Setting sail for a circular economy

By | April 29, 2014

Ellen-MacArthurDame Ellen MacArthur is the record-breaking yachstwoman who launched the Ellen MacArthur Foundation in 2010 to encourage a global shift to a circular economy. She works with Bradford University School of Management to deliver a Circular Economy MBA and delivered this keynote address at the recent Re:Thinking Progress conference at the university.

There are fundamental differences between a linear economy and a circular economy. In a linear economy, we take something out of the ground, we use it and then we throw it away. We do now recover some of the products we produce, but our entire system is designed around creating something to do a job and then disposing of it.

From the very outset, a circular economy is designed to ensure we recover every element of a product. With circular economy thinking, these products are fed back in and we work to maintain the highest value across the system.

It’s all about having the vision at the beginning to make sure we can complete the circle and build a sustainable economic model.

Circular economy thinking

Today we are seeing huge pressures on materials and more volatility in the markets than ever before. Put simply, materials are getting more expensive.

The solution for most businesses has been to use less material and use it more efficiently. However, that usually results in products that are even harder to recover materials from when they are disposed with.

This is an unsustainable strategy. If businesses continue in this direction they will ultimately have no materials, no products and no staff.

Circular economy thinking provides and new model and a new way of thinking. It’s about looking at businesses and the economy through a different lens and rethinking everything about a business from the manufacturing process to the paper you use and the miles you travel.

We are now beginning to see a real shift in thinking. Businesses are realising that by shifting to this model, there are real opportunities over and above the traditional linear economy model. That’s why businesses are interested, it’s a solution that provides a long-term future but also offers a huge economic opportunity.

Business education

The circular economy is about innovation, entrepreneurship and thinking differently. A fundamental aspect of this is systems thinking – developing a totally different way of approaching the problem.

Bradford Universitry School of Management logoEducation is key and Bradford University School of Management has been our pioneer university. It has been extraordinary in helping to create the Circular Economy MBA and our relationship has led to work with universities and businesses around the world.

Traditionally, education follows a similar linear pattern. However, circular economy thinking is about the whole picture and analysing the whole system, rather than individual elements. The challenge for education in this field is bringing all of the individual subjects together.

We need to see businesses and institutions bringing all of the elements together. Bradford is working towards that and it is revolutionary. Education has to become something different to help develop the skills we need for a circular economy.

The circular economy is not just a long-term economic model, it’s about opportunity. Businesses are now unlocking the economic opportunities of a circular economy and it is turning everything on it’s head.

Designers need to understand how the product fits into the bigger system and ask how will it be remanufactured? They have to understand all of the questions and design waste out of the system. Sales and business leaders also have to question their existing model and ask if they should sell a product at all? In many cases, businesses are now selling service agreements and retaining the ownership of the product so it can be remanufactured at the end of its life.

Business experts

To make a success of circular economy thinking every part of a business needs to be able to communicate with each other. Too many businesses I see are broken down into silos with little or no interaction between them.

You need a healthy and communicative eco-system as circular economy thinking involves change across every part of the business. What business leaders must remember is that they already have the experts they need in each part of their business. What they have to do is help them to share their expertise with each other so the business and the wider economy can benefit.

Your company already knows how to do it. It’s just about understanding the end game and getting everyone working together towards it.

A resilient economy

This is about amazing ideas and the more ideas we can get flowing the system, the better we will do.

It’s a huge challenge, but also a huge opportunity. The circular economy is about making businesses and economies more resilient. It’s simply about creating a global economy that works.

silver-bulletThe circular economy is not a silver bullet that will solve everything, but it is a framework for creating something that we can all work towards.

One thought on “Setting sail for a circular economy

  1. Osama Bawashkha

    it is a creative model, but it might be the most challenge thing is how stakeholders at all business cycle efficiently communicate to each others. Also, most of the business owners hesitate to retain the ownership of the product after delivering the product to the clarinet based on the mutual agreed terms and conditions to avoid any additional risk.
    Regards,
    Osama Bawashkha

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