The book 'The Performance Economy’ focuses on the role of entrepreneurs and other innovators and on how they change the dominating business models of the Industrial Economy towards those of the Performance Economy by:

• exploiting SCIENCE and knowledge as drivers to uncouple revenue and wealth creation from resource throughput by focusing on smart materials, smart goods and smart solutions.
• creating more JOBS locally by shifting the focus of optimization from the resource throughput of the industrial or ‘river economy’ to the asset management of the Lake Economy, that is, in-sourcing jobs instead of out-sourcing work.
• applying the business models of the Functional Service Economy with an extended PERFORMANCE RESPONSIBILITY of economic actors over the full life cycle of their products to increase wealth and welfare.

Furthermore, the Performance Economy:

• uncouples wealth creation from resource throughput. It is the most promising of new business models; its strategies have a long track record, illustrated by numerous examples that hopefully will serve as an inspiration to readers.
• is a resource-miser business model: the goods of today are the resources of tomorrow at yesterday’s prices, rather than an undesired waste, in the Performance Economy.
• defines new metrics to measure sustainable competitiveness, in the form of absolute decoupling indicators. They enable to document the changes with regard to the three key dimensions – economic, ecologic and social welfare – of the sustainability triangle

The Performance Economy was first written in 2005 and published in 2006. In 2009, a Chinese translation was published in Shanghai; the translation into simplified Mandarin had been done with great care under the leadership of Professor Zhu Dajian of Tongji University Shanghai.

The second edition of the Performance Economy, to be published in March 2010, has been thoroughly revised and reviewed to make reading easier and smoother. The new structure is:

1. producing performance,
2. selling and buying performance,
3. maintaining performance over time.

Unchanged from the first edition is the philosophy of learning from reality – what Hannah Arendt had called the vita activa, the reality as it develops.
The biggest progress in the real economy, of which this book is a mirror, has happened in the field of Chapter 2, selling and buying performance. In the past, the Performance Economy was driven by economic actors such as Xerox selling customer satisfaction, and fleet managers such as airlines and leasing companies, selling services. Within the last five years, the concept of buying performance has taken on a substantial volume. The US Administration now openly declares that their preferred procurement option is buying services instead of hardware. Even government buyers in high tech areas, such as NASA for space flights, openly declare that the Space Shuttle is the last piece of hardware that NASA will have owned and operated. This trend of buying services instead of hardware may become the biggest driver of the transition from an industrial to a Performance Economy (or functional service economy).

But the business model of selling performance is also increasingly spreading through industrialized countries. Among the latest examples are turbine manufacturers, such as Rolls-Royce, selling power-by-the-hour instead of jet engines, and Michelin, the French tire manufacturer, selling Michelin Fleet Solution – pay by the mile - to lorry fleet operators instead of selling truck tires.

With regard to Chapter 3, the business models of reuse and remanufacturing of products have received a substantial push from regulators. The 2008 waste directive 2008/98/EC of the European Union defines waste prevention as measures taken before a … product has become waste, and which reduce the quantity of waste through the re-use of products or the extension of the life span of products. And the World Trade Organization (WTO) has published a note in 2009 to facilitate the trade in remanufactured goods.

Other changes will also promote the Performance Economy in the coming years. The debate on sustainability is presently focused on climate change, the emissions of green house gases (GHG) and particularly of CO2. It has led to the vision of a low-carbon economy proposed by policymakers in the UK and the US. However, most people do not make the link to the prevention of GHG emissions through the reuse and remanufacturing of products, which preserves the embodied energy as well as the embodied GHG and CO2 emissions. No carbon credits are given at present for carbon prevention; when this change happens, maintaining performance over time will receive an additional economic and political incentive over manufacturing!

The author hopes that the present global debate on climate change will open the eyes of many actors, including politicians, policymakers and journalists, for the opportunities hidden in the Performance Economy to reach a much more sustainable society through a resource-miser economy – an economy with a substantially higher value per weight ratio, creating more employment, wealth and welfare with a greatly reduced resource throughput.

For more information please visit the authors website: www.product-life.org