As the world undergoes considerable change, with resources becoming increasingly scarce and consumer expectations shifting, the stage has been set for the concept of circular economy. The question then becomes, how can companies best identify opportunities provided by this concept?
Megatrends, such as climate change and overuse of natural resources, are challenging our current business models. Over the next 20 years, the world will need 32% more energy, 57% more steel and 139% more clean water than in the last 20 years. The world’s population already consumes over 1.5 times the natural resources that the world can provide. At our current pace, we will require three to four Earths by 2050. This equation simply does not work.
The circular economy seeks to decouple economic growth from the use of virgin natural resources to generate more economic value with fewer natural resources. Materials taken into use will keep circulating, instead of ending up in a landfill or in an incinerator. Circulation will therefore maintain or even increase the value of these materials.
The European Commission has placed high expectations on the circular economy in terms of new jobs, economic growth, and improved competitiveness and self-sufficiency within Europe. The Commission published its ambitious Circular Economy Package in December 2015 and is currently preparing the related regulations. According to a McKinsey study, Growth Within, the circular economy will generate a net economic benefit of up to EUR 1.8 trillion for the EU by 2030. Meanwhile, Britain’s Waste and Resources Action Programme (WRAP) estimates that the transfer to a circular economy will bring as many as 250,000–520,000 new jobs to Europe. These jobs will be created in the fields of material circulation and collection, and repair and maintenance.
- Director, Resource-wise and carbon-neutral society, at Sitra
- Has been leading the ecological sustainability theme area at Finnish innovation fund Sitra since 2013.
- Earlier, she served as director of the Finnish government’s Cleantech Strategy Programme and Finland’s Cleantech Cluster, and held the post of Manager of Environmental Affairs at UPM.
- Has a PhD and holds the status of docent at Lappeenranta University of Technology and the University of Helsinki, and has also served on the boards of several cleantech companies.