The Circular Economy
“Every few hundred years in Western history there occurs a sharp transformation. Within a few short decades, society – its world view, its basic values, its social and political structure, its arts, its key institutions – rearranges itself. Fifty years later there is a new world.” - (Drucker, 1992)
With the world changing at such a fast pace, aspiring entrepreneurs rush to take advantage of the situation. The digitization of everything around us is pushing the world to transform into a new age at an incredible rate, impacting our everyday lifestyle. The linear economy which was practiced from early industrial revolutions depending on take, make and waste, is being overtaken by different business
models. In a time where the planet earth is facing issues like global warming, environmental degradation and depletion of resources, it is essential to shift from linear economy and adopt different business models. Majority of the items are thrown away to only end up in landfills before they are physically worn
out because of reasons like the design is no longer popular or match the ongoing situations. Chapman (2005:26) points out “Landfills around the world swell with fully functional appliances—freezers that still freeze and toasters that still toast.” Even with such circumstances there are companies which design products in a way so they long for a shorter period to increase sales by decreasing the period between purchases. (White, 2008) So the population is increasing leading to an increase in demand in addition with products getting out of style leading people to throw them out quickly. The circular economy is inspired by the wilderness where nothing goes to waste, where one organism’s waste is some other organism’s
food, and the sun is the gives energy. A dead goat is consumed by another predating animal which in turn becomes nutrients for soil and the circle carries on. Similarly, we decrease waste by redesigning items so they can be reused or disassembled at the end of a cycle and be put back in the cycle, maintaining the
highest level of value of the items. (Ellen MacArthur Foundation, 2013)
The circular economy could be defined in several ways. The Ellen Macarthur Foundation (2017) explains it as “a systemic approach to economic development designed to benefit businesses, society and the environment”. Metabolic (n.d.) defines it as “a new economic model for addressing human needs and
fairly distributing resources without undermining the functioning of the biosphere or crossing any planetary boundaries”. There is also a ‘crowdsourced’ explanation to it as well made by Open Source Circular Economy Days(n.d.;cited in Weetman, 2016): ‘Circular economy is the concept of a truly sustainable economy that works without waste, saved resources and is in synergy with the biosphere.
Rather than seeing emission, by-products or damaged and unwanted good as “waste”, in the circular economy they become raw materials, nutrients for a new production cycle.’ There are several ways to put
the idea of circular economy in words but the principle of circular economy makes it clearer. Few of the essential ones are design out waste; maintain the highest value for the maximum amount of time; and increase renewables. (Liu and Ramakrishna, 2020) Ellen MacArthur Foundation (2013) says that there are
4 main elements which build circular economy:
1. Circular Economy Design: product system and design need to be rethought so they promote reuse, recycling and upcycling. This is focused on being careful when it comes to material selection and modular elements so they last longer can easily be disassembled and be easily separated and be reused at end of life.
2. Innovative business models to venture on new opportunities: Big companies have the chance to drive circularity in their business model. Ideas as well as materials and products will originate from startups and disruptors which would lead the leader to inspire and encourage one another to increase the pace of transition.
3. Reverse Cycles: The return of material and product to the soil or back into the system needs to be carefully rethought and redesigned. This covers organization, storage, risk management, investment of energy and also molecular biology. End-of-life systems for products must be carefully laid out as early as the design stage itself. This includes effective and efficient collection and sorting of products, treatment and disassembling them.
4. Enablers and favorable system conditions: Recently developed or altered market mechanisms can motivate reuse of materials and more resource efficiency. These ideas need to be supported by government, educational institutions and famous opinion leaders.
With the world changing at such a fast pace, aspiring entrepreneurs rush to take advantage of the situation. The digitization of everything around us is pushing the world to transform into a new age at an incredible rate, impacting our everyday lifestyle. The linear economy which was practiced from early industrial revolutions depending on take, make and waste, is being overtaken by different business
models. In a time where the planet earth is facing issues like global warming, environmental degradation and depletion of resources, it is essential to shift from linear economy and adopt different business models. Majority of the items are thrown away to only end up in landfills before they are physically worn
out because of reasons like the design is no longer popular or match the ongoing situations. Chapman (2005:26) points out “Landfills around the world swell with fully functional appliances—freezers that still freeze and toasters that still toast.” Even with such circumstances there are companies which design products in a way so they long for a shorter period to increase sales by decreasing the period between purchases. (White, 2008) So the population is increasing leading to an increase in demand in addition with products getting out of style leading people to throw them out quickly. The circular economy is inspired by the wilderness where nothing goes to waste, where one organism’s waste is some other organism’s
food, and the sun is the gives energy. A dead goat is consumed by another predating animal which in turn becomes nutrients for soil and the circle carries on. Similarly, we decrease waste by redesigning items so they can be reused or disassembled at the end of a cycle and be put back in the cycle, maintaining the
highest level of value of the items. (Ellen MacArthur Foundation, 2013)
The circular economy could be defined in several ways. The Ellen Macarthur Foundation (2017) explains it as “a systemic approach to economic development designed to benefit businesses, society and the environment”. Metabolic (n.d.) defines it as “a new economic model for addressing human needs and
fairly distributing resources without undermining the functioning of the biosphere or crossing any planetary boundaries”. There is also a ‘crowdsourced’ explanation to it as well made by Open Source Circular Economy Days(n.d.;cited in Weetman, 2016): ‘Circular economy is the concept of a truly sustainable economy that works without waste, saved resources and is in synergy with the biosphere.
Rather than seeing emission, by-products or damaged and unwanted good as “waste”, in the circular economy they become raw materials, nutrients for a new production cycle.’ There are several ways to put
the idea of circular economy in words but the principle of circular economy makes it clearer. Few of the essential ones are design out waste; maintain the highest value for the maximum amount of time; and increase renewables. (Liu and Ramakrishna, 2020) Ellen MacArthur Foundation (2013) says that there are
4 main elements which build circular economy:
1. Circular Economy Design: product system and design need to be rethought so they promote reuse, recycling and upcycling. This is focused on being careful when it comes to material selection and modular elements so they last longer can easily be disassembled and be easily separated and be reused at end of life.
2. Innovative business models to venture on new opportunities: Big companies have the chance to drive circularity in their business model. Ideas as well as materials and products will originate from startups and disruptors which would lead the leader to inspire and encourage one another to increase the pace of transition.
3. Reverse Cycles: The return of material and product to the soil or back into the system needs to be carefully rethought and redesigned. This covers organization, storage, risk management, investment of energy and also molecular biology. End-of-life systems for products must be carefully laid out as early as the design stage itself. This includes effective and efficient collection and sorting of products, treatment and disassembling them.
4. Enablers and favorable system conditions: Recently developed or altered market mechanisms can motivate reuse of materials and more resource efficiency. These ideas need to be supported by government, educational institutions and famous opinion leaders.