The complexity of production processes is rarely acknowledged. To get you your products, hundreds — if not thousands — of variables are in play when it comes to sourcing base materials, processing those materials, manufacturing the product, packaging the product, shipping the product, storing the product, and selling the product. The point here is that making a system circular is extremely difficult because of the complexity of those systems. Making a product lifecycle isn’t just about collecting a broken product and delivering it back to the processing center. It requires massive changes at every juncture. This is one of the biggest hurdles that allows the linear economy to keep going strong. Even if a business was committed to implementing circular processes, where would they begin? There isn’t a lot of guidance available to businesses on how to properly shift the lifecycle for their products from linear to circular. This lack of proper education, combined with a lack of resources, is a significant barrier when it comes to the growth of the circular economy. Lastly, no formal standards have been developed by governing bodies to regulate the processes required for manufacturers, distributors, or retailers to properly implement a circular economy.
Evaluating the opportunities of the circular economy
To truly get the circular economy implemented on a global scale, the opportunities involved need to be well established and communicated. Though endless opportunities are available, the key opportunities that deserve highlighting are described in this list:
Leveraging the closed loop: Allowing product materials to stay within a closed-loop material flow would greatly reduce the amount of raw material extraction required. This act alone would eliminate billions of dollars in annual costs tied not only to the extraction of these raw materials but the processing, storage, and delivery of them as well. This large saving would then, in a perfect world, adjust the sales prices of products.
Fostering optimization: After developing a system that values durability, implementing the circular economy framework would encourage the development of optimized products — products that last longer and can be easily repaired or refurbished, customized to suit your preferences, and, ultimately, easily recycled and made into a new product.
New jobs: One of the best opportunities to implement the circular economy involves the creation of new businesses and jobs. With the education required, the optimization necessary for material manufacturing and shipping processes, and the inevitable growth in material science studies, many new businesses and job opportunities will have to be created in order to support this transition from a linear economy to a circular one.
Recognizing the threats accompanying the circular economy
Where there are opportunities, there will always be threats. The circular economy isn’t unique in the sense that there aren’t things to be concerned about — there most certainly are. However, with proper planning, these potential threats can be addressed and eliminated.
One major threat is cost control. If a company were able to manage every step involved in the processing, manufacturing, distribution, and sale of a product or material, it would have total control over the pricing at every step. This isn’t good news for the consumer, especially if this item is a need and not a want. Even if it’s not just one company controlling every step of the lifecycle, a similar concern can be justified whenever multiple companies are involved — companies that could develop an anticompetitive business structure that would function as a cartel (a group of manufacturers and suppliers that collude with each other to dominate a specific market).
Another threat worth identifying is tied to the costs required to make the actual transition from linear to circular. It won’t be a cheap transition, by any means, and a major concern is that implementing policies that require businesses to adjust their operations to a circular format will be too much of a burden for small companies to accept. Requiring this transition would have a major negative impact on small businesses, which is certainly not a preferable outcome.
If you completed a business course in college, this emphasis on strengths, weaknesses, opportunities, and threats might ring a bell. Put them together and you have the pieces for a SWOT analysis, a common decision-making tool in the business world: strengths, weaknesses, opportunities, and threats. Figure 4-2 summarizes the SWOT analysis for moving to a circular economy.
FIGURE 4-2: Strengths, weaknesses, opportunities, and threats.
Borrow from nature, not from the future
It’s a big question: How do we humans maintain abundance and a high standard of living while also eliminating the waste and pollution associated with that effort? The first step in successfully answering this question lies in not assuming that being smart about how we manage our resources means that we will suffer and end up with less. The whole intent of the circular economy is to be smart in ways that help us obtain more and pollute less. To do this will require us to discover how to pair innovative manufacturing with minimal externalized costs. But at the end of the day, the way we transition to a circular economy is to borrow from nature, not from our future.
Consider a tree, for example. A single tree can produce thousands of pieces of fruit in a single season. Even though not every single piece of fruit will be harvested to eat, there’s an abundance of produce. The tree doesn’t dictate how much fruit it produces based on the demand of the systems around it, because it doesn’t have to. There’s no downside to abundance in the natural world. The extra fruit isn’t wasted, however — it’s consumed by birds and other creatures who then spread the seeds to produce more trees. Whatever the future of the fruit may be, wherever it falls, it cycles back into the system to encourage the production of more fruit the following year. It doesn’t do it alone, either; a wide array of insects, fungi, chemicals, and minerals is involved in this process. The tree itself isn’t controlling everything, but instead relies on a diverse network of partnerships with the surrounding environment.
We can take this model of resource management and begin to translate it to whatever lifecycle we’re trying to transition from linear to circular. Our product is the fruit, our distribution agents are the birds, our process partners are the insects and fungi, and so on. With this framework established, it’s quite easy to figure out where the gaps are. When the product isn’t purchased, do we have necessary partners involved who can take that unused material and produce something from it that will further strengthen our operations? Can our seeds be shared to create opportunities for greater levels of production? Whatever waste is developed within the business needs to be seen as potential nourishment for another system rather than simply discarded to the landfill.
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