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The role of public sector intervention in product development within SMEs – managing the sustainability message Presenter: Simon O’Rafferty Paper by: Simon O’Rafferty and Dr Frank O’Connor GIN 2006, Cardiff. agenda. Design Wales context (why ecodesign is important to us)

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  1. The role of public sector intervention in product development within SMEs – managing the sustainability message • Presenter: • Simon O’Rafferty • Paper by: • Simon O’Rafferty and Dr Frank O’Connor • GIN 2006, Cardiff

  2. agenda • Design Wales • context (why ecodesign is important to us) • ecodesign/product development in SMEs • role of innovation • welsh context - case-example • going forward • conclusions

  3. Design Wales • 100% funded by the Welsh Assembly Government • located at the National Centre for Product Design and Development Research (PDR), Cardiff • free and independent design advice (since 1994) advise on all aspects of design (mainly SMEs and micro-SMEs) • incl. branding, product, packaging • promote design in Wales • incl. newsletter, events, publications, competitions, www site • strategic advice to the WAG • design policy • IWDS • ecodesign initiative

  4. context • "Sustainable Development is not an option that will go away – it is the only way forward" • Rhodri Morgan AM, First Minister for Wales • “Fundamental changes in consumption and production patterns are needed” • World Summit on Sustainable Development (WSSD) • “better ecodesign is crucial if we are to force the pace of improvements in product performance and stimulate real step changes.” • UK Sustainable Development Strategy, March 2005

  5. context • evolving product/environment policy landscape • WSSD 2002 (UN) • 10 year framework programme on SCP • EU Sustainable Development (SD) Strategy • Integrated Product Policy – EuP, WEEE, RoHS • UK SD strategy • Wales SD Action Plan • Business and Environment Action Plan • International producer responsibility legislation (Japan/China/US) • 80% of environmental impacts locked in at the design stage

  6. context • business case • Many leading edge multi-nationals and a small number of forward-looking SMEs are implementing ecodesign • emerging drivers • investors/shareholders, i.e. company CSR ratings, risk • competitors (global market), i.e. Europe, Japan, US, China • customers, i.e. b2b • Standards - ISO/TR 14062:2002 • Sustainability Management Guidelines- BS 8900: Electronics Industry Code of Conduct (EICC) – • NGOs, i.e. CAFOD, Christian Aid

  7. SMEs / SD • SMEs play a significant role in the design and development of new products • they can make a contributing to sustainable development • in Europe • 99% of all European enterprises (26 mil. enterprises - accounting for 75 million jobs) - 91% are micro-SMEs (1-9 employees) • 10% of all enterprises (2.5million enterprises) are in manufacturing - all manufacturing sub-sectors • 80% of employment in some industrial sectors • 50% of overall pollution (Ecotec, 2000)

  8. SMEs • ecodesign implementation and life-cycle thinking in SMEs still remains low • fragmented product development process • managerial and operational resources • commonly, a lack of internal design capability • failure to harness the strategic considerations • UK SME managers are more sceptical of tools and methodologies • ecodesign is a systematic and strategic process • design process remains the same but it requires new information (the sustainability message) • policy framework is currently oriented towards larger firms

  9. interventions • there have been many previous public sector initiatives and interventions • many failed to enable ecodesign implementation in SMEs in the long-term • much emphasis has been placed on company specific issues, including • managerial systems • operational resources • supply-chain issues • less attention has been placed on the broader role of national innovation systems and other forms of intervention

  10. innovation • the role of innovation • no “one-size-fits-all” innovation model • cross-functional, multi-skilled teams • financial and non-financial incentives • consultation and collaboration with customers, competitors and researchers • many SMEs regularly interact with a number of external stakeholders when developing products • the public sector has a role to play in facilitating and formalising this process – “touch points”

  11. innovation • national innovation systems • includes ALL the important factors that influence the development, diffusion and use of innovations as well as the relations between these factors

  12. welsh context • existing support for innovation • mechanisms for stimulating innovation and fast-growing company incubation • extensive network of Business & Environment (B&E) support - high degree of regional penetration • emphasis on production/manufacturing and ‘end-of-pipe’ solutions • design (including ecodesign), manufacturing and general business support services • centres of excellence (facilitating sectoral clustering) • funding programmes • amalgamation of the existing portfolio of funding • proposed single innovation and R&D grant scheme • “Knowledge Bank for Business” - high-growth potential

  13. life-cycle thinking - IS • Is there an innovation system in Wales? • coherence? unified function? bounded?

  14. case example • Welsh micro-SME - Riochem™ Riochem TinyLab™award winning ecodesign exemplar

  15. case example • the TinyLab™ is a novel and innovative product for chemical titration on-site analysis • Design Wales have been providing support to Riochem™ since mid-2002 • project planning • design brief, specification • sourcing and managing appropriate design expertise • product design and development • materials and manufacturing • life cycle strategies, i.e. design for reuse, eco-services etc. • reliability and compliance, i.e. CE, WEEE, etc • naming, branding, marketing and web design • the product was launched in October 2004 winning two awards for design and innovation

  16. case example multi-stakeholder Life Cycle Team Riochem TinyLab™designed for disassembly, recycling and eco-services

  17. going forward • it is possible for SMEs to implement ecodesign and harness the strategic considerations of sustainability with the right interventions • managing the sustainability message • set-out clear vision • recognise multiple leverage and touch points in IS • demonstrate “best-practice” – tailored support • “simplified yet not simplistic” tools • engage with industry and design community • understand needs and priorities • focus on supply and demand side activities • embed ecodesign/sustainability in…… • mainstream design and business education, government strategies and the wider B&E support network

  18. conclusions • policy / business case is very strong • SMEs are crucial to SD • integrated approach to stimulating innovation for SD is required • need to formalise multi-stakeholder life-cycle approach

  19. Thank you • sorafferty@designwales.org.uk • ecodesign@designwales.org.uk

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