Tuesday, 11 February 2014

How far off is the Circular Economy?

So what is a circular economy I hear you ask?

The best way to explain a circular economy is to look at our current linear economy. Our economy today is mainly driven through taking in material from the ground, manufacturing something, and ultimately that material or product, gets thrown away.While the world is progressively recycling more, with a circular economy you go further in that you design products to be regenerative. Therefore you design a car for re-manufacture, dis-assembly and de-componentisation. A circular economy allows for the materials that sit within the global economy that currently get thrown away to go back in. 
Economically this will involve everything from different financing of those products and materials to different business models. Do we sell the product...or...do people pay per use of the product or those materials for the period of time they have possession of it?
This short YouTube clip illustrates the concept nicely.

Commodity prices have been trending up for a long time and most are becoming increasingly scarce. Adopting circular economy principles radically changes the rules of production and manufacturing costs. Environmental impact would also be reduced. The gains for us all are potentially be enormous.
There are so many exciting changes happening as global competition gains more momentum. We are seeing new industries spring up and many old economy businesses fall by the wayside. For any company to have a long term future it's senior management must be scanning the horizon to ensure that they are not only competitive at home but globally competitive. 
Adoption of modern thinking such as circular economy principles will certainly be another contributor to long term viability of businesses and sustainability.
What can you do in your business to move toward this and what opportunities do you see?
All for now,