Circular Economy 2.1 by Alexandre Lemille
Don't just ReUse, ReValue instead !
A Clear Direction
In the
ambitious Circular Economy vision, corporate have at last a complete set of
business models to implement helping them rethink the way they do business. We
keep on hearing that businesses have to shift track towards a
business-as-unusual path, but until recently there was no clear direction
provided by experts in corporate strategy and sustainability.
[...]
boosting the economy in new ways
and at a pace never achieved before
and at a pace never achieved before
Thanks to
the reuse of vast amounts of materials the Circular Economy aims at decoupling
our need for resources versus our economic growth. This means that we would be
able to expand our economies in the coming decades while reducing our thirst
for virgin materials. To help companies innovate, the circular framework is
supported by a comprehensive set of principles and concepts. They are critical
to achieve the real net positive benefits that are expected across the bottom
line: valuing the people, regenerating the environment and boosting the economy
in new ways and at a pace never achieved before.
Recent surveys have confirmed that these
three types of impact could become a reality:
- The Club of Rome has
done a first estimate of the numerous job creation and drop in unemployment rates
starting with specific countries in Europe;
- Circle Economy and
Ecofys have just issued a report indicating that the Paris targets could be achieved if we all
invest in a circular strategies;
- And
thirdly, an estimated $4.5 trillion euros of new global economic opportunities
have been unveiled from the work of Peter Lacy & Jakob Rutqvitz of Accenture.
Circular
Economy outlines that we can no longer follow the linear take-make-waste model
given the hugely negative consequences a consumption based approach has on our
economies, on our climate and overall environmental services. Thanks to the
creation of several feedback loops alongside that linear chain we are now able
to mimic natural principles and find radical solutions to curb pollution, to
value waste as unused resources and embed numerous externalities – air
pollution, noise, waste, chemical releases, CO2 emissions, traffic congestion
to name a few - that are generated by our consumption patterns. By embedding
pollution, waste and other externalities we are now able to reduce our effect
on the environment drastically.
A 4.5
trillion euros potential where Paris Climate Targets could be achievable!
The ReUse Smaller Loop
One of the first loop within the Circular
Economy butterfly diagram is 'ReUse'. The objective here is to constantly use
the same product in the economy the longest way possible. With a renewed focus
on durability and quality, we are here aiming at generating several cash-flows
from a good offered exclusively as a service. Products can now be designed to
be accessed by any customers this way, meant to be maintained as well as reused
subsequently in their targeted markets. Depending on their characteristics,
nature and features , they may well be sent back to the remanufacturing units
to be dismantled, parts refurbished with the objective of creating brand new
merchandise ready to be resold into several useful lives. Shops are thus no
longer points of sales but rather points of services aiming at constantly
growing our usage experience. The faster products go back to the economy, the
better for the original manufacturers who can expect to generate several
cash-flows from them while lowering their production and operational costs.
Is
'ReUse' inspiring enough?
While a
model based on the concept of ‘reuse’ is acceptable in some markets and related
cultures – for instance in Europe – the very same term is not so well
acknowledged in many other countries, such as African countries, India, parts
of Latin America and Asia. Why? Because the sharing and reusing economy has not
only be there ever since, but has now a wrong connotation. Constant reuses,
share of vehicles, clothes and other goods of our daily lives have been
mainstream activities and core to these economies for many years. So what is
new here?
One cannot
expect to present the Circular Economy with the same wording unless you face
direct scepticism from your audience. We all know that when you start
introducing yourself as a sustainability expert, you have already lost 20% of
the attention. On top of that explaining that reusing products endlessly can be
a new way to consume goods, you lose an additional 40%, not to mention business
cases like leasing clothes… By that time you feel quite lonely.
The choice
of wording here is critical. Depending on the local culture and the market
profile, expressions we use for granted in some regions can be wrongly
interpreted elsewhere. In many places talking about the 'reuse of products'
might not generate the expected excitement you find in others.
The term
'ReUsing' is misinterpreted
'ReValue' is rather the loop's intention
here
In butterfly diagram, one of the smaller loop
translates our ability to create many new values from the goods, so that we
will thrive tomorrow. Revaluing vast amount of materials in a 'ReValue' loop –
instead of the 'ReUse' one – might generate many more bold innovation in the
space of transforming products than it would have in a reuse thinking mind-set.
We are entering the era of the experience where goods performance will be
critical to keep customers’ satisfaction high at all times. Remanufacturers
will have to constantly offer new features that last longer into the several
subsequent useful lives of manufactured goods. What we want to achieve here is
products that are regenerative in nature, i.e. they not only perform better,
they are also meant to satisfy next customers, and on top of that, they will
generate net positive effects on our ecosystems. This view is much more
appealing than just reusing products continuously.
Thriving is
about 'ReValuing' materials
A
'ReValue Loop' would drive bold innovations quicker
If instead we could directly aim at 'revaluing', we
would have made a leap forward in the right direction. In revaluing, we
understand that the product is designed or will be redesigned in such a way
that it will provide a better value for money and for impact in its next life
with the aim of constantly creating over-performing features as we advance the
research and development space.
Business
models based on revalued product-of-services will be much more appealing to any
audience be it in grown-up or growing up markets. It speaks by itself and makes
sense for businesses to thrive towards that new goal.
Reuse sounds
like one needs to keep afloat a product for as long as it can be offered in the
economy. Revalue - on the contrary - explains that whether the product or its
related service(s) will keep exceeding expectations in its next lives. This
approach should drive many more innovations and will help us move away from the
unappealing concept of having to use something that someone else used already
(even-though we know that products have been refurbished or transformed prior
to be made available in the markets again). A shift in perception is required.
We live in
an era where one should radically change the way we innovate in creating values
across the board: generating many positive ripple effects and benefits to service
'experimenters', drive performance up and control costs in new ways for its remanufactures, while embedding all externalities - environmental, economic or
social ones - as much as possible.
Only with bold approaches will we achieve
the right transformations.
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