A circular economy is one that drastically limits the extraction of non-renewable raw materials as well as the disposal of waste products. The model draws its inspiration from the natural world; it represents a living system. In nature, waste from one organic process is transformed into energy for another. This is the same in a circular economy. Products and materials are strategically recovered and reused as many times as possible, for as long as possible.
Although a challenging change in mindset, the circular economy model represents a huge opportunity for governments, businesses, and communities; the World Economic forum estimates that by 2025 dedicated circular economy industries will be worth $26 billion in Australia, and $1 trillion worldwide.
Already some innovative work has been conducted in Victoria to embrace the concept. For example, Downer Group partnered with the City of Boroondara to trial 99% recycled asphalt, made from waste materials from Melbourne metropolitan areas. Rather than seeing the concept as a challenge, partnerships like this are creating opportunities to transform the business system and environment for the better.
Although some businesses are motivated to remodel their operations to fully embrace the model, there are four guiding principles of the circular economy that all businesses can employ:
Although the circular economy model is a departure from our current ways of thinking, it enables genuine sustainability and enduring advantage. To be successful it requires overcoming siloed thinking; we need collaboration between government at all levels, industry, and consumers in order to create new ways to organise the economy, conduct business, design products, share goods, and recover resources.
So, what will the economy of the future look like? Circular.