Three lessons that have been forgotten regarding the circular economy

I remember vividly the first time the concept of circular economies was brought to my awareness. The professor Conny Bakker was seated in front of the tiniest lecture hall in the department of Industrial Design Engineering at Delft University of Technology, The Netherlands. “Waste is design gone wrong,” Bakker told us. It was the department’s (probably that of the University’s) first class on circular design for products – which was offered as a one-time option to a small group of undergraduate students. The circular economy appeared to be precisely the concept I had been wishing for. It gave the design and business a leading part in the tale of an improved and more resilient future.

This concept of circular economics has proved to be a source of inspiration for not only me but to many companies who are thinking of changing their business models and multilateral institutions like, for instance, the European Commission working on the Green Deal. The core of the concept is figuring out the process of removing waste, revitalizing the natural capital, generating it again, and prolonging the lifespan of products. It is expected to separate economic growth from resource limitations. The majority of this will be ignited by technology like the internet. It’s a bold goal.

Through the years, several businesses and consultancy firms took on the concept of circular economies in their modern version and began developing techniques and tools. As shown in Box 1, most of these efforts come out as lists. When you look at the five model business plans, it is clear that the concept of a circular economy is commonplace, in the sense that “let’s keep the economy mostly as it is but rework the question: how do we produce?”.

Box 1: Reverse again consulting firm Accenture, along with ING Bank, identified five “new” business models producing resource productivity:

• Circular resources are fully renewable recycled or biodegradable sources that are the basis of circular systems of production and consumption;
• Resource recovery allows an organization to reduce material leakage and maximize the value of its product returns;
• Product life extension enables companies to extend the life cycle of assets and products for other purposes. The value that would otherwise be lost due to waste materials is preserved or increased by fixing and upgrading products.
• Sharing platforms to create an environment for collaboration between product users, whether they are organizations or individuals; and
• The product gives an alternative to the conventional model of buying and owning products that a few or many customers utilize via a lease or pay-for-use agreement.

In this evolving process, some of the fundamental lessons learned by early thinkers might have vanished in the ongoing public debate. The majority of those who conceived the basis of circular economies, including Braungart as well as McDonough (Cradle to Cradle), Janine Benyus (Biomimicry), and Gunter Pauli (Blue Economy), affirm that the core of a circular economic system is the shift to utilizing the latest insights in technology, focusing on living systems that are feedback-rich and particularly.

A systems perspective substitutes the drab toolbox for an outlook or lens to view the possibilities for aa real circular economy. It is apparent that the most important lessons, which were lost over time, need a view of the world that is of greater complexity than a linear, mechanical perspective so, to ensure that the discussion shifts beyond merely a list or a toolbox toward more holistic concepts of a circular economic system, it is crucial to revisit and emphasize certain aspects of the circular economy that have been lost over time.

Lesson 1: Efficacy before efficiency

The study from Braungart and McDonough insists on the difference between effectiveness and efficiency. Using Peter Drucker’s definition of “doing the right thing” and “doing things right,” they frequently explained the notion of efficiency using the metaphor of a cherry tree. Each year when a cherry blossoms, it brings about an abundance of fruit – all to get a new tree.

It might appear unproductive and inefficient when the earth is smothered with blossoms of cherry; however, this abundance has been developed over time to serve various functions. What seems to be waste is food to the system. It’s effective. In contrast, most of the new or refreshed business models proposed in the work of Accenture or ING (see Box 1.) focus on using fewer materials or a higher utilization rather than considering how value is created in a given system. These models are more focused on efficiency. Does that pose an issue?

Sally Goerner may answer this question: she suggests that the most effective systems are characterized by an interplay of effectiveness (fewer connecting nodes) and resilience (many connections and nodes). When a system achieves the proper balance between both, it opens a “window of viability” (see the chart below).)

Chart 1: The window of viability is where natural life ecosystems interplay between efficiency and resilience.

This basic yet profound understanding is often ignored as the dominant view is one of causing less harm. Does an economy have to be circular if there isn’t any activity that builds capital or enhances them? The phrase “feed your forest so that it can feed itself’ captures the concept as it feeds the soil and its diverse activities, on which all that could be described as the forest is dependent.