PRODUCTIVITY AND THE CIRCULAR ECONOMY AN AWARD-WINNING

Interview with Camilo Fernández de Soto

Translated by Juan Sebastian Suarez Castañeda

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Profile

Former Lawyer majoring in economics from the University of the Andes, with a Masters in public administration from New York University. He has experience in promoting the commercial integration of countries, fostering the growth and internationalization of enterprises in the region, and promoting domestic productivity growth of enterprises. As president of Colombia productiva, he has focused on designing and implementing strategies to increase the productivity of Colombian companies. He has expertise in the development of export promotion and investment attraction programs in Latin America and the Caribbean, which has enabled it to learn about the barriers and challenges affecting the production and competitiveness of industries, in particular small and medium-sized enterprises (SMEs), to understand the local and international market requirements. Before assuming the presidency of Colombia productiva, he was associated with the Inter-American Development Bank (IDB) as a specialist in Integration and Trade, and as co-leader of the Business Dialogue of the Americas, an initiative of the IDB that, in coordination with the private sector, works with the governments of Latin America and the Caribbean to build a public-private agenda that drives economic development.

The circular economy is increasingly taking center stage to improve the productivity and competitiveness of enterprises, both nationally and internationally. "A productive enterprise is more cost-efficient, generates employment, offers higher quality products at more competitive prices, and produces more profits. And with the presence of Covid-19, now more than ever, it is a great challenge for enterprises", said Camilo Fernández de Soto, president of Colombia Productiva to Noticreto.

Colombia Productiva is the productivity agency of the country, is an autonomous patrimony of the Ministerio de Comercio, Industria y Turismo (Mincomercio) and helps companies to produce more, with better quality and higher value-added, to enable them to compete and respond to the demands of global and local demand. Through its projects, it has a presence in 29 departments, since September 2018 it has supported more than 3,400 companies.

"We also have the mission of articulating the national and regional public and private sectors, to implement actions that overcome the bottlenecks that affect strategic industrial sectors, on issues such as productivity, quality, productive chains, and sophistication. Colombia Productiva supports companies through calls and programs that allow them to improve efficiency indicators in quality, human capital, and productivity.

The agency services include technical assistance for companies to implement international methodologies for productivity improvement, specialized capitalization programs in partnership with companies and educational institutions, more guidance and financing for obtaining certificates for entry into the international market", said the president of Colombia Productiva.

What is The Circular Economy for Colombia Productiva? How can it boost competitiveness?

"The principle of the circular economy is to optimize the use of resources, increase the useful life of products and at the end, recirculate materials, to avoid waste. In this way, companies mitigate their environmental impacts, optimize their costs, generate new revenues, and increase their profitability. For Colombia Productiva, the Circular Economy is an opportunity to reduce costs for companies, starting from the optimal management of raw materials and waste, which allows the value chain to be more efficient, effective, in consequence, more productive.

In 2019 we started to accompany companies and teach them how to implement the circular economy in their processes of raw material management and waste generation and to generate green businesses that allow finding new income.

On this experience, it is vital to highlight the importance of business synergies. In the 157 technical offices, we have set up, a company alone cannot apply a circular economy. On the other hand, in a collaborative context, cleaner production is empowered, business opportunities created where sustainable supply is promoting. Waste from one company becomes the raw material of the other, allowing companies to reduce their CO2 emissions, demand less water in their production processes, reduce energy consumption, incorporate usable raw materials and save costs".

What is the relationship between the circular economy and the building industry?

"The building industry is one of the sectors with the highest potential to implement the circular economy. According to data from tecnalia (2017) and the Ministry of the Environment and Sustainable Development (2019), of the approximately 22 million tons of construction and demolition waste (CDW) produced annually in Colombia, 9.1 million could be prevented and or reused. Currently, however, we only take advantage of 365,000. To increase this number proper practices in the production of inputs need to be applied by promoting cleaner production and waste reduction.

Likewise, when planning the building works, concepts of circular design and intelligent buildings should be implemented that allow constructions and operations environmentally friendly, consistent with the ecological, landscape, and urban context, in addition to being efficient in the materials consumption, water, and energy.

Finally, processes must be sustainable at the construction phase. In other words, efficiency in the consumption of resources and waste generation, and the supply chain must apply this principle in production and transport. The efficient use of resources and suitable planning of the supply chain avoids cost overruns and delays in work, which keeps project scope, timeline, and budget triangle balanced".

What does it take to make use of Construction waste How does Colombia Productiva coordinate different sectors?

"Further work is needed on the transfer of knowledge on cleaner production and sustainable construction. The lessons learned from international companies, the findings of academia, and the generation of business synergies should be applied.

The circular economy is a road to have more productive and competitive industries, and Colombia Productiva faces the challenge of making the companies involved in the culture because it not only implies cost savings and process optimization but because consumption trends are leading us to have more environmentally responsible industries.

After the pandemic, consumers and international markets will be more demanding in terms of quality, compliance with sanitary and phytosanitary standards, in the adoption of fair trade and production processes environmentally friendly. We had already identified these challenges, but now they will be a trend, and to face them we must prepare now".

How would Colombia Productiva consider the building sector to increase productiveness and strengthen value chains?

"If the construction sector increases its productivity, it will have significant impacts on the country. In the second half of 2019, Colombia, in conjunction with Price Waterhouse Cooper and with the actors of this industry, developed the road map for the sector in the Construction Industry with vision 2032 in which the circular economy will be fundamental. Research, such as that carried out by IDOM, concludes that 92% of the projects do not have enough information for their construction, that 90% end up with cost overruns of more than 10%, that 95% do not finish on time and that 37% of the materials end up discarded.

Our programs as Productivity Factories that are part of the 20 goals of the Plan Nacional de Desarrollo, help to improve these indicators in companies through advice on environmental sustainability, energy efficiency, commercial management, quality, logistics, labor productivity, operational productivity, and digital transformation".

How does the Productive Colombia Initiative in Circular Economy relate to Colombia COP21 goals?

"The environmental sustainability projects of Colombia Productiva are aligned with the purposes outlined in Colombia COP 21, El plan Nacional de Desarrollo, the Conpes 3866 of 2016 (Política de Desarrollo Productivo), the Conpes 3934 of 2018 (Política de Crecimiento Verde), La Eatrategia Colombiana de Desarrollo Bajo en Carbono.

To date, we have achieved that the companies we serve generate approximate savings in annual consumption of 3,378 Colombian households), reduce emissions of greenhouse gases corresponding to 2,043 tons of CO2 (Can capture in a year 1,000 hectares of forest), and achieve savings of up to 3% in production costs by optimizing your energy consumption".

How does the Productive Colombia Initiative in Circular Economy relate to the Colombia COP21 goal?

"Addressing and overcoming the economic and social emergency caused by Covid-19 is a great challenge for all. For Colombia Productiva, it has been a permanent challenge because we know that productivity will be the key to reactivation and the adaptation of companies to the new reality. All the services we offer to entrepreneurs seek to support them in overcoming the problems that are generating this pandemic within companies. For example, we support the Minister of Health in building the biosafety protocols that now govern and are mandatory for reactivation.

We draw up a comprehensive assistance strategy to adopt companies in compliance with these protocols: we create the "Línea de confianza: 0314767666" through which any entrepreneur or citizen can raise questions about the protocols with ICONTEC biosafety experts. In partnership with Bancoldex, we launched the Reactivate credit line, aimed at micro, small and medium-sized enterprises from all sectors that can use these resources for the expenses associated with the implementation of biosafety protocols, including inputs and adaptations to ensure the safety of employees. We also adjusted the nine lines in which Productivity Factories work to meet the productivity needs that companies have to adapt to the post-COVID era.

With resources from SENA we launched the call "SENAInnova, productividad para las empresas" to help them improve their processes, products, and services through the incorporation of new technologies. There is a $24 billion exchange to co-finance around 120 projects that increase business productivity and competitiveness. For SMEs, they will receive 90% co-financing, and 50% for large MSMEs. In both cases, they will benefit up to $200 million per project. In the specific case of the circular economy, we continue to advise companies technically so that their implementation allows them to have a clean production, a reduction of waste, and, therefore, an optimization".

A final message you want to send to the readers?

"After the coronavirus, we are going to see important social and economic transformations: businesses are going to have to evolve to adapt to the changes that are coming, I would highlight two challenges:

1. You have to bet on probability. It is possible through the circular economy. A productive company is efficient in the use of its resources, optimizes the consumption of energy, water, and raw material, has standards in its processes, meets quality standards, makes excellent management of its human capital, and can produce more, with better quality and added value.

2. A second challenge is the need to incorporate new technologies into our businesses. Companies must begin to make their digital transformation: what we saw a few months ago as a disadvantage to compete in the future, we are already seeing. Companies that today do not have built-in digital tools will have more impediments to compete.

These are the ingredients to be more competitive, not only to export but to do business in the Colombian market. A great lesson from this pandemic is how to make intelligent management of human resources in companies, prepare them for crises, and take advantage of their knowledge in decision-making and advance in business.

Finally, I would like to invite you to visit our website www.colombiaproductiva.com so that you can learn about our programs and, of course, download our Circular Economy Guide for Business free of charge".

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Translation in Spanish: Link