The linear economy is the most commonly used production model in the world. This model has the philosophy of "take-make-use-eliminate", for example, it is common for telephone companies to take lithium, use it to manufacture the battery of a new mobile phone, sell it to consumers, who will use it for about a year, dispose of it, and purchase a new phone made by the same process. On the other hand, the circular economy is a model that offers the opportunity to all kinds of businesses of an “endless cycle”, where the philosophy of the model is to “repair, reuse, recycle”. This production model produces a positive impact on the environment and adds additional value to the product.
This model is not new, but it is currently gaining strength thanks to the importance of environmental protection issues. For example, Borkowsky (2020) notes that chemical companies have become increasingly sustainable over the years by continually optimizing their complex production systems. However, the MacArthur Foundation states that the transition to a circular economy is not only equivalent to adjustments aimed at reducing the negative impacts of the linear economy but also represents a systemic change that generates long-term resilience, commercial and economic opportunities, and environmental and social benefits.
Challenges to overcome to achieve the paradigm shift towards a circular economy
The main challenges we face in the process of achieving the paradigm shift towards a circular economy can be summarized in four: education, research, investment, and innovation.
Changes must be made in the educational system. Universities must prepare professionals to carry out and solve problems that may occur in this production model. Research should be promoted with the aim of finding new ways and processes to recycle the waste generated. It is necessary to encourage investment in physical capital towards companies that use this new approach and investment towards research carried out with the aim of creating “circular products by design” and solving the problems generated by pollution and consumerism. Finally, it is necessary to work on innovation and entrepreneurship in manufacturing, consumption, recycling, and other processes.
Adelaida Sacristán, Director of Studies, on the circular economy, transformation, and innovation at Cotec indicate in an interview that “the transition towards this new model implies a systemic change that affects the entire economy and includes all products and services, with decisive links with sustainability, competitiveness, innovation, and employment (…) the adaptation of companies to the circular model is taking place gradually (…). The Circular Economy requires multidisciplinary solutions: social, economic, political, and technical. (…) The transition to a new circular model implies a systemic change that affects the entire economy."
References and where to learn more
Borkowsky, A. (2020). The circular economy – our economic system is facing a paradigm shift. Available at: <https://www.linkedin.com/pulse/circular-economy-our-economic-system-facing-paradigm-shift-borkowsky-1f/> [Accessed 10/12/2020].
Entrevista a Adelaida Sacristán García, Directora de Estudios de Cotec. (2020). Fundación COTEC. Available at: <https://www.retema.es/noticia/la-transicion-hacia-un-nuevo-modelo-circular-implica-un-cambio-sistemico-que-afecta-a-liWAs> [Accessed 10/12/2020].
Hacia una economía circular: motivos económicos para una transición acelerada. (n.d.). Ellen MacArthur Foundation. Available at: <https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Executive_summary_SP.pdf> [Accessed 10/12/2020].
Kowszyk, Y. & Maher, R. (2018). Estudios de caso sobre modelos de Economía Circular e integración de los Objetivos de Desarrollo Sostenible en estrategias empresariales en la UE y ALC. Fundación EU-LAC. Available at: <https://eulacfoundation.org/es/system/files/economia_circular_ods.pdf> [Accessed 7/12/2020].
Matarese, H & Alondra, M. (2020). HxN Back to Basics: What is Circular Economy?. Available at: <https://www.hechoxnosotros.org/post/hxn-back-to-basics-what-is-circular-economy> [Accessed 8/12/2020].
What is a circular economy? A framework for an economy that is restorative and regenerative by design. (n.d.). Ellen MacArthur Foundation. Available at: <https://www.ellenmacarthurfoundation.org/circular-economy/concept> [Accessed 10/12/2020].
Aka, N. (2019). Profitable shift to Circular Economy for Manufacturers and Retailers: Monetize Waste, Boost Sales, while Saving the Environment. Available at: <https://iceclog.com/profitable-shift-to-circular-economy-for-manufacturers-and-retailers-monetize-waste-boost-sales-while-saving-the-environment/> [Accessed 14/12/2020].