This issue, The Circular Economy: Moving from theory to practice, is a special collection of articles about the transition taking place as companies use circular-economy concepts to capture more value from resources and to provide customers with better experiences.
Since the Industrial Revolution, companies and consumers have largely adhered to a linear model of value creation that begins with extraction and concludes with end-of-life disposal. Resources are acquired, processed using energy and labor, and sold as goods—with the expectation that customers will discard those goods and buy more. Contemporary trends, however, have exposed the wastefulness of such take–make–dispose systems. The same trends have also made it practical to conserve assets and materials so maximum value can be derived from them.
Consider that resource prices have become more volatile and are expected to rise over the long term, as consumer demand increases and easy-to-access, high-grade stocks of key commodities dwindle. People and companies are increasingly willing to pay as needed to use durable goods, rather than to buy them outright. With digital technologies and novel designs, items can be tracked and maintained efficiently, which makes it easier to extend their useful lives. And governments are imposing new restrictions on pollution and waste that apply along entire product life cycles.
These developments mean that it is increasingly advantageous to redeploy resources over and over, often for the same or comparable purposes. This is the organizing principle of circular economies, and the benefits that come from following it can be substantial. According to the research documented in “Finding growth within: A new framework for Europe,” a circular economy could generate a net economic gain of €1.8 trillion per year by 2030. The building sector, for example, could halve construction costs with industrial and modular processes. Car sharing, autonomous driving, electric vehicles, and better materials could lower the cost of driving by 75 percent.
The circular economy is gaining increasing attention in Europe and around the world as a potential way for our society to increase prosperity, while reducing dependence on primary materials and energy.