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Sustainable development of territories

The path of the economy of functionality and cooperation

This text was commissioned by ADEME from ATEMIS. It is intended to serve as a reference text in the framework of a project to support territories embarking on a path of economic, social and ecological development mobilising the reference system of the Economy of Functionality and Cooperation (EFC).

Our hypothesis is that the main challenge to be taken up at the scale of sub-national territories is the capacity to think and implement an articulation between:- a development model responding jointly to the ecological, societal and economic challenges of the territory;- and the emergence of a new economic model at the level of the enterprise, whatever its status (public limited company, limited liability company, association, cooperative, public or semi-public), i.e. at the scale sometimes referred to as « micro-economic », where a significant part of the value is created. Our hypothesis is that this articulation takes the form of territorialized cooperative ecosystems.

To download: developpement-territoires-efc_201901-note-2.pdf (1.2000000476837)

There are six parts to the document:

  • Firstly, we will come back to the reasons that explain the difficulties of public and entrepreneurial actors to build effective responses to the challenges of sustainable development;

  • Secondly, we will present the conditions that need to be met / the changes in professional attitudes that need to take place at the level of sub-national territories in order to embark on a path towards a sustainable model;

  • In a third phase, we will provide information on what an economic model is;

  • In a fourth step we will present the main characteristics of the economy of functionality and cooperation;

  • In a fifth step, we will describe how to involve the actors in the definition and implementation of territorialized cooperative ecosystems by mobilizing the reference frame of the economy of functionality and cooperation;

  • In a sixth step, we will end by describing the mechanisms adapted to support local actors in this new economic/development trajectory, by questioning the links/complementarities with existing mechanisms.

1. Sustainable development of territories: a lot of effort for uncertain results

Local authorities are questioning their dynamics and their development model. Confronted with a variety of environmental and societal challenges (mobility, housing renovation, population health, energy insecurity, accessibility of services, pollution, waste prevention and management, etc.), they implement responses that often struggle to solve the problems encountered. There are several reasons for this:

  • The production of master plans is resource-consuming and does not prepare well for the reality of implementation, ignoring the main difficulty: the ability to build a framework for action and governance that enables public-private-associations-citizens to work/cooperate with public-private-association actors in the same process.

  • Sectoral actions carried out in silos, i.e. not articulating the different fields of public action with each other, and poorly articulated scales of action. In order to be a credible alternative to car ownership, sustainable mobility must be applied at the level of daily life (the neighbourhood), at the level of the living area (home-work shuttles) and at the regional/national/international level. The response must combine different technical services related to the various facets of mobility, while ensuring that the actions carried out are properly coordinated, particularly in the area of behavioural and lifestyle changes brought about by other services.

  • It is very difficult to construct responses and steer the adjustment of public policies on the basis of uses and lifestyles, often contenting oneself with seeking to act on behaviour. Developers often consider, for example, that the future inhabitants of an eco-neighbourhood, if they have access to public transport, can do without a car and therefore without parking spaces. In reality, this is not so mechanical!

  • The financing of activities is part of a scheme in which the two options are public spending directly by the local authority’s services or the delegation of these services to external service providers. This delegation can be backed by a monetary counterpart in the form of a subsidy and/or the sale of goods or services (delegation of public services, for example). These methods of financing appear in reality ill-suited to the construction of a convergence of interests between the different categories of actors, which results in the jeopardising of many initiatives when the dedicated public funds are reduced or redirected towards other priorities. Public actors are not the only ones to intervene at the level of sub-national territories. Economic actors, whether they have a classic private, associative or mixed economy status, are also at work. However, these actors are also being challenged by new ecological, societal, labour and governance issues. Whether they offer goods or services, they have, until now, almost always been built on an economic model based on the principles of industrial dynamics:

  • the definition of standardised or even standardised offers, which they seek to duplicate,

  • the search for productivity gains based on economies of scale and labour specialisation,

  • business income based on volumes produced and sold (number of goods or hours of services rendered). In such a framework, economic players find themselves faced with unbridled competition linked to market saturation and the reduction of public budgets (which weighs on the conditions for awarding public contracts). This situation pushes them to lower their prices and reduce their margins, which leads to a search for lower production costs with the consequences of tensions on employment (relocation, job cuts), on work (intensification of work, loss of meaning, exhaustion), ultimately resulting in the quality of the offer and customer satisfaction.

Moreover, this industrial logic does not favour a convergence of interests with public actors. For example, an actor paid to collect, sort and treat waste has no interest in reducing the volume of waste to be treated. On the contrary, he has an interest in seeing this volume increase, which puts it in contradiction with public waste prevention policies.

2. Create a favourable breeding ground for the emergence of cooperative territorialised ecosystems.

Going beyond the limits to public action, as presented above, implies meeting several of the following conditions:

  • The existence of a pool of actors capable of making a joint commitment, of cooperating in the elaboration and implementation of solutions that support the political aim of the territory; because the political aim alone is not enough to give impetus to sustainable initiatives;

  • A great attention to the societal innovations that appear on the territory. They are the expression of the needs of citizens and of new emerging lifestyles. They also reveal the capacity of companies and individuals to act by mobilising the intangible resources of the territory.

  • A posture that implies starting from uses and lifestyles to build responses ("bottom-up" logic). Our habits of thinking about innovation, resulting from the processes of technological innovation, too often lead us to think about innovation according to a prescriptive scheme ("top-down" logic) of the design - experimentation/stabilisation - development - duplication type.

  • From this perspective, there is a great temptation to want to duplicate/import local successes to other territories, based on the result (for example the legal form imagined), without being able to/knowing how to apprehend the more invisible elements that have fuelled the process (skills, confidence, partnership practice, opportunity, a maturation period often lasting several years, etc.). With a risk that the solutions are not rooted in the culture, history of the territory, its resources, or even the expectations of its inhabitants.

  • An articulation between the different fields of public action that goes beyond the omnipresent sectoral division within communities. For example, separating the issue of transport from the subject of fuel poverty makes no sense, since travel between home and employment areas can also weigh, sometimes quite heavily, on household energy bills.

  • A good articulation between the scales of action. The relevant solutions do not stop at the administrative courts of the territories. Working across the board, between different departments of the same local authority, or between the equivalent departments of several local authorities, is becoming a necessary practice. The notion of « living territory » is increasingly used.

  • Management based on feedback and not on master plans: action precedes thought and makes it possible to specify what is desirable and feasible and to assess the relevance of initiatives. When most of these conditions are met, there are still two decisive points that can hinder the sustainable development of territories:

  • The development of cooperation. In a good number of projects (Positive Energy Territories (TEPOS), Zero Waste, Zero Waste Territories (TZDZG), Territorial Air Climate and Energy Plan (PCAET)…), public actors are making major efforts to « drive » cooperation dynamics between actors. But they rarely have the means to evaluate, reinforce and intensify it.

  • Sustainable funding. Very often, local authorities provide the initial funding for projects, without paying sufficient attention to the different forms of contribution that will subsequently make it possible to sustain the project. However, the diversity of potential forms of financial contribution requires revisiting the question of the value produced, the forms of evaluation and the modalities of monetary and non-monetary contributions. This « financial engineering » must be equipped. This concerns not only the regular financing of the structure but also the financing of investments, particularly intangible investments.

3. What is a business economic model?

The economy of functionality and cooperation is defined as a new economic model. But what is an « economic model »? The term « economic model » covers a wider range of issues than what is generally referred to as a « business model », which in French is translated as « modèle d’affaires ». In fact, an « economic model » articulates five dimensions that link the dynamics of the company to its economic environment:

  • A « value proposition » linked to demand. This proposal must be in line with the expectations of households and their consumption patterns, on the one hand, and the expectations of companies and public or semi-public bodies and their production methods, on the other. Two remarks should be made: the first is that these expectations are not homogeneous according to the consumption patterns desired by households, and according to the strategic choices of organisations influencing their mode of production; the second is that these expectations may change over time and space. In the current period, the appropriateness of linking the ‘value propositions’ of organisations with the demands of sustainability is a matter of open public debate.

The « value propositions » represented by industrial goods or services conceived as quasi-goods are questioned because of the non-quality of their use and the deleterious effects they can have on a societal level (negative externalities): for example, responding to a need for mobility by offering a car poses problems of use, especially in cities, pollution effects and effects on the cost of land which increase social inequalities.

  • A « productive configuration » based on a specific organisation of work. The productive configuration refers to an internal dimension of the company: the organisation of work to produce the value proposition. It also refers to an external dimension: inter-enterprise relations to obtain the material and immaterial resources necessary for this production…. For example, the constraints on the organization of work are not the same if the enterprise produces goods individually, in small series or in large series; if the enterprise produces goods or services; If the enterprise produces logistics services, repair and maintenance services, information services or immaterial and relational services… Moreover, the organization of work will not be the same if the enterprise is concerned with the renewable nature of material resources, their life cycle and if it gives a strategic place to immaterial resources associated with the human dimension of its activity. The inter-firm dimensions may be part of a linear or circular value chain or cooperative ecosystems that are embedded in their relationships.

  • A method of contractualisation of the company’s relations with its customers or users, its suppliers, etc. Some call this dimension of the company’s activity a « business model ». It corresponds to the conditions under which the company transforms the different dimensions of the value produced into monetary value. This contractualisation may be based on the logic of markets according to different forms of competition; it may be based on monetary agreements on the basis of commitments, sometimes relying on non-monetary logics of gifts/counter-gifts. This dimension of the company’s activity leads to the development of relationships between actors based on a balance of power within a value chain and/or cooperation within cooperative ecosystems.

  • A mode of distribution and accumulation of monetary value. On the financial level, the enterprise is a place of accumulation of value through the investments it makes and the accumulation of immaterial resources stemming, mainly, from its experience. It is also a place of distribution of monetary value. This concerns first of all the relations between the income of those who work in the enterprise and those who have contributed capital. Then, within each of these categories, the modes of distribution of the monetary value between the different types of actors involved in particular within a cooperative ecosystem.

  • A mode of governance. This dimension of the company’s activity concerns both the conditions on the basis of which decisions are taken between internal actors in the organisation of work (the management mode); between the actors involved in the work and the actors contributing to the financing of the company; between actors representing employees and capital in the traditional way; by including the beneficiaries or even the territories according to the most innovative forms of governance (example of SCIC - Société Coopératives d’Intérêt Collectif - a cooperative society of collective interest).

Describing and analysing an economic model therefore requires an interest in each of these dimensions and the way in which they are articulated and integrated into a coherent whole (or not) within a strategy relating, in particular, to sustainable development. One way of describing and analysing the model is to identify for each of the five dimensions the way in which the real dimension of the activity is carried out, the way in which the monetary dimension associated with the activity is managed, as well as the legal and contractual elements that govern them.

4. The reference framework of the economy of functionality and cooperation

A definition The Economy of Functionality and Cooperation is an economic model which consists in designing and producing solutions based on the integration of goods and services, associated with the sale of a performance of use and/or inscribed in a territorial dynamic. The definition and promotion of a use performance, i.e. no longer selling means, i.e. goods or time, but a service value, allows the decoupling between the creation of value and the volume of means mobilised (goods and services). The material dimension of production can take second place to its immaterial dimension.

For example, the intervention of a cleaning woman in a home generates what useful effects in terms of quality of life, peace of mind, time savings? What is the acceptable expenditure of the beneficiary in the field under consideration in view of these expected useful effects? There are two consequences to this questioning:

  • on the one hand, the identification that a person’s intervention in the home refers to dimensions of value other than the mere cleanliness of the premises. This opens up a space for service innovation around housing management and support for the organisation of people’s daily lives;

  • on the other hand, the question of acceptable expenditure reveals that in many cases this expenditure could be much higher than the hourly cost of the salary multiplied by the number of hours of intervention, which today constitutes the method of remuneration for the person.

There is therefore room to develop an offer with a higher service value associated with higher remuneration.

It is the more or less extended scope of the integration of goods and services constituting the solution that makes it possible to take charge of more or less significant social, societal and environmental externalities. The resulting « integrated solution » is an opportunity to extend the scope of the expectations taken into account in the areas of « living in », health, mobility, information and knowledge, food, for example, and thus to give substance to the challenges of sustainable development.

Example: Urbanéo is a company that on the one hand designs street furniture (bus shelters in particular) and on the other hand carries out the maintenance and upkeep of this furniture. By mobilising the EFC’s reference system, Urbanéo identifies that its offer could take into account mobility issues, in particular to promote performance in terms of inter-modality. The value of the offer increases by integrating a social issue. Moreover, the integration of the good (the furniture) and the maintenance and upkeep services in an integrated solution creates a convergence of interests between Urbanéo and the client communities to optimise the quality and durability of the good (the contract is based on the provision of furniture in good condition: maintenance becomes a burden for the company beyond that provided for in the contract).

In fact, the trajectories towards the economy of functionality and cooperation distinguish between two different scenarios:

  • Trajectory 1: The dynamics centred on use performance means no longer selling goods or services separately from each other, but integrating them and making them available to its target audiences in return for a charge based on the results obtained from this integration. This shift to service dynamics makes it possible to take a new look at the life cycle of equipment and the conditions of accessibility to services.

  • Trajectory 2: The dynamic is based on the design and implementation of solutions designed to respond to challenges identified at a territorial level and considered central to the ecological, societal and economic transition. It is the dynamic of extending the perimeter of integration of goods and services that structures the sustainable dynamics of the territories: the performance of use contributes to the dynamics of the territory. The change in the perimeter of activities and actors engaged in cooperation around « integrated solutions » makes it possible to deal with a growing number of negative externalities suffered by the territory or to develop positive externalities that are useful to it. This second economic dynamic changes the relationship between companies and territories, on the one hand, and the human dimension of work, on the other, by renewing the approach to cooperation.

The operational concept of use performance is based on a precise understanding of lifestyles and consumption patterns, on the one hand, and work organisation methods, on the other. Maintaining a use performance means cooperating with the beneficiaries, not seeking to act on people but with them. For example, one of the dimensions of use performance linked to the area of « food well-being » is a positive effect in terms of the health of « eaters ». To be achieved, this ambition requires the involvement of eaters who will have to change a certain number of food uses (learning about nutritional dimensions, changing the type of products consumed, developing new ways of cooking linked to organic food, etc.).

Accompanying eaters in a perspective of good eating habits will therefore imply the implementation of solutions integrating a set of goods and services, proposed/implemented by a diversity of actors gathered within a territorial ecosystem. In the example above, the integrated solution must jointly offer fruit and vegetables from market gardeners who respect the environment and consumer health, a local sales/distribution service, personalised nutritional advice, possible support for cooking practice (workshops), etc. It is also on this condition that the envisaged performance of use can be maintained. The use performance backed by the integrated solution and the intention given to the external effects are levers for taking charge of positive effects in environmental, social, societal and economic terms at the territorial level. These effects are inscribed in the company’s own economic model. The solutions relating to « food well-being » make a positive contribution to the concerns of sub-national territories in terms of water quality, soil preservation and regeneration, but also in terms of renewing public health approaches in terms of preventing the risks of diabetes, cardiovascular accidents, reducing sick leave or incapacity to work.

The economic dynamics organised around the notion of use performance also favour the sustainability of goods and/or the reduction of consumption of material resources.

The dominant model based on the sale of the individual ownership of goods and not on the relevance of their use, and supported by vertical forms of work organisation, arranged in silos, leads on the one hand to an under-utilisation of certain material goods, and on the other hand to the implementation of strategies of programmed obsolescence in order to renew their purchase.

On the other hand, the dynamics of the economy of functionality and cooperation invite us to pool material resources, especially those that are not renewable, to limit their use and to encourage their recycling in order to reduce their ecological footprint. How can this be done? By building an agreement with the beneficiaries on the expected performance of use and by agreeing on the monetary value linked to this performance of use.

Moving from the sale of the good to the sale of a performance of use can result in the search for the reduction of the obsolescence of the good itself! For example, one can imagine moving from the sale of a compressed air power plant (sale of a capital good) to the sale of the use of the plant. In the sale of the use, the industrialist remains the owner of the power plant. The remuneration is then based on the quantity of compressed air used. This transfer of the object of the transaction leads to a first effect in terms of durability: the owner of the compressed air power plant has an interest in making available to his client a robust, easy to maintain and durable asset. On this basis, it is then possible to move on to an offer for optimising the use of compressed air and recovering the heat generated. In this case, we are in a logic of performance of use, which focuses on the useful effects of the service. At this level, the supplier and his customer have a convergent interest in reducing the use of resources, while increasing the service value of the offer. Here, for example, the contract may stipulate that the gain generated by optimising consumption is shared between the two parties.

This shift represents a lever for developing, in a service-oriented manner, circular approaches to the treatment of material goods, from design to recycling and use. This approach notably favours the remote ownership of individual goods, and encourages the mutualisation of their use, the removal of programmed obsolescence logics (the good becomes a support for performance, which creates a joint interest of the company and the beneficiary to reduce the costs of use), and the possibility of undertaking life cycle analysis (LCA) procedures.

Evolution of work and development of immaterial resources

The dynamics of the economy of functionality and cooperation invite actors to broaden their vision of performance and to engage in cooperation with others in order to achieve a new ambition together.

If the convergence of interests sought by the actors implies complementary effects of each one’s activities, it also requires a displacement of the actors and in particular of their work in order to take into account the constraints of the other actors of the cooperative ecosystem. This sometimes profoundly modifies their organisation and management methods. The strategic resources to steer the emergence and development of this new service-type economic model are the immaterial resources1 ; that is to say, the capacity to develop confidence, to rely on skills, to design relevant organisations, to encourage commitment to work (health effect). The development of these resources requires, in particular, intangible investments such as feedback mechanisms for service innovation or professionalisation, mechanisms for evaluating the value created, such as cooperation, intangible research and development mechanisms, etc., etc.

Towards the notion of territorialized ecosystem

The interest in pooling material and immaterial investments, the need to cooperate in order to keep together a performance of use, the search for taking charge of externalities lead to an organization in the form of a territorialized cooperative ecosystem.

The territorialized cooperative ecosystem

Borrowed from ecology, the term « ecosystem » refers, in economics, to a group of actors acting in a convergence of interests, in the service of a project with economic, social, societal and environmental aims. Ecosystem stakeholders develop a community structured by interactions based on reciprocal commitments, exchanges of information and knowledge, and the pooling of material and immaterial resources that enable the development and sustainability of the project. Unlike the value chain, which organises an economic process based on the sequencing of actors linked by the coordination of links in pairs, and where the monetary value is mainly captured by one of them, in the ecosystem, the creation of value is linked to the capacity to maintain performance in a synchronous manner; the monetary value created being shared on the basis of commitments and their realisation. The monetary value created is shared on the basis of commitments and their fulfilment. The distribution of the monetary value created takes into account the long-term objective of strengthening individual and collective resources. The value chain is represented in a linear and sequential way, whereas the cooperative ecosystem is often represented by a set of interlinked actors, organised around an integrator, who can act as a Guarantor of the cooperation.

Ultimately, it is a question of successfully organising the management of a sustainable development issue through the implementation of a relevant solution on the scale of specific territorial perimeters. In the long term, it is a question of ensuring the sustainability of the actors involved and their cooperation.

Parts 5 and 6 will describe this time the territorial approach of the KBE reference framework.

5. Articulating (micro) economic model and sustainable territorial development model through territorialized cooperative ecosystems

Once the limits have been identified, the issues at stake, the economic model described, the question arises of the modalities of action allowing the emergence, the consolidation of cooperative territorialized ecosystems. If the second part of the document has exposed how to create a favourable breeding ground for the emergence of such ecosystems, it is now a question, in a more methodological perspective, of specifying the stages of a voluntary approach to take charge of a sustainable development issue at the scale of a territory.

5.1. First step: begin to qualify the sustainable development issues of the territory and identify the actors ready to commit themselves collectively in the construction of a response to an issue.

The first step is to understand the challenges facing the territory in their multiple dimensions. These dimensions generally do not coincide with the « silo » organisation of organisations but are apprehended in a new perimeter, the functional sphere. For example, the sphere of sustainable mobility, food wellbeing, waste prevention, energy transition, housing, etc., are not generally considered to be the same as the « silo » organisation of organisations. This process generally makes it possible to identify an initial set of actors from different sectors of activity who are ready to make a collective commitment to an issue.

5.2. Second stage: think collectively about how to deal with the issue by focusing on uses, lifestyles and ways of organising work, and to identify the outlines of an integrated solution.

Once a sphere of issues has been chosen, the second stage consists of sharing the experience of public, private, associative and semi-public players. How to explain the current situation? What are the current uses in the territory? What are the needs? What are the limits to everyone’s action? Can we be more relevant together? Under what conditions? In particular, stakeholders are invited to question the use value of goods and the useful effects of services. How does access to a good (a private car) or a service (home help) create value for the beneficiary? And how does the mode of production as well as the use of the good or access to the service also generate indirect unintended effects on third actors, so-called externalities, positive or negative effects? For example, the use of a personal vehicle can contribute to traffic congestion at certain times of the day. Access to home-based care generates value not only for the beneficiary but also for his/her family, for health care providers. Focusing the analysis on the conditions of use and the value of the service enables us to review the relevance of the services on offer, to move away from standardisation and to take into account specific dimensions linked to personal situations and the specific nature of the area, particularly by taking into account the effects of externalities. This shift in perspective makes it possible to imagine a different relationship to the goods and services made available. The analysis of the issues related to the sphere of mobility in a rural area may reveal a handicap in accessing employment for people without a vehicle/personal means of transport. One of the dimensions of expected use performance can therefore be access to employment. Depending on the territory, its organisation, the type of housing and the place of employment, the components of the integrated solution may consist of setting up a car-sharing service by associating employers / employment centres, reinforcing public transport lines, setting up a public transport on demand service, providing support when passing the driving licence by associating a car rental at a social rate, and making 2-wheelers available. Each time, the implementation of the solution will require the mobilisation and cooperation of a set of public (e.g. employment services) and private (employers) actors, including inhabitants (e.g. car sharing).

From these exchanges one understanding at a time emerges:

  • of the conditions to be met in order to maintain a performance of use;

  • of the different components of the solution to be integrated in order to achieve this usage performance;

  • the cooperation issues that make it possible to go beyond the limits of each person’s own action.

This work also makes it possible to question the effects of externality and to identify complementary actors to be involved in the reflection. The general outlines of a cooperative ecosystem are set out.

5.3. Third stage: supporting the emergence of territorial cooperative ecosystems; Towards the stabilisation of a new development model.

Supporting the emergence of cooperative ecosystems largely consists in accompanying the actors to work together in renewed forms. The emergence and stabilization of a new economic model to meet the challenges of sustainable development requires concern and reinforcement of the real work, the quality of cooperation and the recognition of the commitment of the different actors structuring the ecosystem; the relevance of the conditions of valuation and monetary distribution associated with the activity and induced by the solution; the coherence of the legal framework and the modalities of governance of the cooperative ecosystem; finally, self-confidence, trust in others and the pleasure of engaging in a meaningful collective approach what some call collective resilience. The territory is a resource to encourage these movements. The following points illustrate some of the shifts to be worked on in order to create a new dynamic of value creation.

Real work: piloting through the development of intangible resources and recognition of the real work of the actors

Producing and proposing an offer in a service-oriented perspective requires attention to the development of intangible resources linked to work, strategic resources for engaging in a « performance of use » orientation. Thus, employees’ skills, knowledge, capacity for commitment and creativity, trust, the relevance of the organisation, the quality of the relationship with beneficiaries are at the heart of the capacity to produce service value. Strengthening the cooperative ecosystem requires intangible investments - training, evaluation, social dialogue, feedback, etc. - which are essential for the development of the cooperative ecosystem. The strengthening of the cooperative ecosystem requires intangible investments - training, evaluation, social dialogue, feedback, etc. - which are intended both to develop these resources and to recognise the commitment of each individual.

The territory is a fulcrum for promoting the development of intangible resources and recognising the commitment of each person: belonging to the same territory can thus be favourable to the development of trust between actors, promote the relevance of a solution with regard to a specific situation, allow the development of a set of shared competences. In addition, the territory can encourage the pooling of intangible investments: sharing the cost of a study, an experiment, an evaluation, pooling training, organising feedback. In return, a common culture and capacity for action is gradually created, as well as a collective intangible heritage. Shared knowledge, jointly conducted and evaluated experiences are examples of collective intangible heritage.

The new approach also involves revisiting the work and relationships with the beneficiaries of the offers. This will pass:

  • on the one hand, by moving away from a single evaluation centred on quantified indicators (= measurement), which hardly reflect the value of the service, towards a set of shared evaluation elements. For example: assessing the useful effects of an integrated « food wellbeing » solution requires access to people’s stories at least as much as to measurable indicators,

  • on the other hand, by paying particular attention to the quality of the cooperation, i.e. the ability of each party to take account of the other’s constraints in the work they carry out with/for the other. This implies, in particular, considering the beneficiaries as a stakeholder in the performance of use (acting with and not on people).

Financial sustainability: managing through the complementary nature of the monetary and non-monetary dimensions of the commitment.

To be sustainable, the project must be able to stabilise in the medium/long term a vision of its financial dimension both in terms of investments and regular income. It is therefore necessary to collect non-monetary and monetary contributions, well beyond any public funds that may be allocated to it.

For its financial sustainability, the cooperative ecosystem needs a medium/long term vision. From this point of view, monetary and non-monetary agreements must be built on the basis of medium-long term commitments and put at a distance the sale of means (goods, service time) which induces a logic of volume and short term.

For the different types of beneficiaries, the commitment must take the form of a non-monetary contribution to the activity (what they are going to do within the framework of the co-production of the integrated solution; what they are ready to do), and an « acceptable monetary expenditure » in the form of a forecast of the « performance of use » co-constructed with the actors engaging in a remunerated activity.

Faced with this double challenge, the actors of the cooperative ecosystem must first of all question the useful effects of their action, with the aim of jointly evaluating both the value created and the quality of the cooperation that has made it possible to maintain the use performance. The aim is to shift the monetary conventions from a price logic based on a quality « standard » which ultimately refers to a ratio of costs (means incurred) to an acceptable expenditure, evolving over time, which is the expression of a value of different dimensions (the multifunctionality of the integrated solution).

Many local authorities want to promote « living together » on their territory. But when they welcome developers or lessors, they organise the relationship around the transfer of building rights, which in no way guarantees the quality of local relations! Thinking of an integrated solution in the sphere of housing that takes into account the dimension of « living together » implies articulating the design of buildings/public spaces with the type of uses imagined, then supporting the occupants in a use of the premises considered desirable and desirable, encouraging forms of exchange, sharing, and the development of various activities and services. In return, how do good neighbourly relations have an impact on the maintenance of the premises and spaces? On a stronger capacity for involvement of the population in the management of local issues? These elements of evaluation are essential to imagine a commitment and contributions from the various actors in the implementation of the solution. It is a question of no longer allowing oneself to be locked into an approach dominated by a cost that must be reduced, but of being open to an expenditure that creates a dynamic of value creation of different kinds at different levels, intended for different types of actors.

To face this double challenge, ecosystem stakeholders must also explore the induced effects of the activity on society, including unintended effects (externalities), and the territorial stakeholders concerned by its effects. It is a question of envisaging cooperation-contribution mechanisms between the actors who benefit from positive effects and those who bear the investments.

For example, a farmer who switches from conventional to organic farming removes a negative impact on the water tables. The water agency thus benefits from a positive externality. This externality can be integrated into the new income model through a contribution that can take the form, for example, of assistance with retraining.

Legal and governance coherence: steering through the convergence of interests

Today, the law, the legal tools and the forms of contractualisation ensure that the individual interest of each of the players, each of the stakeholders, takes precedence over the collective, common interest. Moreover, the contractual form is very often bipartite, fixed or not very evolutionary and defensive. It is essential to imagine another approach to these issues.

For example, with regard to the legal dimension: some public policies are implemented by private actors, through public contracts or public service delegation: the development of a square, water management, production/distribution of meals for schools, childcare facilities, etc. The legal dimension of the contract is often a question of the legality of the contract. The legal form (private law company) and the structure of the capital mean that some of these players are ultimately steered on the basis of the definition of a rate of return expected by the shareholders.

Under these conditions, public actors, like the beneficiaries of services, question the possible convergence of interests. This leads to a relationship of mistrust that severely limits the capacity for cooperation between actors. It is therefore necessary to think of a form of relationship between public and private actors and inhabitants at the scale of the cooperative ecosystem that is a support point for cooperation.

The SCIC, Société Coopérative d’Intérêt Collectif, a legal form that appeared at the beginning of the 2000s, is a legal form that is increasingly used for projects with a social/local utility2. It allows a diversity of actors (public, private, employees, beneficiaries) to be associated in the same governance, and allows a public actor associated with the capital to be able to request services without going through the framework of public contracts.

For example, with regard to the contractual relationship, the purchase of a good or service is generally accompanied by a definition of the commitments and responsibilities of each of the parties. It is a question of being able to attribute a possible failure to an actor. However, any service is in reality a co-production with the beneficiary.

Thus, a « good » haircut is at least as much the result of technical know-how as of the hairdresser’s ability to dialogue with his client in order to understand what is at stake through it: image effect, enhancement, distinction, belonging to a social group, etc.

The notion of performance in use reinforces this co-production dimension, by associating it with that of cooperation. Performance, like non-performance, cannot therefore be associated with only one of the parties. It is therefore necessary to imagine a contractual framework that recognises this cooperation issue and invites the construction of a shared understanding of the conditions under which use performance is held. For example, the success of a waste prevention policy depends on the ability to cooperate with the inhabitants or the economic actors producing waste. The prevention stakeholder, whether public or private, has of course a part in the success - or otherwise - of the use performance, but under no circumstances can he be held accountable for the result alone. Thus, building a new economic model that takes into account sustainable development issues at the territorial level implies innovating in favour of forms adapted to the convergence of interests.

Collective and imaginary resilience of the desirable: regaining collective self-confidence in order to project oneself into a desirable way of life and way of working.

As explained above, the economic models of enterprises are linked to household consumption patterns on the one hand, and to production patterns induced by organisations on the other. Changing the economic models of enterprises as well as the development model of territories requires changes in lifestyles and work organisations. The latter must become desirable.

The evolution of the economic model in a perspective favourable to taking on the challenges of sustainable development will therefore partly involve the construction of a new imaginary, an understanding of the challenges facing society and the forms of response that can be provided, individually and collectively. By way of illustration, we have previously indicated that a service is a co-production and that it therefore implies the cooperation of the beneficiary. This approach is out of step with the discourse on « the customer as king » which induces often problematic behaviours in the relationship with the providers of goods and services.

The ability to imagine a new future that is not the extension of the present requires creative efforts and a prolonged commitment from all parties. However, without a mechanism for recognising commitments, the efforts in commitment that work implies, as well as efforts in commitment within civil society, cannot be sustained.

From a sustainable development perspective, each territory can be the bearer of values, a collective imagination and experiences, and practices that are as many points of support, or sometimes brakes, on changes in lifestyles - and therefore in consumption patterns and forms. It is essential, as we shall see shortly afterwards, to integrate this dimension into action.

6. Animating a public space to move towards the constitution of innovative territorialised functional environments.

Bringing out a new model of sustainable economic development of territories implies:-Leaving « silo » action;

  • Not limiting ourselves to the evaluation of results, especially their measurable dimension;

  • Overcoming the opposition of interests between public, semi-public and private actors;

  • To move away from steering by costs;

  • To take into account the reality of the work.

Engaging in a new dynamic requires the creation and management of a set of mechanisms that will gradually create an innovative environment for the promotion and implementation of a new economic model associated with sustainable development. One of these strategic mechanisms is the facilitation of public debate, both in close contact with local elected officials, local businesses, whatever their status, and more broadly with the population. Leading the public debate means at the same time sharing an understanding of the challenges of sustainable development, crossing imaginations on the future of the territory, on desirable futures, bringing together different categories of actors (entrepreneurs, inhabitants, public actors, researchers in human and social sciences, consultants) and encouraging dynamics of innovation, cooperation, sharing feedback. Indeed, changing the model means above all changing the imaginary, the cultural reference system, and not only building a new and more relevant form of organisation.

Resources on which to draw to drive new sustainable development trajectories

The prospective study commissioned by ADEME and carried out by ATEMIS Towards an economy of functionality with high environmental and social value in 2050.

The work includes in particular a set of visions describing the different dimensions of a successful model of the economy of functionality deployed at the scale of companies and territories. First trajectories are presented and analysed; The different variables that make up the prospective system are described and studied; The issues conditioning the development of the economy of functionality model are presented.

The experience of a first territorial support system based on the reference frame of the economy of cooperation and functionality.

Between the end of 2015 and the beginning of 2017, the CERDD has initiated a first support system for three intermunicipal authorities in Nord-Pas de Calais, by mobilising the reference system of the economy of functionality and cooperation. The support provided may be similar to the first two phases presented above: collective work on a single issue - food for the urban community of Dunkirk, the reduction / recovery of fermentable waste for the Porte du Hainaut urban community, and the thermal renovation of housing for the Sud-Artois community of municipalities.

The support has notably provided the impetus for a reflection on how to deal with the issue by focusing on the uses and conditions to be met to obtain a high level of performance in use. The support led to the definition of an integrated solution and the implementation of the first cooperative ventures. The insert at the end of the document succinctly develops the example of Sud Artois.

First exchanges of experience between pilot cities of the transition

On the basis of an initial evaluation of the experience of Loos-en-Gohelle, four « pilot transition » cities have committed themselves to sharing their experience. During the second half of 2018, they are seeking to establish a common reference system that is able to include the economic dimension of the sustainable development of the territories in transition.

This initiative, which takes the form of a workshop, is intended to be extended to other territories, including rural territories, including territories where the driving actors come from civil society. The articulation of a desirable ecological and societal transition to an economic transition via the economy of functionality and cooperation is posed. Its lessons can constitute an important lever in the emergence of innovative territorialised functional innovative environments.

The construction of responses by territories to the challenges of waste prevention, energy transition, etc. with the support of ADEME.

ADEME is already supporting and co-piloting a set of schemes to address energy and environmental issues (TEPOS, ZDZG territories). These mechanisms highlight the need to build a response that brings together a diversity of actors in a cooperative approach. Collective diagnostics are implemented and action plans are drawn up to build a common understanding of the issues and develop capacities for action. Actors play the role of facilitator, integrator and sometimes coordinator of cooperation. Inhabitants, businesses and public actors learn / strengthen their capacities to work together.

The repository of the economy of functionality and cooperation can be used to share an inventory of the steps taken. For example by questioning the dynamics of cooperation, the conditions and effects of cooperation; or the intangible resources mobilised and their development. Also the way in which the projects integrate / bring answers to external effects, or to the devices of revelation / valorization of the created value.

Perhaps, on this occasion, an interest will emerge to further appropriate the referential of the economy of functionality and cooperation, as a point of support to continue to move forward.

The support of territorial projects for the economy of functionality

ADEME intends to support multi-actor territorial projects based on the reference framework of the economics of functionality and cooperation and the approach presented in this document. These projects will make it possible to explore how a new economic model can be a path to sustainable development of territories, on a range of themes, food, housing, waste prevention, etc.

From now on, ADEME and ATEMIS intend to further formalise a methodology for supporting territories in order to provide an answer to the identified challenge: to think and implement a link between a (micro) economic model and a model of territorial development oriented towards the management of environmental and social issues.

At the initiative of the CERDD, the community of municipalities of the South Artois was supported by ATEMIS and E2I to revisit its territorial challenges by mobilizing the reference frame of the economy of functionality and cooperation. The subject of energy renovation of housing was chosen. The intermunicipal services, elected officials, local craftsmen, departmental social services in charge of energy insecurity and the actors in charge of public policies for housing renovation were involved in the discussions. Invited but absent from this stage: banks and insurance companies. The discussions made it possible to point out the limits to the action of each party, limits which explain the low number of effective renovations in the area, and to identify the different components of the integrated solution to be developed. Namely: identifying the housing units concerned, helping owners to understand the issues at stake, carrying out a thermal diagnosis as well as a definition of the dimensions of comfort expected, producing specifications of the expectations linked to the renovation (target performance, types of work to be carried out), helping with the administrative and budgetary arrangements for the renovation, consulting craftsmen, encouraging work in groups of craftsmen, supporting new uses once the housing has been renovated. The collective work lasted one year. It revealed to each of the actors present that resources existed in their environment that they were not aware of. Cooperation issues were brought to light. For example, the fact that the modalities of mobilisation/distribution of public aid have an impact (positively or negatively) on the work of the craftsmen. It also revealed the importance of intangible resources (skills linked to experience, confidence in the proposals of the craftsmen) and the way in which the territory could be used as a support point to develop these resources (e.g.: support for local craftsmen in setting up groups, creation of a trust commission playing the role of a trusted third party between the populations and the craftsmen). First actions were carried out together, including a home renovation fair which notably enabled the inhabitants to engage in dialogue with local craftsmen. A first set of thermal diagnostics were financed, in order to gain experience on the transition from diagnosis to the owner’s decision to actually engage in thermal renovation. This work puts into perspective an evolution of the economic model of the craftsmen: going beyond the competition between trades/craftsmen to work together on performance commitments in the service of customers; going beyond the competition in terms of prices through the creation of a trust commission that recognises the relevance of the technical proposal as well as the means requested; the possibility of pooling material and immaterial investments through the creation of groups and the valorisation by the community of the craftsmen of the area involved. In all these dimensions, the territorial anchoring of the approach plays a preponderant role.

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