When the term circular economy comes up, most consider the fashion industry. In comparison to other manufacturers of goods and industries, fashion has accepted that changes need to be made and has helped to educate around the world why these changes have to happen. In doing this, those in the fashion industry who might not have felt so strongly about making such changes to their company structure have had to take those steps to remain relevant and contemporary by abiding by the standards that have been created by their competition. This is why small businesses need to remain knowledgeable on what circular economy is and how it can be applied to their processes too.
Sustainability has become more and more important as the years go on and researchers gain a greater understanding of the detrimental impact the past and the existing economy is having on the environment. As this growing awareness builds, the linear model of the economy is being scrutinised to change the mistakes that are being made for the health of the future world.
The linear economic model is described as the process of take, make and dispose. This poses a risk to natural resources as they get used up to produce a product to then be received by end-users who can only dispose of it once consumed.
The problem that we are faced with now is because the economy has grown so much it pushes our planetary limits. The natural resources that producers need are becoming scarce because of their non-renewable type. These inputs are now limited, and the outputs continue to be detrimental to the environment.
‘The Rocky Mountain Institute estimated in the year 2000 that the flow of natural materials globally is 500 billion tons per year but only 1% is put into durable products and still there 6 months later, the other 99% is waste.’
This linear economic model causes 99% waste, making it incredibly inefficient. The limits of this structure with how destructive it is in comparison to what the world needs to remain habitable is causing great concern. If we don’t stop this economic model all natural resources will be used, and global warming will increase. However, even with this knowledge the demand for products and services still increases.
Emphasis is being shifted to a new economic model to reduce this strain. The linear model focused on the gross throughput of material and energy whereas interest is now being changed to be in favour of circular economy.
Circular economy is all about identifying spaces and closing loops, so systems become self-sustaining. This specifically looks at the internal organisation of processes, how resources are used and how the overall aim is for optimised delivery of services or products in comparison to just the gross throughput of products.
This movement to circular economy relies on close feedback between those who produce and those who consume, enabling constant feedback for amendments. For small businesses, this factor remains one of the highest impactful reasons for change. The closer the relationship between consumer and producer, the higher regarded the business. Changing to or showing initiatives towards moving to circular economic processes gives consumers incentive to purchase over businesses that do not have this forethought.
In moving to circular economy, a business must look at how it functions and what effect its inputs and outputs cause. Each industry is defined as an individual industrial ecology. This is how resources and energy are identified from how they flow through these processes and where they are lost. When studied in this way processes can be interconnected to reduce waste. Along with this, by identifying where waste can be reduced it can initially be minimised to eventually reach this long-term goal. By evaluating the input and output of any given process, slowing or closing material loops, processes become more efficient for the impact they have on the world.
The design that a circular economy requires involves maintaining sustainable and long-lasting results. The regenerative approach involves repair, reuse, remanufacturing, refurbishing, and recycling to ensure that repurposing occurs to serve new functions. This movement is from one-off products or processes that eliminate resources so they can’t be reused, to how these resources can be used to their full potential. It’s crucial that businesses look to design systems that aren’t degenerative but regenerative over time.
A key to the success of a circular economy is diversity. By focusing on the interconnection of various systems it eliminates the same processes consuming the same inputs which produce unhealthy outputs that aren’t reusable or recyclable. This diversification approach tries to form alliances between different processes so each benefit from the other and there is a reduction in the waste produced or so other manufacturing reuses these ‘waste’ outputs.
Changing these relationships between varying processes stops producers and consumers from viewing services and products as singular ‘things’. These collaborative partnerships can be viewed as the mechanisms of production that have to be considered as part of the product or service. The current linear economy is a consequence of analytical thinking; what can produce the maximum output at the lowest cost. This has always been to push scaling within industries.
Circular economy is the antithesis of this. The newly applied integration of production elements changes input and output expenditures producing feedback loops and relationships throughout processes for higher and healthier efficiency.
‘The industrial ecology focuses on the material and energy flow in industrial systems. This school of thought designs an approach in which waste serves as input and any notion of undesirable by-product should be eliminated.’
Inchainge[2]