Necessary opportunities in a circular economy

Although circular economics as a concept has been around for 40 years, it is only now in recent years that it is becoming widely known, although there is some confusion about what it really means. Basically, it is about working with business models where the value of, for example, end-of-life products and gaming energy is used to create new value. However, there is no doubt that this is an area of progress and the European Commission is in the process of issuing new laws in line with their new strategy. This year, it was also a hot topic of debate in Almedalen.

To consider only circular economy as a necessary change of direction to achieve the global environmental goals is a limited perspective. A broader perspective is to explore the opportunities that this brings. Circular economy has given rise to brand new business models, something like the one that listened to the Swedish Radio's program series 'Sphere' in the midsummer week could learn more about.

But it doesn't just have to be about redefining their business model from the ground up. Many companies use the philosophy to make their existing business models more circular. This can be about returning energy and materials to the production flow, which means not only environmental benefits but also potential economic benefits. The term 'remanufacturing', or remanufacturing, is something that AB Volvo has embraced. The trend to move from owning to renting is also becoming more prominent, ie the supplier owns the product and is thus responsible for it throughout the life cycle. Here stays 'Internet of Things' a unique opportunity for companies to keep track of their products and measure how they are used and worn.

Circularity can feel concrete and obvious in the case of manufacturing companies, while service companies scratch their heads and wonder how circular economics can be applied to them. However, you must not be limited by what you produce / deliver. Materials and energy are also used in organizations that are more characterized by service activities. Among other things, one only appreciates Sahlgrenska university hospital in Gothenburg discard 225 tons of furniture - every year!

But changing one's business model is a recognized difficult thing. That is why research projects are ongoing, including in the strategic innovation program 'Produktion2030' that Ekan Management participates in, to develop methods that will make it easier for organizations to develop their business models.

So if you've been stuck in the middle of a change journey or barely started to think in terms of circular business models, it can feel safe to know that there is a lot of experience in the field and the help does not have to be longer than one email away.