An emerging global business model: An introduction to circular economy

By | June 29, 2016

We have limited resources – and yet we have continued to utilise our global assets as if they were endless. We freely discard items which we regard as no longer relevant to us with barely a second thought and ‘throw them away’ – as if there is an ‘away’ to throw them (think about it); and we fail to maximise our business revenues by not being smarter about the business models we adopt and the way we use finite resources.

The circular economy is a compelling alternative to the linear ‘take, make and dispose’ business model which has prevailed over the last 200 years and which, if uncontested will lead to increasing scarcity, volatility and disparity across world markets and indeed the global population. Challenging the status quo and offering some different business models, which could completely revolutionise our thinking about the products and services we offer and indeed the way we live, the circular economy offers an opportunity to build a roadmap for greater resilience in both business and the broader society.

In short, the circular economy is a truly restorative and regenerative economic model which looks to recover and maximise all our resources whilst applying different parameters and business models within our supply/value chains. This supports greater resistance to market volatility and disruption and offers the potential for business to access new market segments via new types of client relationships. It also offers governments the opportunity to look at broader flows within society and how we manage these to best effect.

This is not a sustainability agenda, nor is this about cutting our cloth accordingly… this is the way society will work in the future. It offers new windows into innovative ways of considering current business and societal challenges not only to gain short term cost benefits today, but to take advantage of some striking longer term strategic opportunities too.

Some of the world’s most impressive companies are beginning to adopt circular models, such as Veolia, Philips, Ikea, Nike and Renault… to mention just a few. Equally impressive is the interest of regional and national governments, including Taiwan, Scotland, Denmark, Catalonia, Phoenix and London.

A model of the circular economy model

A model of the circular economy model

The idea is not new, until relatively recently, the laws of life have demanded that we use our resources wisely, nature’s own designs are restorative – we have had serious global amnesia over the last 200 years about the laws of life and nature. Design for the end at the beginning, design models of flow, which allow you to take back your resources when they no longer have a use for the consumer and re-use the resources contained within rather than virgin resources wherever possible.

Consider the opportunities and benefits:

  • To have greater dialogue with consumers
  • To sell and sell again… perhaps to different market segments
  • To lease rather than sell at all (think about your mobile phone)
  • Design to re-use components of your products/service

The University of Bradford offers the world’s first PG Certificate and online MBA in Circular Economy which currently has more 100 participating students from across the world.

More information on the Circular Economy – Distance Learning MBA is available on the website.

See the Ellen MacArthur Foundation for more details on the circular economy.

About Michele Miller

Michele Miller is the Executive Education Manager at the University of Bradford School of Management. Before that she was the Circular Economy Projects Manager at the University.