The circular model has recently been formalized by the Ellen MacArthur foundation. Former global solo sailor MacArthur has united the forces of many large multinationals to define and put in practice the concept of a circular economy. The foundation provides a solid set of research documents and case studies and brings together professionals to jointly work towards this model. Even the 2015 world economic forum in Davos had a dedicated track for the circular economy with William McDonough leading the program.
So, what is this about? While this is a much deeper topic, I will try to give a high-level overview.
As defined by Braungart / McDonough the cradle-to-cradle design philosophy distinguishes between products of consumption (such as shampoo, cleaning products, etc.) and products of service (such as cars, phones, printers, etc.). For the latter, the circular model differentiates between biological and technical product components. Focusing on the technical 'nutrients', products should be designed with the following goals:
- we are users, not consumers: instead of acquiring a product from a vendor, we only get the right to use for its useful life. This shift in ownership ensures that the technical nutrients are entirely returned to the manufacturer for upcycling.
- the principle of circularity: products should be able to be first repaired by the user, then maintained by a service provider, then reused or redistributed by the product manufacturer and finally refurbished or recycled by the parts manufacturer.
- cascading use: products and components or materials should be designed to be able to function in various stages of their life. Today's cell phone processor could be a control unit in tomorrow's dishwasher.
- modularity: to maximize the reclaim rate on recycling, products must use no blended or toxic materials. Period. And they must maximize modularity to support reuse and repair.
access economy. Many of the things we source new today are already available, although not owned by the person in (temporary) need of the product. If we only had convenient and reliable access to a product for use, we would not need to buy it. This is also the driving concept behind all forms of the sharing economy that is taking off in many industries from ride/car sharing to couch surfing to sharing anything on snapgoods/simplist.
If these concepts have been around for a while, why is it now making a difference? Here are some reasons:
- I believe the increasing resource scarcity will force consumer goods companies to look at their supply chains for circular potential. According to MacArthur research, this is an almost unprecedented savings opportunity.
- IT systems can now trace materials through the supply chain and optimize their use efficiently. This also leads to new accounting models tracking circularity (such as material flow cost accounting).
- The next generation of consumers will question the very assumption of consumption and qualify themselves as users in a sharing economy. Although psychologically not intuitive, there is no implicit reduction in prosperity when sharing.
- Social media can advocate circular products much faster and compete with traditional linear product marketing which silences all negative consumption consequences.