A Circular Economy represents not just a paradigm shift that waste is reconstructed to resources through reuse and recreation; it is also about getting more economic boost by resource efficiency and industrial transformation. In this article, Terence Tse, Mark Esposito and Khaled Soufani discuss how a Circular Economy can bring new growth through efficient management of resources.
Circular Economy at a Glance
The world is experiencing mounting resources pressure with a population of nearly 9 billion expected by 2030. The current linear approach of growth is based on the assumption that resources are abundant and cheap to dispose. While there is nothing wrong with it, in principle, the access to the resources, which are finite, has suffered ongoing stress to the pool of available materials and its use and extraction have deteriorated the current situation significantly leading to an alarming sign of massive waste.
To this extent, in late 2015, the European Commission will present an ambitious circular economy strategy to transform Europe into a more competitive resource-efficient economy. While there is expectation of this new ambitious manoeuvre, a question looms: what is Circular Economy all about?
What Circular Economy is About?
Circular Economy, as it suggests, is a redesign of the future through the restoration and regeneration of new business models and consumption approach of “cradle to cradle”. Through reusing and recycling, “waste” is turned to resource. All resources are handled efficiently as their life cycle. In the broadest sense, Circular Economy can be divided into 3 main areas. First, tremendous waste will be reduced in both production and consumption processes. Second, increasing effectiveness and efficiency of resources by a way called “Servitisation”, which displays a strategy of generating value by adding services on top of products or even replacing just selling products. Lastly, the concept of consumption will be changed from trendy premature update to broadening and lengthening the consumption and use, which leads to longer and wider use of products.