* Report: Blueprint 7: Value Cycles. From Value Chains and Circular Economies to System Value Cycles. by Bill Baue, Ralph Thurm et al. r3.0, September 2020

URL = https://www.r3-0.org/wp-content/uploads/2020/09/r3-0-Value-Cycles-Blueprint-Final.pdf?

Description

"Humanity is currently confronting a value crisis: in order to prop up a perpetual increase of financial value, we are degenerating the very social and ecological resources that undergird the intrinsic value of living.

Therefore, we must create a new system of value – one predicated on continually regenerating the social and ecological resources that are vital to the wellbeing of all living beings, in the spirit of interconnectedness.

This Value Cycles Blueprint makes a case for this radical reconceptualization of our system of value as System Value, which would displace the current regime of social and ecological value extraction to support financial value concentration, with an approach that dynamically balances the creation of value across all systems – ecological, social, and economic. And to make this System Value creation durably flourishing, we must shift from the linear and even circular notions of value creation, and instead embrace cyclical and spiral value creation structures, which mimic how natural living systems function."

In Chapter 2, the Blueprint traces an evolutionary trajectory from Shareholder Value to Shared Value to Valueism. It then pauses to consider the confounding question of Valuation to set the foundation for identifying the shortcomings of Impact Valuation – namely, that it considers impacts across diverse capital resources (natural, social, human, etc.) to be interchangeable, and it fails to account for the carrying capacity thresholds of these vital capitals resources.

To address these shortcomings, the Blueprint proposes the next developmental evolution to System Value, which inherently accounts for Intrinsic Value. This Chapter ends by asserting the need to shift to conceive of Economies as Ecosystems, which would enable the actualization of System Value in a Regenerative and Distributive Economy.

* Cycles

Building off the notion of value as a knowledge claim, the Blueprint illustrates the fundamental nature of cycles by appealing to the example of the knowledge life cycle, whereby knowledge is continually produced, assessed, enacted, re-assessed, and either validated for continuation in the cycle, or rejected from the cycle as unfit and/or undesirable.

Against this backdrop, the Blueprint traces the evolution of directionality in conceptions of value creation, from Value Chains to the Circular Economy, critiquing shortcomings of each of these doctrines. For example, a robust body of evidence demonstrates that Circularity does not inherently reconcile with Sustainability, and the Circular Economy stands in need of humanization (to complement its focus on biological and technological metabolism) through the Circular Humansphere.

The Circularity / Sustainability disjunction points to the need for Thermodynamic Accounting that reconciles recycling efforts with the fundamental laws of entropy and the conservation of energy. Applying a geophysical lens to the question of regeneration, the Blueprint then examines Bioregional Circulation as the appropriate scale of intervention. Finally, Chapter 3 ends by positing the Cyclical Economy as the next evolutionary development, predicated on the notion fractal proportionality whereby cyclical value flows are nested between linear and circular flows on the one hand, and spiral flows and the other, and represent the appropriate scope of focus for applying to the macro question of an economy.

* Value Cycles

Chapter Four pulls together the strands on Value from Chapter 2 and on Value in Chapter 3, culminating with a synthesis of the notion of System Value with the notion of Value Cycles to arrive at System Value Cycles as the pathway to a Regenerative & Distributive Economy, and ultimately to Thriveability.

The Chapter then applies the concepts advanced in the Value Cycles Blueprint to the preceding Blueprints in the r3.0 Work Ecosystem, to see how they interweave. Of particular note, the development process of the Value Cycles Blueprint prompted r3.0 to reassess the Strategy Continuum introduced in the first Blueprint (on Reporting), resulting in its redesign and reintroduction as the Maturation Matrix. In addition to covering the alignments with all previous Blueprints, this Chapter also assesses the overlap with other elements of the r3.0 Work Ecosystem, including the Rightholders concept, as well as r3.0’s commitment to Thresholds & Allocations and it advocacy for True Costing, Benefiting, Pricing, Compensating, and Taxing. The Blueprint ends with a set of broad Recommendations.

1. Introduction

1.1. What is value? 11
1.2. What are cycles? 16

2. Value

2.1. Shareholder Value 20
2.2. Shared Value 22
2.3. Valueism 24
2.4. Valuation 26
2.5. Impact Valuation 27
2.6. System Value 33
2.7. Intrinsic Value 35

3. Cycles

3.1. Value Chains 41
3.2. Circular Economy 44
3.3. Thermodynamic Accounting 57
3.4. Bioregional Circulation 61
3.5. Cyclical Economy 63

4. Value Cycles

4.1. Systems + Value + Cycles → Regeneration & Thriveability 67
4.2. Synthesizing System Value Cycles into the r3.0 Work Ecosystem 69
4.3. Baselining a Regenerative & Distributive Economic System 76

Excerpts

Recommendations

• Identify your Definition of “Value” • Acknowledge the Current Value Crisis, and Work for a New System of Value • Embrace and Apply the Sustainability Quotient • Advance a System of Value that Embraces System Value • Transcend Linear and Circular to Embrace Cyclical and Spiral Value • Integrate Value Scales through Fractal Nesting (or Panarchy) • Apply Thermodynamic Accounting • Encourage Bioregional Circulation • Spur the Emergence of a Cyclical Economy • Map Value Development Pathways Using the r3.0 Maturation Matrix • Apply the Integral Materiality Process to Determine Impact Relevance

From Value Chains and Circular Economies to System Value Cycles

Contents