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Think circular. Business models for a better tomorrow

*** written by Svenja Bickert-Appleby ***

The famous psychologist and communications theorist Paul Watzlawick wrote that “one cannot not communicate”. Likewise, design cannot avoid impacting its subject. As service designers, we work with clients on new products, services and business models that are designed to have an impact.

We may increase sales by streamlining a purchase process. We may increase user adoption, or we may increase profits by innovating a business model. Whatever it is, we’re always aiming to impact people, their lives, the decisions they make, and how they behave.

It’s our job as service designers to be entrepreneurs. We look at a problem as an outsider and re-imagine how a business process could work. It’s in this role that we have an opportunity to move our clients from their traditional business models towards what I call ‘business models for a better tomorrow’. This is a chance to apply our design and business skills to help businesses increase their profits with solutions which benefit both the company and society. This is how we can design a ‘better tomorrow’.

The Circular Economy is central to this effort. It stands for a new way of thinking about how we buy, use and discard products. “A circular economy is one that is restorative and regenerative by design, and which aims to keep products, components and mate- rials at their highest utility and value at all times, distinguishing between technical and biological cycles”, the Ellen MacArthur Foundation defines. In a linear economy, the output of a process may be discarded as waste. In a circular economy, the outputs of one process are designed to be the inputs of another. Materials are circulated as long as possible through the use of recycling, remanufacture, reuse, and redistribution. Existing services like leasing and sharing can often be incorporated to avoid creating waste.

Advocates see a general shift from a linear economy to a circular one. This shift requires innovative business models that replace or modify existing ones. While business modelling plays a major role, we should remember that the product itself needs to be deeply thought through. Materials, manufacturing, production, transport and further processing must be compatible and ready for re-circulation and materials must be fairly and sustainably sourced. It is here where the concept of Circular Economy and Cradle-to-cradle thinking complement each other.

While this comes with a lot of rethinking, it holds opportunities for innovation and competitive advantages in a world where resource scarcity is increasing.

According to John Thackara, “eighty percent of the environmental impact of the products, services, and infrastructures around us is determined at the design stage”. Thus, we as service designers could play a leading role in pushing for a (more) circular economy.

Circular Economy thinking is widely applicable across industries such as textiles and fashion with pioneers such as Ina Budde, industrial cleaning products from Werner & Merz, and even to sectors such as finance.

Consider the concept of RePack designed by Plan B From Outer Space Oy, a Finnish company. RePack’s mission is to create reusable packaging in order to reduce waste. Customers can choose RePack packaging when ordering from online stores. Once the goods wrapped in RePack have reached their customer, the packaging can be flattened and sent back for reuse. Customers receive a voucher for their next purchase as a thank you, the retailer reduces its packaging costs, and the world receives a little less waste.

The concept of the environmentally responsible flooring manufacturer Dessoin the Netherlands is much more complex. Desso was an early pioneer of Cradle-to-cradle thinking. They continue to innovate by integrating Circular Economy principles such as take-back programmes and products with recyclable yarn. They have found uses for old fishing nets found in the sea, and 20,000 tonnes of chalk from local water companies. They even use 100% renewable electricity (hydropower) in their production locations.

Desso’s CEO Stef Kranendijk’s keys were to re-think the company‘s business model and to transition from a traditional sales approach to a service approach. Instead of selling products, Desso leases them. This arrangement brings materials like floor tiles back to the company where the components can be reused. Desso saves the environment while also saving itself from purchasing some raw materials for its next generation of products.

Desso and RePack show us the potential for circular thinking in service design. We can go far beyond improving a client’s efficiency and profitability. We can fundamentally alter how people think about business. We can move from a linear input-to-output to a circular input-to-input economy. This isn’t just good for the environment, it’s good business.

Not every project offers the chance to redesign a company’s entire business model, but engaging with circular concepts and learning about them will affect your work as a designer and benefit you and your clients. It’s also clear that circular thinking should be part of formal (service) design education at universities.

Business clients might better understand Circular Economy as a business or ‘circular advantage’. However, it’s our job as (service) designers to design a better future. One cannot not design, so design as best you can.

What can you do? where can you learn about circular economy?

The Ellen MacArthur Foundation hosts an extensive collection of material and literature online. You can also visit events such as the Ecobuild / resource London in March 2017 7, meet your local Circular Economy group (there are several on meetup.com), join the Open Source Circular Economy days or take an online class such as the eDX course of the TU Delft.