The Circle Of Life: Innovation In The Circular Economy
Imagine a world where business is booming – creating new jobs, innovative new products, and making a profit – all while not putting any pressure on the planet’s finite resources. Does it sound like a fantasy? According to the 2013 Ellen MacArthur Foundation report, “Towards the Circular Economy," not only is it possible, it’s vital if businesses want to survive the future and continue to be innovative.
Have you ever heard yourself say, “They just don’t make things like they used to!” Unfortunately, that’s correct. They don’t. As the report details, business has operated under a linear model for the past 150 years. Meaning, from soup to nuts, the lifecycle of a product is simple: item X is made from raw materials, it’s sold and then used by a consumer who, ultimately, throws it away. In the developed world, where we’ve become all too accustomed to abundance, this linear model has persisted over the traditional economy that make products that could be reused, but were costlier to produce and required more labor. Meaning that you used to pay top dollar for a pair of shoes that would last you 10 years. Now, we can and expect to buy a cheap pair of shoes every season.
It’s a one-way model of production and consumption that has been the basis of planned obsolescence – it’s also been enormously profitable. Goods are less expensive to make when they don’t need to last a lifetime, and accordingly, they can be sold to consumers at a more affordable price. While the cost of these products is cheap, the cost to society – in the form of never before seen levels of pollution and waste – has been heavy.
The linear model is one that only works well if there are abundant raw materials to use for production, willing consumers, and open landfills. But the world is changing – the population is on track to reach 5 billion by 2030 – and it’s projected that there will be three billion new middle-class consumers entering the market in the next 10 years. But as researchers Rebecca MacWhirter and Derek Stephenson note, “The global economy of tomorrow will face material scarcity and supply chain insecurity at an unprecedented scale — an inevitable consequence of an industrial era based on a make/use/dispose model.” It will be a fierce competition for resources and a linear model will be a hindrance.
So let’s change the model.
As the Ellen MacArthur Foundation proposes, we should be working towards a circular economy – emphasizing that the lifespan of a product doesn’t end so abruptly or in a landfill. It can be profitable as well, yielding up to $700 billion in global consumer goods materials savings alone. An additional and significant benefit is the innovation and inventiveness that is a byproduct of attempting to find alternate solutions for “one-way products.” Lastly, embracing a circular model may be attractive to consumers who are likewise looking for products that will be less wasteful and longer lasting.
Many companies have already begun to examine their supply chains and reexamine their core products, but there is still a long way to go before the majority of companies embrace this new reality. As the MacArthur Foundation report writes: “Natural selection will likely favor the agile hybrids… that are best adapted to a planet transformed by humanity.”