The birth of circular manufacturing

According to Rob van den Heuvel, Senior Vice President Global Asset Management at DLL Group, a global provider of asset-based finance, some manufacturers feared that second or third life product streams would cannibalise their regular, new product lines. However, DLL research suggests this is not the case. They tend to provide goods for a different set of customers.

And the business case for the circular model is going global. Having gained ground in Europe, the interest in circular economics is now spreading across the world, including even the United States. One reporter captured the mood: “Laptops made of plastic from old laptops. Aluminium car body parts made from old cars. Chemicals leased out, recovered, and leased again.”

As Ken Webster, Head of Innovation for the Ellen MacArthur Foundation, writes in his new book, The Circular Economy: A Wealth of Flows, the old “smash and grab” model simply doesn’t work when the “easy surplus” of resources has gone. Indeed, according to a recent report from the Club of Rome, we’d need four planets to sustain everyone with the same standard of living as those in the US.

It is not surprising, therefore, that the World Economic Forum, which brings the world’s leading thinkers, scientists, innovators, politicians and business people together to discuss the big issues we face, has put the circular economy on its agenda. At the Annual New Champions summit in Dalian in China last September, the World Economic Forum’s Project MainStream continued to discuss key ways to drive the circular economy forward, including the use of new tracking technology to enable manufacturers to monitor and manage the materials and goods for future life cycles.

In London recently, experts in electronics and textiles met to discuss the implications of the Internet of Things for asset tracking. The participants advocated the use of RFIDs (Radio Frequency Identification) “as a way of capturing and passing on information throughout a product’s life”, capturing information for the next stages of reuse and recycling.

This kind of innovation goes to the heart of what it means to be human: generating wealth and success but in the context of respect for the planet, supporting its survival for future generations.