There has been much talk about the circular economy for many years, without it resulting in any major changes. Yet, that is. Because momentum has been gaining in recent years and transformation could be just around the corner. But in order to derive own benefits, we will all need to be prepared.
The concept of circularity is actually ancient. It is all about making use of what you have and making sure it lasts a long time. It also involves conservation and recycling, even when something is so worn out or broken that it can no longer be used for its original purpose. The first time that all of this was defined as circular material and energy flows was in the 1960s and since then, the theories have slowly and steadily been further developed and refined.
As for putting them into practice however, not much has changed. Yet, that is.
-“I’d say that the concept of a circular economy became generally known in Europe around 2010,” says Marcus Linder, Head of Sustainable Business at RISE.
– “But up until around four years ago, it was regarded as somewhat odd. Things changed, however, in 2020 when the European Commission adopted a new Circular Economy Action Plan and in 2021, the Swedish Government set up a delegation of experts on the Circular Economy. This is when many decision-makers really started to understand the problem,” he says.
That, it turn, has yielded results. Over the last two or three years, things have started to happen for real in the Swedish market. A prime example is the ambitious, circular tendering processes that both private companies like AB Volvo and public sector organizations like Region Skåne and the City of Gothenburg are now using.
– “Many major players have started setting extremely ambitious goals for achieving circularity,” says Marcus Linder.
– “We are right at the starting gate now. There is a ton of activity going on right now with circularity and the potential is huge! Digital transformation is also facilitating direct contact with consumers and enabling companies to transition from products to services,” he says.
Change is needed
All of this requires change. And it is not just products that need to be changed, but also business models.
– “Nearly all companies have been designed to quickly sell a product, get it out the door and then sell the next one. Transitioning to a model where you earn money from products over a long period of time is challenging, to say the least. And not everyone will succeed,” he says.
Marcus Linder compares it to the IT bubble around the turn of the millennium.
– “This is when many started to realizing the potential of the digital transformation. But not everyone has been successful in achieving it. All that hype inflated the stock prices for a lot of companies, which later turned out to not be such good deals after all,” he says.
We're on the bend just before that happens
At the beginning of the curve
Many technological and economic changes require a great deal of time during the start-up phase. But then, during the implementation phase, there is an explosion of activity and everything seems to happen at once. Is that where we are now, with the transition to a circular economy?
– “Of course, it is extremely difficult to predict the future. My gut feeling though, is that we are right on the verge of having things really take off. The popularity of the circular economy has definitely increased over the last few years, but in terms of fast-growing new business, my assessment is that we’re not quite yet on the exponential part of the curve. I’d say we're on the bend just before that happens,” he says.
RISE can offer support
RISE can offer various types of support for helping companies implement their ideas and achieve real change. And not just with training and inspiration, but also many of the practical aspects.
– “We frequently collaborate with both the public and private sectors and our goal is always working together to develop an offer that can reach the pilot stage and be tested for real. Typically, you will also need to involve customers and suppliers in those tests, since nobody acts as a single stakeholder in anything. That’s why it’s good to get help from us, as a neutral party that can facilitate honest, open dialogue,” he says.