During my keynote with Youth Opportunities Madagascar, I received a bunch of fantastic questions from the participants which I thought would be great to share with a larger audience.
One of those questions was: What is the difference between consumers and users in the circular economy?
I love this question because it begs us to think as well about how our customers will engage with brands and producers in the future.
As a reminder, the circular economy is a way of working and living where resources and products have an optimal life cycle, where (close to) no waste has been generated.
This requires a complete shift in approaching today’s growing waste problem, which is to not only find solutions for closing the loop but how do we design products in such a way that the problem doesn’t occur in the first place.
For example, figuring out how to recycle a pair of headphones is intently time - money - energy - water-consuming, because no thought has been given during the design stage to how the end-of-life of a product would look like.
In a circular economy, we design products to be easily dismantled at the end of their life cycle, allowing the producer to recuperate up to 95% of the materials, refurbishing them and reintroducing them into the supply chain.
Why is this interesting?
Because resources are becoming more scarce (or so they have us believe), and therefore prices will surge or at the very least become unstable. Companies, therefore, benefit from taking care of the resources they have acquired and keeping them in the loop for as long as possible.
Not only will they become more profitable over time, but it most likely will also make them more efficient in other aspects of their business.
Waste is a sign of inefficiency. You are either losing money or you’re losing resources.
A report by the Ellen MacArthur Foundation in partnership with McKinsey estimates that the opportunity for the circular economy is around 63 billion USD, 1/3 of this opportunity lies in the automobile industry.
When it comes to figuring out how the circular economy functions, we distinguish two cycles: a biological and a technical cycle.
The biological cycle is pretty straightforward, as it follows the laws of nature. Food, pure cotton, silk, hemp fabric, and other 100% organic (as in “alive”) and biodegradable resources and products fall under this cycle.
Here little intervention from us, humans, is needed as other organisms take care of the decomposition process. Sure, we may want to speed it up through industrial composting, because the amount of food waste is enormous but still less than in the technical cycle.
The technical cycle shows how a circular model applies to everything else we have manufactured. Since we humans have created synthetic, non-biodegradable materials, we are also responsible for disposing of them.
Nothing in nature is linear except the way we think and work.
This is where recycling, refurbishing, reusing, down cycle, upcycling, and other methods are needed.
If we look at the graph, we see that there’s a distinction between consumers and users.
In a biological cycle, as customers we CONSUME the resources and products, meaning that the end product differs from the original one after our interaction with it. Think: full apple > eaten apple.
In a technical cycle, the circular economy suggests that we merely become USERS of products. Because besides a dent, a scratch, or signs of usage, the products don’t differ much before and after usage.
The idea here is that customers/ users will have to become comfortable with not owning as many products as we currently do. In a circular economy, I don’t own my phone, I don’t own my computer, and I don’t own my washing machine. I rent them from brands.
Because the manufacturer wants to keep its resources, they are merely renting out the products to us. This means that instead of paying for an upfront price, we will be paying monthly installments or pay per usage.
I can see the use of blockchain and web 3 is a huge part of this too.
For example, Philipps [Lighting] from The Netherlands has been testing out this business model with their office lamps.
Their clients don’t pay the full price for the light installation but they pay per kilowatt of usage. What I like about this model is that the customers share responsibility for the product and resources but also become more aware of their consumption.
As I often say during my keynotes, a circular economy or a greener future at the very least requires as much involvement from customers as the manufacturers and the brands. And needless to say that government regulations are a major pillar of this discussion as well, but that’s a discussion for another time.
Interested to hear more?
One of the things I love to do most is share my views on the future. I may be an environmentalist, but I don’t entertain a doom-like vision of the future. In my eyes, the future is bright and full of opportunities, for those who are crazy enough to believe it, and for those who are smart enough to see it.
> Invite me for a keynote here: Environmentalist | Alizée CCM (alizee-ccm.com)