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NEXT: The Future of Consumption is Circular

David Staley David Staley NEXT: The Future of Consumption is Circular
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On August 18, the Columbus Futurists monthly forum will be held at Launch Labs (2649 North High Street) at 6:30 PM, where we will explore possible futures of the “circular economy,” including role playing scenarios of life in a circular economy. Please join us!

In nature, there is no such thing as “waste.” After it has served its function, anything generated by natural processes can be food for something else in nature. Nature functions as a complex feedback loop, in comparison to the industrial economy which is “linear.” This means that many of the products of industrial society end up as waste since it is not reabsorbed or otherwise used as “food” in some other part of the economy. The linear model is often defined as take-make-dispose: take (from nature) make (into some commodity) and dispose (where that commodity sits idle, inert and potentially harmful after it is discarded, and it cannot be reintegrated back into the economy).

There are early indications that the world’s industrial economy is transforming into a “circular economy.” This is an economy that mimics nature, an economy that is cyclical, driven by feedback, where that which might be considered industrial waste is treated as “food” for some other part of the system. A circular economy is defined by the Ellen MacArthur Foundation as an industrial system that is restorative or regenerative by intention and design. It replaces the ‘end-of-life’ concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse, and aims for the elimination of waste through the superior design of materials, products, systems, and, within this, business models.

The idea of a circular economy dates back to the early 1970s, and some designers have been talking up the idea since, the notion of “cradle to cradle” design made especially popular after the publication of the 2002 Hannover Principles. But now the idea of growing a circular economy has drawn the attention of management consulting firms such as McKinsey and Accenture. This signals to me that the practice of a circular economy might accelerate in the coming decade, since these consulting firms exert a Svengali-like influence on the decisions made by corporations. McKinsey and Accenture are arguing that, aside from being good for the environment, circular economy principles make good business sense. With that incentive dangling in front of them, corporations might turn to practices that will produce a circular economy.

In a circular economy, companies exclusively use materials that are fully renewable, in that they can either be recycled or otherwise used as input for some other manufacturing process once the product is no longer in use. The “circular supply-chain” does not end in a landfill, but with products that can be broken down and re-used in some other product. In this way, the outputs of consumer capitalism become the inputs for the next generation of products.

Some companies are practicing “product life extension.” This involves repairing or otherwise upgrading a product a consumer has already purchased. Patagonia sportswear, for example, has partnered with iFixit to allow customers to repair damaged clothing. Rather than producing a new item, Patagonia can make money through this service. In a circular economy, companies are incentivized to turn their businesses from one that “makes a product” into one that “services a product.”

According to one estimate, 80% of the things in our homes are used only once a month. Rather than sitting idly, those things might be productively used by others. This, of course, is the idea behind Uber, Airbnb and other companies in the sharing economy. There is reason to suspect that such sharing of things will expand to include many objects in the home, such as vacuum cleaners and other such appliances. In such a system, fewer resources are used to manufacture objects that are infrequently used: the business model in this case is to rent out or share the thing rather than produce or consume yet another thing.

Young drivers are already flocking to CarToGo and other such sharing services. Indeed, we are seeing a change in consumer behavior whereby consumers purchase a service rather than purchase a thing. Some companies are beginning to realize that they can make money selling access to a service, while retaining ownership of the thing.

The Internet of Things scenario means that more and more things will be produced with information embedded within it. One implication is that more of the physical things of the consumer economy will be transparent to us. We’ll be able to know more about the things we consume, its history, if you will: how it was made, what it was in a previous version, how it might be transformed into something else when no longer in use. With the story of the object so transparent, it will be the more easily traceable, making it easier for producers and consumers to keep track of the life-cycle of the object.

The circular economy means producing fewer things, making what is produced recyclable, as an input for the next manufacturing process, and changing what is meant by consumption.

David Staley is president of Columbus Futurists and a professor of history and design at The Ohio State University.  

The next Columbus Futurists monthly forum will be Thursday August 18 at 6:30 PM at Launch Lab.  Our topic for the evening will be “The Future of the Circular Economy.”

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