What is the circular economy

Circular economy can be defined as a model of production and consumption where a product should be used, leased, correctly repaired as much as possible and when it reaches the end of its operational lifespan, recycled.

This means that, not only is that product going to be used as much as possible, but once it becomes truly obsolete, it can be scrapped for parts, which can relieve some of the stress that mother nature has to face as we continue to mine its limited natural resources.

Another thing that the circular economy model tries to achieve is reducing waste to a minimum, again, by reusing, repairing and in the end, recycling a certain product.

You can read our comprehensive article about recycling and why we should all practice this more often if we want to save our planet and give future generations a cleaner future.

Linear versus circular economy

The opposite of circular economy is linear economy, which is based on exploiting natural resources, manufacturing, consuming and disposing of that product.

Linear economy in today's world is very damaging, as it requires constant mining of raw materials, some of which are getting scarcer, and it also leaves waste at the end of a product's operational lifespan.

Not only that, but making a product from prime matter as opposed recycling an old one requires more energy and materials to manufacture.

Linear economy also tends to include planned obsolescence, which means that products have a limited usability period, after which consumers are encouraged to buy a newer version of it.

Companies that use a circular economy model

As a result of resource scarcity and pressure from governments, more and more companies these days are trying to adopt circular economy to extend their products' lifespan and to recover as much material as possible for manufacturing new ones.

One such company is Apple, which constantly mentions that its products are environmentally friendly and use recycled materials.

The company even committed to removing plastic wraps around some product boxes and even replaced the traditional plastic screen protectors with paper-like ones.

Other environmentally-friendly improvements of its products include antenna lines made from upcycled bottles, 100% recycled rare-earth elements in all magnets and 100% recycled gold for the plating of the circuit boards.

At the same time, the Cupertino company plans that, by 2030, all of its products will be made with 100% clean energy.

Samsung is another tech giant that is implementing a circular economy model, by collecting used fishing nets from the ocean, which the company then uses in manufacturing its foldable devices.

Also, for 90% of the Galaxy devices launched in the past year, the company has incorporated post-consumer materials or bio-based resin and for the S22 series, Samsung uses 100% recycled paper for the product packaging.

We also learned, during an interview with Murat Büyükerk, Arctic's CEO, that the company has also adopted a circular economy model, as it implements as many recycled materials as possible into its products.

It also invested in the Ulmi plant in Romania, the first Industry 4.0 facility in the country.

Circular economy benefits

Circular economy can have multiple benefits for a company and even local communities, one of them being the improved economy.

Circularity encourages innovation and job creation and there are experts who believe that, by 2030, this model could generate an additional 4.5 trillion USD worldwide.

Leasing, repairing, refurbishing and recycling products are all part of the circular economy concept, which can ensure economic growth for all companies.

Ensuring the supply chain is another potential benefit of circular economy, as it means that a company that manufactures goods which need raw materials can source them from used products.

This is important, as fresh mining requires extra work, time and is susceptible to price volatility.

Companies who value circular economy for their products have a higher chance of establishing customer loyalty, as well.

This is because customers are becoming more aware of climate change and are taking more action to try and change it for the better.

If they know that their preferred tech or fashion brand, for example, promotes circular economy on a large scale and encourages the repair, reuse and recycle of its goods, they'll be more inclined to purchase from that company in the future and will even recommend it to friends and family.

Circular economy challenges

The truth is, although more companies might want to implement circular economy, this is no easy task, as it requires change across its entire manufacturing plan.

Additionally, it requires investments in research and development and hiring specialized personnel for recycling products or materials.

Due to the fact that some resources require more difficult recycling processes, such as lithium-ion batteries, this can prove to be even more of a challenge.

Getting the consumer to accept the change can also be challenging, as transitioning to more environmentally-friendly options can sometimes be annoying for them.

Take paper straws as an example, they are bio-degradable and even recyclable, but if you don't finish your drink quickly, they become very soft and the liquid just won't flow smoothly through them.

They are very nature friendly, but not entirely practical for this purpose, which means that companies who use them have to invest in further research for new alternatives that can provide the best compromise between the two.

It's also important for certain companies to encourage trade-in practices for their customers when they decide it's time to upgrade to a newer product.

This ensures that the product won't become waste and it can either de refurbished or recycled properly by its own maker or a specialized third party.

This can be a challenge due to the fact that trade-in policies are not equal around the world and sometimes, customers might feel like they aren't getting the value that their used product could get them.

This is why they might be inclined to sell it on the used market or keep it as a back-up.

Ultimately, circular economy is a concept which, if applied correctly, it can give companies more peace of mind when it comes to sourcing essential materials for their products, while also preventing waste from reaching the environment.

It can also help local communities, due to investments in research and development and the creation of new jobs.