The new economy is…..Circular!

There has been a great deal of dialogue recently on decoupling economic growth from resource consumption, or revenue from resources. A new report, “Towards the Circular Economy” comes the closest to providing solid examples of how this can be achieved.

It’s all about sound product design where waste is designed out and products are designed for disassembly. Products are designed with a systems view, understanding how they will be used and how they will be reused at end of life. This is the concept behind industrial ecology. New business models that sell the service, not the product, encourage business to take ownership for product end of life. This model has been shown to cost companies and consumers less in resources and costs.

The report provides a kind of roadmap for shifting from a linear to a circular economic system. It demonstrates that it is not a niche concept. We need more examples that prove doing good for the environment adds value to your business. However, breaking the ‘take, make and waste’ habit will not be easy and it will be innovative companies who will secure first mover advantage and start to shake up our current system.
 
In the manufacturing sector, we often speak about the growing opportunity of manufacturing services. There are countless opportunities in shifting to a services offering, or packaging product and services together. An example in Australia is Orica Mining Services. Once upon a time they sold mining explosives. Today they sell services alongside the product to the sector. By selling the service in addition to the product, they not only secure additional revenue, they retain expert industry skills which will continue to add value to their business through product development and delivery.
 
Download the report, read the executive summary, and select a case study that is closer to your business to understand the benefits of the circular economy.

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