The Circular Economy and its future implications

The circular economy is restorative and regenerative by design, where today’s products are tomorrow’s raw materials. It is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.

Currently, our world economy is only 9.1 percent circular, leading to a massive circularity gap. To move from a linear to a circular economy, we must transform all the elements of the take-make-waste system, focusing on managing resources, how we make and use products, and what we do with them afterwards.  

Since industrial revolution we have been extracting resources from the earth to make products, which we consume, and when we no longer need them, throw away. This is called the linear economy or the “Take-make-waste” approach. The disposition of the linear economy towards wasting valuable goods is a severe problem as the planet’s resources are finite but our needs seem infinite.  Without a change, by 2050, the world’s consumption level would necessitate the resources of 3 planet Earths. This urgently calls for switching to a circular economy to ensure that we have enough raw materials for food, shelter and clothing in the future.

Benefits of a circular economy  

The debate on whether industries can increase their profitability while reducing their dependence on natural resources has been going on for decades. While economic growth has raised people's living standards, it has inevitably generated massive consumer and industrial waste, scaling linear pollution. In light of this, the circular economy has received significant traction from businesses and government leaders alike.  

In 2012, the EU adopted the Circular Economy Act (Kreislaufwirtschaftsgesetz) to build are source-efficient Europe. The reform of the legislation adopted by the Federal Cabinet on 12 February 2020 goes much further, feeding into the EU’s industrial strategy to ensure that products placed on the market are designed for sustainability, easier to reuse, repair and recycle . As businesses and governments aim to decouple economic growth from virgin resource inputs and encourage innovation, transitioning into a circular economy is bound to make a positive impact that will be felt across societies.  

1. Macro economic Growth: A combination of increased revenues from emerging circular activities and a low cost of production will lead to economic growth. As per the European Commission, more efficient use of raw materials and resources throughout the supply chain materials could reduce the need for new raw materials by 17% -24% by 2030.

2. Job creation: The impact of the circular economy on employment is primarily due to increased spending fueled by lower prices, labor-intensive  recycling activities and higher-skilled remanufacturing jobs. With substantial savings on the cost of inputs, the European GDP could grow by about3.9%, creating millions of new jobs.

3. Innovation: As the focus shifts on manufacturing products of a longer life cycle with a sustainable design, the creative opportunity increases. Replacing linear products with circular ones will lead to an innovative economy with higher technological development and profit opportunities for companies.

Industrial symbiosis  

Nobody can solve circularity on their own. Its effectiveness lies in forming sustainable relationships between the industries, suppliers and customers. The circular economy can connect industries at new levels, turning one industry’s waste into another’s raw material. This process of Industrial symbiosis is already being put into practice among many corporations. The research on how resource sharing and the flow of materials between industries can be encouraged and implemented goes back to the 2000s.  

Industrial symbiosis makes the creation of a communal network of companies easier by identifying the big players within that ecosystem. With the help of real-life collaborations between different industries, ground-breaking solutions can emerge for achieving shared long-term sustainability goals for the organizations involved.  

Getting started on Circularity  

Circularity begins with product design. With COVID-19 Pandemic exposing the vulnerability of supply chains, adopting circularity into our manufacturing processes by increasing the amount of recycled or regenerative material input has become a necessity. It is high time that we expedite this transition by bending the line and adopting a circular design. To get started on a Circular Business Model, companies should focus on interests and investments that support environmental and economic sustainability.

The key element of 1886Venture's circular business model is a Circular Industrial Design Accelerator (CIDA).By combining investing in design and circular business model innovation, we aim to capture economic value while reducing the negative environmental impact.  

The 1886Venturesstartup CIDA promotes circular designed products with a 4R philosophy. With the “Reduce, Repurpose, Recycle, Repairable” approach, discarded components from premium brands are upcycled  into innovative and highly functional lifestyle products designed for circularity. This is the main idea behind CIDA.

Technical design, quality control, and utility derived play a significant role in creating a new product. By awakening the beauty of industrial design, we can construct sustainable consumer products with measurable ROI.

As we tread on the path to circularity, what can we expect in the future?  

It is interesting to note how complex and yet how simple circular economy models can be. There is no one-size-fits-all circular economy approach. Using new biodegradable materials can entail setting up new supply chains and production procedures. However, the transition to circularity is a real  opportunity to innovate, create value and build a new customer base while ensuring sustainable success.

Get in touch with our platform CIDA to discover the hidden value of your discarded components and leverage End of Life/ Second Life initiatives with an international designer community.  A curated design and prototyping program delivers commercially viable premium products that  can change consumers’ attitude towards upcycling products and the circular economy.