreneurial opportunity of a lifetime. Over the coming decades we will see a reshaping of the landscape on all scales in terms of value creating ability. Some changes will be gradual and peaceful and some will be less so.

The desirable move towards a more sustainable future has recently taken on a stronger momentum as illustrated by the willingness, of primarily millennials and GenZ, to pay a premium for products and services that are more sustainable. Some businesses are changing their products and production processes, including changing and minimising inputs (material and energy) as well as reducing waste. This frequently requires redesigning the product and the production processes to enable both reuse and simpler recycling, e.g. by bolting together rather than welding together.

The changes frequently also extend to packaging and incoming and outgoing logistics as well as requiring similar changes from suppliers. In such changes business is presently moving faster than policy makers in many countries although it is likely that some countries (e.g. Germany and Norway) will use the introduction and subsidisation of mandatory recycling, with the associated development of new product and service offerings, as a tool in the economic recovery post COVID-19 pandemic.

Minimising life cycle environmental impact frequently goes hand in hand with both cost minimisation and revenue maximisation. Hence, a grounded and considered move towards a more sustainable future leads to increased profitability for firms and consequently higher prosperity for nations.

The challenges to this outcome arise out of:

• Policy makers trailing the actions taken by business in adopting appropriate regulations
• Policy makers are trailing in directional decisions and the associated public strategic investments that avoid undesirable temporary outcomes in complex systems (e.g. a lack of charging infrastructure delaying the adoption of electric vehicles, lack of investments in electric generation and transmission infrastructure to avoid local electricity deficit2, regulating to ensure grid stability when the electricity generation mix changes, lack of policies around the management of stranded assets like coal fired power stations leading to perverse market behaviour, emotionally rather than fact driven political decisions with undesirable outcomes3, etc.)
• The lack of regulation requiring disclosure of climate impact (e.g. there is no requirement for the packaging used for Norwegian pollock or shrimp to declare that they are transported respectively to China for filleting and Africa for peeling before being returned, packaged and sold to Norwegian consumers in domestic retail outlets)
• “Green” stakeholders frequently arguing models and solutions that either lack completeness (e.g. looking at material flows in isolation rather than also including the associated energy flows) or that overlook critical laws of nature (frequently the second law of thermodynamics which in practice states that the available usable energy in a closed system decrease over time) and hence may lead to discussions and decisions that end up having undesirable outcomes.
Some common omissions and challenges will be discussed below.

Disclosure of Climate Impact

There is an increasing recognition by capital providers of the inherent risks and opportunities associated with climate change. To take decisions in this environment these providers require useful information. The challenge in today’s environment is that information is inconsistent, frequently provided out of context and is normally not possible to use for comparison purposes.

Climate change risks and opportunities can be divided into two categories:

Firstly, those generated directly by a changing climate e.g. changes in sea levels; changes in sea chemistry; changes in extreme weather patterns; changes in temperature; etc. These risks and opportunities include e.g. stranded agricultural assets due to drought as a result of changing weather patterns or increased forestry harvesting risk due to lack of ground frost as a result of increasing temperatures and reduced harvesting yields due to longer insect attack seasons due to fewer sub-zero temperature days, increased frequency and severity of asset damage due to extreme weather, changing discretionary spending patterns decreasing demand for some things and increasing it for other.

Secondly, risks and opportunities that follow from the actions taken, primarily decarbonisation, to mitigate climate change. These primarily relate to the shift away from fossil fuels. This shift has implications for commodity volumes and prices as well as the logistics surrounding the flow of commodities. The shift also has implications for alternative energy generation technologies, electric and hydrogen mobility, mining and critical raw material production, carbon capture technologies, recycling technologies, legal aspects and social licence to operate.

Disclosure aimed at investors and capital providers needs to operate on two scales. The first is the scale of the firm where the purpose is to show that the firm is managing the risks and opportunities appropriately. This includes illustrating that the firm’s risk and opportunity management on the topic is effective in covering: governance, strategy, risk, opportunity, management, metrics and targets. The second is the scale of the market where the purpose is to enable the pricing of climate risk and opportunity in an appropriate way. This may include carbon footprint analysis, assessment of cost risks, assessment of revenue risks, assessment of stranded asset risks, assessment of opportunities and assessment of adaptability.

The Taskforce on Climate-related Financial Disclosures (TCFD)has rolled out an initiative that so far seems to address the firm scale disclosures in a functioning way. The challenge is the market scale disclosures that presently do not seem to have an adequately functioning approach5.

Challenges around the Desirable Climate Change Trajectory

Moving away from a dependency on petroleum and coal (decarbonising the economy) means increasing our dependency on critical metals. This because e.g. wind, wave and similar energy generation systems require permanent magnets as do electric motors. Similarly, batteries require specific metals as do the necessary electronics used to supervise energy and material efficient production systems and sometimes also being part of or supervising the use of the resulting product (built in electronics, sensors and communications equipment). This shift in dependency has geopolitical consequences as illustrated in Tabl

If this shift in dependency takes place faster than the impacted countries’ ability to restructure their economies, they will experience a rapid decline in prosperity. As an example: in 2017, hydrocarbons provided 25% of GDP and 39% of Russia’s federal budget revenues, 65% of foreign earnings from exports, and almost a quarter of overall investments in the national economy6. Will Russia passively accept to lose this given that it was the world’s largest exporter of energy resources in 2017 (2nd for oil exports, 1st for gas exports, and 3rd for coal exports as identified by both BP and IEA7)? The answer seems to be no given Russia’s recent conflict with OPEC around reducing production volumes (although other geopolitical issues may also have played a role). Russia is presently ranked fourth in the world in both primary energy consumption and CO2 emissions and has so far shown no change in its sceptical attitude towards climate change. In addition, incentives to set ambitious national decarbonisation targets are very low, especially given that achieving these would require significant investments, which are not possible in an environment of economic stagnation and financial sanctions, and given that higher prices for energy would presently be socially unacceptable8.

Modelling showing that climate-related actions outside of Russia could cause Russia’s GDP growth rate to decline by about half of a percentage point which if realised would exacerbate these issues9. The lack of restructuring in the Russian economy is illustrated by the content of the national energy development policy document which focuses on innovative and digital development of the fuel and energy complex in addition to a focus on developing and deploying new technologies in hydrocarbon production and processing – there is no mention of any technologies to contribute to decarbonisation10 . It could be argued that it would be in the interest of the EU to put in place a new Marshall Plan to assist in the restructuring of the Russian economy.

The geopolitical consequences of the increase in demand for metals required to produce batteries (primarily lithium, cobalt and nickel for the present technology generation) are also emerging. In recent years China has been taking control of the world lithium market with an eye to controlling the strategic resources necessary for the ongoing energy transition. It is estimated that China now controls nearly half of global lithium production and 60 percent of electric battery production capacity11. China is also exhibiting similar behaviour as relates to cobalt and to a lesser extent nickel. This has driven a politically as well as market motivated increase in the search and exploitation of new lithium reserves around the world. An example of this is the agreement (within the framework of the National Technology and Industrial Base12) signed in November 2019 between GeoScience Australia and the United States Geological Survey (USGS) to jointly develop a better understanding of both countries’ critical minerals reserves with a focus on 14 of the U.S. Department of Interior’s list of 35 metals and minerals deemed critical to U.S. national security and the economy13. There is a risk that China may be able, and chose, to act in the same capacity when it comes to critical metals as OPEC has done in the domain of petroleum. The shift in dependency towards metals will drive both exploration activities in the mining sphere as well as innovations to find substitutes for the metals at risk.

The innovation activities aimed at substitutes and increased efficiency in use as well as improved recycling capabilities are also driven by the scarcity of some of these metals. Substitution is a challenge since it is presently uneconomic or impossible in many applications with today’s technology. An illustration of this problem is permanent magnets, a critical component in both energy generation and electric motors. The commercially most relevant high performing permanent magnets are neodymium-iron-boron (Neo) permanent magnets14 which use Dysprosium and Neodymium to improve the magnets’ resistance to demagnetization, and by extension, its high temperature performance. Dysprosium and Terbium are also used to produce magnetostrictive devices15, but the volume produced of these is much smaller than that of permanent magnets.

The demand for Dysprosium has for some time been larger than the supply. As a consequence, the production and installation of electric traction drives for vehicles and wind turbines16 is already facing high and increasing prices for Dysprosium. In addition, there is indication of a slowdown in production due to this shortage. This has led to a slowdown of wind generator installations as well as cost increases for industrial motors and products that include them.

Although efforts are made to reduce the use of Dysprosium or to find ways of avoiding Dysprosium use altogether these have not had any major impact so far. Estimating a need of 100g of Dysprosium for each electric car produced would mean that the annual production (1800 tons with 90% coming from China) would be enough for 18 million cars (if used for electric vehicle production only) compared to the sale of 2.1 million electric vehicles and 86 million vehicles overall in 2018. This shows that it is impossible to replace the present car sales volume with electric vehicles.

This rapidly increasing demand for dysprosium used in electric vehicles will have major implications for its availability to use in other applications e.g. green energy17. This example illustrates the challenges around transitioning to more green energy and green mobility. It also explains the high focus on mineral exploration to identify new mineral deposits. The challenge is that new deposits are likely to be more expensive to exploit, and the yields lower, requiring more energy for the mining and extraction of the metal. Table 2 illustrates the challenges facing some critical materials in tomorrow’s world.

Broadening the discussion, research shows that in spite of efforts to increase the supply of the most critical materials it is estimated that by 2050 cumulative demand could exceed reserves18 for cobalt, lithium and nickel, and reach 50% of reserves for indium, silver and tellurium, based solely on the metal demand for renewable energy and storage technologies, and not considering other demands for these metals. These other demands are also likely to increase over time19. In Table 3 it can be seen that there will be a deficit of the materials above the thick dividing line irrespective of the emergence and effectiveness of any new recycling technologies. The situation for the materials under the dividing line is at first glance more positive but the actual situation will depend not only on the successful development of new recycling technologies but also on the demand growth in other material application domains, so there may in effect be a deficit situation for some of these too.

The emergence of these problems can already be seen. In 2015 46% of Cobalt and 32% of Lithium went into Li-ion battery production. For the foreseeable future Lithium is not a problem but as Table 3 shows, Cobalt is likely to be a problem. Permanent magnets for wind turbines and electric vehicles consume approximately 32% of neodymium and dysprosium whilst solar photovoltaic solutions consume 40% of presently available Tellurium, 17% of presently available Gallium, 8% of presently available Indium and 9% of presently available Silver.

Figure 1 illustrates the estimated material use per GWh to produce electric vehicles with the associated cost per tonne of material. On the right-hand side of Figure 1 is the share of the material used in the production of electric vehicles that is presently being recycled and the frequent occurrence of the number zero (meaning a negligible amount) leads us to the next challenge – that of recycling.

The Second Law of Thermodynamics and the Circular Economy

Any discussion of recycling and the circular economy concept must start with a brief review of the second law of thermodynamics20 which states that the total entropy21 of an isolated system can never decrease over time and is constant if and only if all processes are reversible. In all processes, including spontaneous processes, the total entropy of the system and its surroundings increases, and the process is irreversible in the thermodynamic sense. This means that in spontaneous processes, concentrations tend to disperse, structure tends to disappear, and order becomes disorder. The increase in entropy accounts for the irreversibility of natural processes, and the asymmetry between future and past22. Hence recycling is always limited to less than 100%, first because it costs energy to carry out the recycling of materials; and second because energy itself is not subject to recycling (entropy means that it always takes more energy to do the recycling than the amount of energy recycled)23. Hence, recycling is a transformation process that requires useful energy.

Terms such as “zero waste” and “the circular economy” are misleading and potentially dangerous if taken too literally24. This literal interpretation of a circular economy is grounded on an erroneous perception and understanding of how the natural world operates. Our present understanding is that Earth operates more like an open system than a closed system, that the biosphere is best understood using an emergent25, complex systems26 lens and that function rather than form is central to any understanding of biosphere resilience and recovery, and further that dynamic equilibrium or non-equilibrium models are preferred to static equilibrium models.

Nature is extremely wasteful, converting low entropy resources27 into high entropy waste28, which requires vast amounts of energy to recycle, and, in turn, produces further high entropy waste29. Nature has high energy intensity and it does not generally work towards greater durability, but rather fast recycling. The biosphere is a system, made up of many subsystems, each working sub-optimally for the overall functioning of the system and both inefficiency and sub-optimality are central to the functioning of any ecosystem. The numerous and continuously changing interactions within the biosphere that take place in accordance with the laws of thermodynamics (the first30 and second laws are primarily relevant) mean that it is not possible to restore any form of equilibrium state – this is also a characteristic of an emergent complex system. From this follows that the terminology associated with the circular economy is misrepresenting reality, re-enforcing the idea that nature can somehow form a template for a sustainable economy. It is implied that nature is a closed, zero waste, circular system – which it is not.

The dominating focus on material flows without taking into account energy flows and exergy31 dynamics is fundamentally flawed since resource sufficiency is intimately bound up with energy flows and the associated changes in exergy. This is because natural recycling depends on energy-expensive reduction and oxidation processes. The second law of thermodynamics shows that Earth as a system, including its biological, technical and geological processes, is continuously producing disorder or waste (see Figure 2) for which it is using free energy with the associated reduction in exergy. Only through energy continuously added from the sun is this meta-system able to continue to operate (and the sun in turn is slowly “burning up” to achieve this production of free energy and its associated increase in exergy on Earth). The biosphere uses this free energy to increase its complexity (or order) which in turn requires more energy to maintain, and in turn generates an increase in waste produced – all in accordance with the second law of thermodynamics.

From this it follows that the only way by which waste production can be reduced is by reducing complexity and a zero-wate economy would require zero complexity – a trajectory that would entail the end of all biological, chemical, technical and geological processes32.

One aspect overlooked in many interpretations of the circular economy approach is that material is degraded during the recycling process and energy is required to restore these materials to a usable state. Given technical limitations and irreversibility of some processes this is not always possible (an example of a production process that is irreversible is cement production). Recycling itself creates more waste (see the illustrative losses in Figure 3) and wear and tear is a part of the cycle for all physical goods-in-use in accordance with the second law of thermodynamics. If wear and tear is to be minimised less recyclable material is required which in turn requires higher energy input for the recycling33. For any physical product continuous maintenance is needed just to maintain status quo. In an economic system that grows this means that not only must energy be degraded (used) to achieve the growth, but energy must also be degraded (used) to maintain the accumulated results of previous growth.

This means that as growth progresses the cumulative effect of this growth (which is increased complexity) requires more energy to be maintained in addition to the increasing energy requirements for every additional increase in complexity achieved through further growth34. This means that in a theoretical zero-growth world, energy is still required to maintain the level of complexity achieved.

From the above it follows that with increased recycling there will be an increased need for energy. This additional energy requires both energy input and material input throughout the complete value chain of its generation. This means that some material can be recycled but at a cost of both an increase in energy use and an increase in material use. As material goes through this recycling it becomes ever more dispersed thereby making the energy and material cost of its further recycling prohibitive after several cycles. Even very valuable material like e.g. gold, silver and copper are only one-third recycled meaning that to maintain one kg of gold in electronics production after the average recycling activity requires adding 2⁄3 kg of new gold.

Up until 2011 less than 1% of rare earth metals were recycled mainly due to inefficient collection, technological problems and a lack of incentives35. Illustration of losses in a recycling system, excluding the dispersion (entropy) effects, are shown in Figure 3.

Taking into account the deficit in necessary materials, the increase required in new mining and ore processing activities, and the energy intensity and complexity with associated waste issues of recycling, some products containing scarce materials (e.g. energy generation and mobility products) may in actual fact not be reducing the CO2 emissions at all nor be practical from a material availability point of view.


The challenges around moving towards a more sustainable economy can be summarised as geopolitical; scarcity of critical materials; limitations around present technologies for recycling of products; lacking an integrated material and energy flow lens for life-cycle assessment; lacking an emergent complex systems view on the economy or any sub-system thereof; an erroneous view of how the biosphere operates36; a poor understanding of the implications of the second law of thermodynamics.

All these challenges provide opportunities for individuals, firms, sectors and nations. In effect the simultaneous move towards a digital and sustainable future provides the entrepreneurial opportunity of a lifetime37.

Over the coming decades we will see a reshaping of the landscape on all scales in terms of value creating ability. Some of these changes will be gradual and peaceful and some will be less so. It is worth remembering the words of Louis Pasteur: “…chance favours only the prepared mind38”.

Written by Göran Roos1


1 Chairman, NeuroTech Institute; Visiting Professor at Flinders University, Adelaide; Visiting Professor at Tongji University, Shanghai; and Adjunct Professor at the Institute of Economics and Management of the Immanuel Kant Baltic Federal University, Kaliningrad. CSIRO Fellow and Fellow of the Australian Academy of Technological Sciences and Engineering (ATSE) and of the Royal Swedish Academy of Engineering Sciences (IVA).
2 Installing fast chargers for electric vehicles will put a lot of local strain into the electricity distribution system and avoiding potential problems will require substantial investments.
3 A good example is the German closure of nuclear power. The consequences have been analysed and presented in the paper: Jarvis, S., Deschenes, O., & Jha, A. (2019). The Private and External Costs of Germany’s Nuclear Phase-Out (No. w26598). National Bureau of Economic Research. The findings are that nuclear power was mostly replaced with power from coal plants, which led to the release of an additional 36 million tons of carbon dioxide per year, or about a 5 percent increase in emissions. This in turn led to local increases in particle pollution and sulphur dioxide that likely killed an additional 1,100 people per year from respiratory or cardiovascular illnesses. The researchers calculated that the increased carbon emissions and deaths caused by local air pollution amounted to a social cost of about $12 billion per year which exceeds the cost of keeping nuclear power plants online by billions of dollars, even when the risks of a meltdown and the cost of nuclear waste storage are taken into account. This further strengthens the statement by the IEA that nuclear power will have to be a part of the energy mix to keep global temperatures from rising more than 2 degrees Celsius.
5 See pages 30-32 in Whitton, Z., McKinnon, E., Rink, R. Smith, V., Davila, I. & James, N. (2020). Building a TCFD with teeth: What the Markets Need to Price Climate Risk. Citi GPS: Global Perspectives & Solutions.
6 Trading Economics: Russia GDP growth rate (2018).
7 BP statistical review of world energy. 67th edition. (2018). International Energy Agency. Coal 2018: analysis and forecasts to 2023. OECD/IEA (2018).
8 Mitrova, T., & Melnikov, Y. (2019). Energy transition in Russia. Energy Transitions, 3(1-2), 73-80.
9 Makarov, I.A.: Russia’s participation in international environmental cooperation. J. Strateg. Anal. 40(6), 536–546 (2016).
10 Bashmakov I. Driving industrial energy efficiency in Russia. Moscow, March 2013.
11 Reuters, 2019
12 For a discussion see: Greenwalt, W. (2019). Leveraging the National Technology Industrial Base to Address Great-Power Competition: The Imperative to Integrate Industrial Capabilities of Close Allies. Scowcroft Center for Strategy and Security, Atlantic Council. Washington, DC.
13 These 35 include Aluminium (bauxite), antimony, arsenic, barite, beryllium, bismuth, caesium, chromium, cobalt, fluorspar, gallium, germanium, graphite (natural), hafnium, helium, indium, lithium, magnesium, manganese, niobium, platinum group metals, potash, the rare earth elements group, rhenium, rubidium, scandium, strontium, tantalum, tellurium, tin, titanium, tungsten, uranium, vanadium, and zirconium.
14 The market for these magnets is estimated by Marketwatch to be worth USD 2.558t in 2020 rising to USD 3.589t by 2026 representing a compound annual growth rate of 4.9%.
15 Devices that change their shape or dimensions in response to a magnetic field thereby allowing for the conversion of electromagnetic energy into mechanical energy.
16 A wind turbine uses in the order of 500 kg of neodymium-iron-boron permanent magnets per MW of rated output with around 4% Dysprosium content.
17 According to Alonso, E., Sherman, A. M., Wallington, T. J., Everson, M. P., Field, F. R., Roth, R., & Kirchain, R. E. (2012). Evaluating rare earth element availability: A case with revolutionary demand from clean technologies. Environmental science and technology, 46, 3406-3414. Projections show that the increases in use of green technology required to stabilise atmospheric carbon dioxide at 450 ppm would increase demand of dysprosium by 2600% over the next 25 years (assuming current
demands for wind and electric motor applications are representative of future needs). However, current estimates show that production of dysprosium is predicted to increase by at most 6% per year. In order to meet the expected rise in demand, production would have to increase by more than twice as much, at a rate of 14% per year. This means that by 2040 new green energy production using traditional generator techniques may not be possible due to extreme costs of component metals.
18 Reserves are defined as the estimated amount of a mineral that can be economically mined under current conditions. Reserves are a subset of resources, which are the total known amount of a mineral for which extraction may potentially be feasible.
19 Dominish, E., Florin, N., & Teske, S. (2019). Responsible minerals sourcing for renewable energy. In Report Prepared for Earthworks by the Institute for Sustainable Futures. University of Technology Sydney
20 Based on empirical observations first formulated in 1824 by Nicolas Léonard Sadi Carnot in his book “Réflexions sur la puissance motrice du feu, et sur les machines propres à développer cette puissance”
21 Entropy being a measure of the amount of energy no longer capable of being converted into work after a transformation process has taken place.
22 Zohuri, B. (2017). Dimensional analysis beyond the Pi theorem. Berlin: Springer.
23 Energy is conserved (first law of thermodynamics) but the useful component (exergy) is not conserved. It is used up (destroyed) in every activity or process.
24 Both the economic (and environmental movement’s) mainstream’s profound ignorance of physical reality is unforgivable over a century after the ideas of thermodynamics were clarified by physicists. This ignorance leads to erroneous public debate and bad advice to decision makers.
25 Phenomena that emerge from interactions at a lower level or scale and are observed as patterns on a higher level of scale.
26 These systems are multi-state variable dynamical systems characterised by a moderate degree of structured interactions and interconnections. State variables in these systems are often characterised by heterogeneous parameter sets and updating rules. Spatial and network relationships are often non-uniform and violate mean field theory assumptions. System behaviour is characterised by path dependence, nonlinearities, bifurcations, and threshold behaviour. The behaviour exhibited by and in these systems arises from the interplay, in densely interconnected systems, between multiplicative causation and positive and negative feedbacks. A signature of such systems is radically disproportional causation or nonlinearity. Nonlinear systems can undergo sudden flips between stable states or equilibria. A second attribute is the emergence of structured macroscopic patterns that are the outcome of the independent microscopic interactions of the entities in the system. These macroscopic patterns often have enormous causal power.
27 Meaning resource where the energy exists in usable form
28 Meaning a resource where the energy exists in a non-usable form
29 This statement is illustrated by Georgescu-Roegen, N. (1979). Energy and matter in mankind’s technological circuit. Journal of Business Administration, 10, 107-127: Consider an hourglass. It is a closed system in that no sand enters the glass and none leaves. The amount of sand in the glass is constant—no sand is created or destroyed within the hourglass. This is the analogue of the first law of thermodynamics: there is no creation or destruction of matter-energy. Although the quantity of sand in the hourglass is constant, its qualitative distribution is constantly changing: the bottom chamber is filling up and the top chamber becoming empty. This is the analogue of the second law, that entropy (bottom-chamber sand) always increases. Sand in the top chamber (low entropy) can be used for work by falling, like water at the top of a waterfall. Sand in the bottom chamber (high entropy) has spent its capacity to do work. In a thermodynamically closed system, the hourglass cannot be turned upside down. If it was possible to turn it upside down to get more sand that can do work, it would still require more energy than that generated by the sand falling.
30 Energy cannot be created or destroyed
31 Exergy is the energy that is available to be used
32 Skene, K. R. (2018). Circles, spirals, pyramids and cubes: why the circular economy cannot work. Sustainability Science, 13(2), 479-492.
33 As an example: Recycling non-rusting stainless steel into its constituent raw materials requires more energy than recycling rusting iron.
34 This since the further away a system is from its thermodynamic equilibrium (i.e. the more complex it is) the larger the throughput of exergy from outside the system to maintain this thermodynamic state (or complexity) of the system.
35 Binnemans, K., Jones, P. T., Blanpain, B., Van Gerven, T., Yang, Y., Walton, A., & Buchert, M. (2013). Recycling of rare earths: a critical review. Journal of cleaner production, 51, 1-22.
36 It operates inefficiently with large material and energy losses, sub-optimally on any subsystem level, far from equilibrium, emergent, with high energy intensity, and with fast recycling.
37 Like in all changes there will be winners and losers. On the national level the winners will be those high economic complexity countries where the long-term national direction is set out in collaboration between the public and private sector and underpinned with clear policy instruments and were this direction is kept reasonable stable for a decade or so. On the sectoral level the winners will be those sectors that can respond early to the changing sentiments and boundary conditions and that are able, through e.g. R&D and standards, to create and appropriate profit pools in new or modified value chains. On the firm level winners will be firms that combine high absorptive capacity, high managerial capacity and high levels of agility with an entrepreneurial outlook and hence can identify opportunities early, identify and deploy the necessary technologies, competence and capital to realise these opportunities, and develop the appropriate business models for the appropriation of the value created. On the individual level it will be those individuals that embody flexibility, adaptability, deep competence in key domains, interpersonal skills, systems thinking ability and creative problem-solving ability.
38 Dans les champs de l’observation le hasard ne favorise que les esprits préparés. Lecture, University of Lille (7 December 1854).

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