EUROPEAN PAPERS ON THE NEW WELFARE

Chapter 4: In the World of Research

6. A New Philosophy of Productivity
All these studies and research projects always fascinated me, both for their content and as indicators of economic and social evolution.
Until the end of the seventies technological progress had followed a linear development. It was making every system quicker, bigger and more effective. It was the rush to the economy of scale.
We witnessed the passing from a 200 seat plane to a 500 seat one (the Boeing 747) and a 1000 seat plane (the Galaxy) was considered. In chemistry tanks or reactors capable of containing or producing 3000 and even 5000 metric tons a day instead of 1000 were contemplated for the large intermediate products such as ethylene.
I remember as technical and economic study for the development of a machine capable on its own of producing 500,000 blankets a year, provided that they were all equal of course. Each blanket would have cost the consumer less than a kilo of apples. However it was a case of a totally false gain. The production machine itself required little space, 200 square metres would have been sufficient. However an enormous space would have been needed to store the raw material and a still larger one to stack the blankets. The distribution costs of this product became enormous: to dispose of all those blankets it would have been necessary to sell them at least throughout the whole globe. While the production costs might have been laughable, those for the services (warehousing and distribution) represented over 90%. The same type of problem had already appeared with the 500 seat aeroplane: the cost per passenger in flight certainly went down but the cost of his getting into the plane, baggage handling and all the other service functions increased more than proportionately within the overall costs.
In 1970, we carried out the first very detailed and in depth study in Europe on nonwoven fabric which gave a good indication of the passage towards a new philosophy of productiv­ity. At that time, several chemical companies dreamed of finding a new product, like nylon in 1938, or later the polyester or acrylic fibres, or again polypropylene which in the years of their launch brought about great upward spikes in sales and profits. This evolution had slowed down and belief in the possibility of inventing a fibre that could replace cotton or wool had also receded somewhat. The development of fibres based on carbon polymolecules was also significant: they stood up to over 500 degrees of heat. Very useful for resisting the temperatures at the nose cones of aeroplanes that flew at supersonic speeds, but of little use for making underwear or personal clothing out of them. By this time mixed synthetic fibres in particular were multiplying, in the search to eliminate some defects such as static electricity, found in nylon which produced a clearly audible crackling when there was friction against fabrics of that material. With time good solutions were found, including in the colouring and printing of fibres and of plastic materials which were still an important problem in the sixties. When naturally elastic fibres were developed, the increasingly specialised and globalised market offered few opportunities to more than one or two world producers to realise gains on their investments.
At a time when the term “ecology” was completely unknown except in some branches of biology, there was still a tendency to openly seek systems for reducing the life span of products that had the advantage – it was said – of eliminating costs and repair and maintenance problems and in the case of textiles eliminating those of washing and cleaning. So the “use-and-throw” watch, suit and underwear were examined.
Nonwoven fabrics were nothing new; felt had already been produced at the time of the Roman Empire and even earlier. It was a case of seeing what could be obtained using paper making techniques, utilising textile fibres of all kinds with the addition of a consistent quantity of glue. The basic idea was to utilise much longer fibres than those used to make paper, for example cotton, wool and synthetic fibres in order to eliminate the fibre making procedure and obtain fabrics, or better, finished textile products. And so “use-and-throw” underpants and underclothes began to appear in the shops. There are still some products around from that period, such as certain kinds of cleaning cloths including those for cleaning car windows or napkins and tablecloths some of which are practically made of paper. Traditional very low cost fabric products however still represent dangerous competition for the nonwoven fabrics. Even whole suits were made from nonwoven fabric but they were not successful.
The decisive case that put minds at rest and ended the hopes of assisting at a true revolution was that of the sheet. It was calculated that over its life span a sheet was washed at least fifty times before being thrown away. What a business coup if they had managed to persuade families to buy 50 use-and-throw sheets instead of one traditional sheet at a much lower price per unit! It soon became clear, however that while on the one hand the family could rid itself of the mundane task of washing there would have to be an extra room in every apartment for storing the sheets to replace the used ones. And maybe even a machine to compact them and incinerate them after use. All this just became absurd and demonstrated the limits to a certain kind of extrapolating the logic relating to production and maintenance. These sheets found a market only in specialised areas, for example in hospital operating theatres where there was the risk of contamination.
7. The New Service Economy
This kind of example, apparently insignificant, is in fact emblematic of a period during which the reduction in production costs of any object had to take into account the relevant growing costs in the utilisation phase. Moreover, ecological sensitivity and some simple problems relating to waste management at every level, from domestic to industrial waste, weighed more heavily on the balance sheet relating to economic costs after use. Furthermore, in this last case the weight of some of the negative consequences of technological progress began to be felt. It was a benefit and it was useful to have products such as plastic materials that offered improved resistance, but this quality became a defect when it came to the waste disposal phase.
In economic analysis terms, when these problems spread, from the first half of the sixties, it was no longer possible to speak of living in the Industrial Revolution age, but rather in that of an economy based on service activities. The New Service Economy had been born. If one adds the investment in research, in marketing, in safety and in training – all service activities – to the cost of the use and of waste disposal it can be seen that in every sector of business, for every “production” activity, three quarters of the average expenses (whether it is a car, a suit, a bottle of drink or a computer) are determined by service functions and a quarter (often much less) by the production of the material object.
It is not only in the case of use-and-throw products that an important change of direction occurred at that time, even though since then the life span of a certain number of products has continued to be reduced as part of a sales strategy. It has become clear that there has been a great change in the whole energy sector. At a time when the dangers of nuclear energy were just starting to be spoken of, it was thought that the new atomic power stations could be absolutely safe and at the same time produce energy at a good price. I spent two weeks in a Battelle Centre in Seattle, in the United States, on a programme of what today is called contin­uing education, together with other researchers from the Foundation. Not far from there, there were General Electric’s old laboratories, those specialising in the sector dealing with surregenerator nuclear reactors that had been studied by Battelle. In this context I began to discuss and carry out projects on the consequences of a significant drop in the price of energy. The idea was to transform a good number of chemical processes into thermal process­­es. The Seattle experts were not very optimistic and in any case, two years later the terms of the debate on energy, and on nuclear energy in particular, would be radically changed. An awareness was growing concerning the problem of vulnerability and the cost of managing the waste that had subsequently given rise to an in-depth debate which continues today.
All these experiences had, in 1973, opened me to the idea of a new change of job which was fairly radical, even though after my Battelle experience I remained essentially a professional researcher and manager. For seven years I had done hard but rewarding work. I had worked and often put forward proposals, sold, presented and carried out projects all of which were meaningful, even those that had had negative results. And all this for 110 companies in 19 countries on 4 continents.


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