You may have heard the term ‘circular economy’, yet you may be at a little bit of a loss regarding its meaning. A circular economy is one that, by design, is regenerative and restorative. It aims to keep materials, components, and products at their highest level of value and utility at all times. A lot of people mistakenly believe that a circular economy simply means one that is centred on recycling. However, it goes beyond this, as you will discover below.

Most companies follow the ‘take, make, and dispose’ economic model, but this is reaching its limits. The take, make, and dispose model is one that relies on enormous quantities of cheap and easily accessible energy and materials. A circular economy is based on the concept of a cycle that is continuously positively developed through the managing of renewable flows and finite stocks. This minimises system risks, optimises resource yields, and enhances natural capital.

At present, the linear economy is leading to extortionate waste. In fact, it is believed that 90 per cent of raw materials utilised in manufacturing become waste prior to the product even leaving the factory. Moreover, 80 per cent of products get thrown away within a mere six months of their life.

As a circular economy focuses on reducing waste, a lot of people think that it is a model of recycling. However, it is much more than this. A circular economy is geared towards designing out waste; it is a restorative industrial system. It is not only concerned with what we do with materials and products at the end of their life cycle, as recycling with waste compactors is, but it is also centred on minimal energy use during the process.

There are plenty of compelling reasons why this business model is worth considering, aside from the fact that it is good for the environment. It is also positive for the economy. It is believed that a circular economy could have added $1 trillion to the global economy by 2025. The manufacturing industry will be the first to feel the benefits, as a result of their reliance on raw materials.

It is also set to change how we consume products. We may see the ‘pay per use’ model we are currently offered with our smartphones applied to other electrical products, such as washing machines, as well as standard products, such as clothing. Therefore, we may find ourselves paying for performance and access instead of ownership. This would make it easier for companies to remanufacture, reuse, and repair, as they would retain ownership.

To conclude, the circular economy is a model you are bound to hear more and more about as the years go by, and it gets more and more prominent. The take, make, and disposal model is losing its effectiveness, and leaving a lot of waste along the way. Now is time for a change.