Virtuous Circles: The Circular Economy Gets Rolling

Circular business models are not yet widespread, but economic, social, and technological changes are quickly making circularity more enticing.

They’ve already shown great potential for increasing profits while reducing production costs and improving our planet. Meanwhile, opportunities to create competitive advantage through traditional linear methods are running out of steam.

The circular economy makes sense not just from an environmental perspective; it’s also likely the only way forward as a prosperous business strategy.

Hybrid image, one side rings of a tree trunk, other side town organized in a circle

Waste is neither expected nor accepted. It’s a failure.

What’s driving circularity

Waste: The circular economy is sustainability taken to its ultimate goal: zero waste. Waste is neither expected nor accepted. It’s a failure.

Scarce resources: Skyrocketing demand for consumer goods has turned finding and maintaining reliable sources for many raw materials into risky business. Price volatility for metals and other commodities has persisted during the past decade.

Customer preference: Customers prefer to buy from companies that visibly demonstrate sustainability, such as products that can be easily repaired or upgraded instead of being tossed into a landfill.

Technology: Digital technologies are helping to bring the circular economy and circular business models tantalizingly close to the mainstream.

Circular from the start

By factoring circular principles into product design, companies will net more profits from production, logistics, and the entire value chain, as with: 

Digital technologies: Drawing the circles closer

3D Printing: It lets manufacturers build complex shapes that are impossible using traditional methods. That means fewer parts, less waste, and easier reuse.

Sensors and the Internet of Things (IoT): Live data streams about condition, location, and availability of components are the foundation for product life extension and advanced recovery and recycling.

Machine Learning: Instant adjustments to demand and logistics enable circular supply chains that save money while reducing or eliminating waste.

Blockchain: Automating and simplifying complex exchanges of information are of great value in circular systems.

Robotics: Apple’s disassembly robot can rip apart and extract the usable materials from an iPhone in seconds.

Learn more about the circular economy

Read “Circular Economy: The Path to Sustainable Profitability.”