ANALYSIS: Circular and sharing, when two become one?
26 November 2013, source edie newsroom
A circular economy. Or a sharing economy. Which would you put your money on? The first would claim to have more gravitas as it involves a seismic shift in not only how business works, but how resources are utilised. It is also potentially worth big bucks to corporations - hundreds of billions within the EU alone, according to the Ellen MacArthur Foundation. Some would also argue that a true sharing economy could not exist unless a circular economy was already in place.
Why is this? Well, the tail end of a circular economy largely replaces the concept of a consumer with that of a user, meaning that the relationship between a business and its customer will evolve whereby product performance effectively outweighs everything else. This not only calls for greater product durability, but new leasing and sharing service models.
Meanwhile, the concept of consumer as user lies at the heart of a sharing economy. Here we buy into lifestyles rather than consumption, accessing goods and services whenever we need them for a defined period of time, with ownership retained by the product manufacturer or service provider.
Recent research from Zipcar claims that Brits could save £12.4bn a year under a pay-as-you-live type scenario - not quite as lucrative as Ellen MacArthur Foundation figures suggest, but certainly not to be sniffed at.
It should already be apparent if you have read this far down that both economy concepts could potentially complement each other quite nicely.
However - and this is where it gets interesting - the sharing economy is much more consumer-facing in its philosophy, it is marketing itself as both affordable and convenient to a new breed of citizen; one that wants to unshackle themselves from the chains of ownership and access a more liberating lifestyle.
It is these types of values that consumers can immediately relate to and find appealing, and that is crucial. If either economy is going to function, it needs to bring society with it. The beauty of a sharing economy is that it taps into our obsession for convenience, money and personal freedom - all at the same time. It is underpinned by a strong environmental message, but it doesn't need to shout about it. This makes it even more attractive to your average Joe.
A circular economy meanwhile comes with a lot of complex systems thinking that needs to be unravelled and mapped out. It's highly utopian, but also highly embryonic, and no one yet quite understands how the finer detail might work. It hasn't yet got past the business brainstorming stage. But some promising progress is being made and perhaps for now, all it needs is to continue down this path. For if a sharing economy takes off more than likely it is going to need to bring its circular cousin with it.
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