Why a circular economy is a good business model

Currently most manufacturing businesses function in a linear economy. This means that they extract resources from the ground such as metals and minerals or use energy extracted from the ground to make materials. They then turn these materials into new products, and we the consumers dispose of our old items, often without a thought to where it is going. And mostly that is into the ever growing landfill sites here and abroad.

But this system is unsustainable; the earth has limited raw materials and limited energy supplies to produce man-made materials. A circular economy on the other hand is a system that is sustainable because it is waste-free by design. Here are some of the advantages of a circular economy.

• Improved productivity levels – by easily reusing components of old products value from those products is retained instead of wasted. Much of this value could also come from repairing rather than replacing an item. For instance, what would previously have been considered

electronic waste is worth money if re-used..

• Business Benefits – Businesses can be more resilient to change and to fluctuating supply costs of raw materials.
• New Jobs – A circular economy is likely to create many new jobs across a range of skill sets including in the repair of electrical and electronic items but also in more skilled roles such as the design and manufacture of products and researching new materials more suitable for re-use. It is also thought that organisations are more likely to employ locally as fewer items are produced cheaply offshore so it is also good for local communities.
• Consumers get more durable goods – Consumers do not want to have to replace major items such as washing machines, tumble driers or fridges after just a few years; these are major items that consumers expect to last much longer than they currently do, according to recent research. In a circular economy electrical products will be more robust and easy to repair. Many people may not be familiar with the term "circular economy" but they do know that they want reliable electrical and electronic goods that last and can be repaired if necessary.

The author has written and published articles on a wide range of topics including Small Business Advice, Tax and Accounting, Interior Design, House Renovation and Project Management.