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The Green Man of the Woods

Dec 21, 2006 (CNBC European Business , Joe Figueiredo )

As passionate about saving the planet as he is about succeeding in business, Dutch entrepreneur Eckart Wintzen explains how he reconciles the two. By JOE FIGUEIREDO

With his studentish clothes and hippie-length grey hair and beard, Eckart Wintzen does not look like a conventional businessman. But then Ex’tent, “the company with a conscience” he created 10 years ago, is not a conventional business. The fact that it is headquartered in Austerlitz, a particularly leafy band of greenbelt that surrounds the Dutch province of Utrecht, is a bit of a giveaway. Ex’tent invests capital and other resources in unconventional and innovative projects that aim to make a profit but also have social and ecological objectives – projects such as car-pools, videoconferencing and a digital arts academy. Perhaps surprisingly, Wintzen’s background and experience is in the ruthlessly competitive field of computer software.

Wintzen founded the Dutch subsidiary of GTE Information Systems Europe in 1973, which he subsequently bought out three years later for a nominal $5, after its American parent decided to end its IT operations on the continent. The company was subsequently renamed BSO (Bureau for Systems Development) and the Dutchman was back in business with 10 staff. He says that a mixture of luck, common sense and entrepreneurial spirit got him going. “When I started BSO, I had no business philosophy. I was a 30-year-old guy who had been in the army, and had then worked for Philips, the European Space Agency and GTE. I didn’t know what I wanted. I knew, however, what I did not want: to be like my past employers.”

Wintzen intuitively recognised the value of his workers and the importance of keeping them motivated, driving him to develop and implement an innovative cell organisational structure. As soon as the start-up had grown to a staff of more than 65, Wintzen split the company into two cells with each half functioning as a lean, competitive unit. This type of organisation worked well and was repeated over and over. Overheads stayed low and entrepreneurial instincts thrived, thanks to what Wintzen terms “friendly competition between peers”. He is also convinced that “people work best with people they know, and when their own responsibility is the main engine driving enthusiasm and quality”.

A flourishing BSO eventually merged with the software division of Dutch consumer-electronics giant Philips, and was renamed BSO/Origin, with Wintzen at the helm. But even as the company was aggressively expanding across borders, Wintzen saw green. He introduced an innovative book-keeping system of “environmental accounting”, which tracked the ecological damage (and related costs) his company was causing in carrying out its business.

By 1995, BSO/Origin had grown into an international software-services company with 6,500 employees in some 100 offices in 24 countries, with global revenues of more than €400m and a customer base that included blue-chip accounts such as Unilever, Shell, Eastman Kodak, Procter & Gamble and Motorola. By the time BSO/Origin merged in 1996 with Philips’ computer and data communications infrastructure division, Wintzen had decided it was time to move on and had already begun grooming his successor. He established Ex’tent the following year with the proceeds from the sale of his share in BSO/Origin. The “Ex” sounds like the “Eck” in Eckarts and “tent” is Dutch slang for a small company.

Considering his background, it’s no surprise that Wintzen sees electronics as a possible ecological saviour. “People who spend time in front of a screen are not burning gasoline. Flying electrons represent a far less material economy,” he says. All material things and physical activities, he explains, are bound to affect the environment directly or indirectly. Now, if we could reduce or replace them with virtual counterparts, we could reduce their environmental impact. Human activity, he says, contains emotive elements, such as well-being, fun, excitement and entertainment, usually associated with physical objects or actions. These can often be replaced by digital equivalents (the rapidly growing gaming industry is a prime example), without the harmful repercussions associated with their physical counterparts. Significantly, industry and government have started to replace costly face-to-face communications with video conferencing. However, this scenario has not really taken off, says Wintzen, for one simple reason: “Participants talk to a screen instead of a camera, and therefore never look into each other’s eyes.” This makes the interaction impersonal, something Ex’tent claims to have rectified in its Eye Catcher video telephone, using “unique mirror technology”.

For much the same ecological reasons, Ex’tent has invested in other digital projects, such as the Ex’pression College for Digital Arts, a cutting-edge, for-profit digital arts school located in Emeryville, California. Absorbing 600 graduates annually, this academy offers students the opportunity to experiment with some of the most sophisticated digital graphic and audio equipment currently available, and to qualify as new “operators” in Wintzen’s immaterial world.

A more conventionally green-sounding project is Greenwheels, which was developed in close cooperation with government authorities and public transport companies throughout the Netherlands. Similar to the famous “white bicycle” project of the 1960s, Green-wheels creates a pool of more than 1,000 cars, from which subscribers can reserve (via phone) a conveniently located vehicle, and then open it with their electronic card and access code. This project offers personalised transport while decreasing the number of cars in circulation and the parking and pollution problems they cause. Importantly, Greenwheels also makes a profit.

However, despite all the publicity he has attracted over the years, it is still hard to prove how successful Wintzen is as an entrepreneur, or Ex’tent is as a business. Although anecdotal evidence suggests some degree of success on both counts, the usual financial benchmarks are not available. As a private company, Ex’tent does not disclose any financial details, and Wintzen is not volunteering any. He is also tight-lipped when it comes to his personal fortune. One Dutch lifestyle and financial magazine once valued his wealth at €160m, a sum he vigorously refutes. However, Wintzen is far more forthcoming when it comes to expounding his success as an environmentalist. “Eye Catcher will save the planet 10 to 30 tonnes of CO2 emissions per year, depending on its application,” he proclaims.

Despite his advanced age and accomplishments, this sprightly 67-year-old is not yet ready to retire and relinquish his place on numerous environmental commissions and supervisory boards. And Wintzen, who has directly advised several Dutch government ministers, can still drum up an audience. At the 2005 International Entrepreneurship Forum and Exhibition held in Dubai, he took his place on the speaker’s rostrum with such luminaries as Donald Trump and easyJet founder Stelios Haji-Ioannou.

And although the world has come around to many of the “hippy ideas” he was spouting years ago, he is still managing to be controversial. Wintzen is currently trying to convince policymakers that the best way to safeguard the world’s dwindling natural resources is by making polluters pay directly and in full for the damage they cause. The best deterrent, he reasons, is through taxes based on how much damage particular substances, products or services do to the environment.

Eco-taxes are not a new idea. The Netherlands, for example, has long-levied a surcharge on certain consumer goods, such as washing machines and personal computers, to help pay for their environmentally friendly disposal. What Wintzen is proposing is a lot broader and further-reaching, however. Take his “value-extracted tax” (VET), which would replace value-added tax. This would be levied on all products and services, based on the impact they have on the environment and the cost of undoing the damage – from energy use and waste disposal, to travel- and transportation-related emissions – at every stage of their development and delivery.

He says: “By taxing scarce resources instead of abundantly available manpower, business would be given an incentive to develop and use environmentally friendly products and services. And reduce pollution.”

Wintzen, like Nicholas Stern, the ex-World Bank economist behind last October’s highly-publicised report on global warming, is under no illusions as to the difficulty of imposing such a tax in an equitable fashion across all sectors of society. Yet he insists that it would be relatively straightforward for a government-appointed scientific commission to calculate the amounts people would pay, and the current VAT authority and procedures could easily be deployed for regulation, enforcement and collection.

“Sure, calculating and imposing these taxes may be highly politicised,” he shrugs. “Which taxes are not?”

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