The World Economic Forum’s circular economy definition is “an industrial system that is restorative or regenerative by intention and design.” As opposed to the traditional linear model that transforms raw materials into products that are used once and discarded, the circular model closes the loop by bringing products back into the cycle after use so they can be reused, recycled, or repurposed.
Also referred to as circularity, this model is based on three principles:
- Design out waste and pollution
- Keep products and materials in use
- Regenerate natural systems
The success of the circular economy model depends on certain core elements. First, products must be designed to be future proof – made of the right materials for an appropriate lifetime. This includes using renewable energy and renewable, reusable, and non-toxic resources in an efficient way. Success requires a shift in mindset. Waste is a resource; it must be recovered for reuse and recycling, which in turn requires the right infrastructure. Enterprises must rethink their business models and find opportunities to create greater value by building on the interaction between products and services. And finally, the new model requires digital technology that can track, monitor, and analyze relevant data across the entire process.
Circular business models reuse everything, but they rely heavily on emerging technologies to enable the path to sustainable profitability. Excellent read![Read More]