Since the beginning of industrialisation, the underlying economic logic of business is one known as ‘take-make-use-dispose’. The causal consequence of this linearity is not only the production of unwanted material at the end of a product’s lifetime, which is also known as waste, but also the depletion of resources and further negative impacts along all steps such as CO2 emissions, micro plastics or soil poisoning,… This results in a situation where current and further economic activity depends on massive resource extraction, and an increasing pressure on our environment. By design, waste has become an integral part of our industrialised consumer society, so much so that incremental changes or efficiency measures do not offer acceptable solutions. To really tackle the problem, companies need to fundamentally change their business model – their underlying way of doing business. Instead of focusing on traditional linear-oriented business models, companies need to develop circular business models that allow for sustainable and closed resource loops in their industry.
“In a circular economy, we use as few raw materials as possible and utilize them optimally. Products are designed so that as few raw materials as possible are needed and the raw materials used are used for as long as possible and then reused to a high standard. Designers design in a different way and manufacturers produce in a different way.” – QUOTE?
The maximum utilisation and reusability of technical materials are known as the RE activities.
Circular cycles make it possible to create and maintain value by having parties cooperate in such a way that products, materials and raw materials can be optimally used. A common classification is to distinguish two main types of cycles:
The first is about the recycling of raw materials. The second is about up-cycling and the conversion of raw materials and materials. This means that a certain substance that no longer has any value in its current function is converted into a new valuable raw material.
There are four ways to organise a cycle, namely:
On the basis of these two circular principles, products are designed differently, raw materials are reconsidered and production processes are organised differently. As a business model is defined as the structure of how an organisation creates, delivers and captures value, it is logical that this structure will change when switching from a linear to a circular model.
An interesting list of ecosystem patterns is found in the white paper ‘Business Model innovation for the Circular Economy’ from Stechow, Takacs & Frankenberger – University of Sanct Gallen. You can download the paper from the website circularnavigator.com or find it here: resources.bmilab.com