Closing the Loop
“By 2030, the European Union could record a 30% increase in productivity with the transition to a circular economy, which would simultaneously influence job creation and GDP growth”- European Union, n.d.
The economy could benefit a great deal by filling the gap that is present in the market. A closed-loop economy allows for added value of items to stay in the circle for as much time as possible aiming for zero landfills hence saving virgin resources. A very crucial part of this is to have a good product design which affects the environment the least through its life and even less after its usage. (Price Waterhouse Coopers.n.d) This can be achieved by product design strategies mentioned earlier. They must follow the 3R rules: reduce, reuse and recycle and other circular economy principles. Circular Business Model offers new chances to take advantage of and the relationship between the customer and manufacturers is altered as well. Linder and Williander (2015) define the circular business model as “a business model in which the conceptual logic of value creation is based on the use of economic value retained in products after applying new offers in production” The essence of the circular business model, according to Renswoude et al., (2015) is the creation of circular value, which includes everything from simple product maintenance and repair to trying to prolong life cycle of a product, buying recycled waste streams, reusing resources and materials, and finally trading product functions and custom designed production.
Forum for the Future (2018) believes that circular business models are ground-breaking innovative company models aiming at enhancing the level of economic system sustainability using circular ideas.
Slotegraaf (2012) identifies two trends that have made upcycling a feasible alternative for businesses to take on; open innovation and sustainability
- 1. Upcycling through Open Innovation: According to Roscoe, Cousins, and Lamming (2016), the intensity of ties with individual suppliers can help businesses develop and adopt ecoinnovations. Furthermore, at various phases of the product life cycle, there is a focus on the distinct and varied requirements of co-creation with external partners. In any case, a single organization is very less likely to hold all the necessary knowledge aspects to effectively succeed in ecologically sustainable innovation activities such as upcycling (Slotegraaf, 2012).
- 2. Upcycling through Sustainability: An innovative Business Model is able to change the way we think about something that we previously believed was easy. That is what producing value from trash accomplishes, since it essentially eliminates the idea of waste in the process (Bocken et al., 2014) According to Bocken et al. (2014), generating value from trash relies on collaborations, which are typically formed outside of the sector. The potential applications are unlimited when diverse enterprises come together, but the degree of open innovation in a company determines how many applications are possible. As anticipated by Slotegraaf (2012), the emergence of open innovation makes this sector more suitable to many businesses that had no viable solutions a decade ago, demonstrating the relationship between open innovation and sustainability once again. Industrial symbiosis happens in eco-industrial parks where a lot of unrelated companies collaborate to reutilize each other's trash, decreasing their combines footprint significantly (Chertow, 2000) These eco-industrial parks imitate nature by treating waste as a simple input
- into another operation, resulting in closed loops.