How a Circular Economy Could Shape our Future for the Better

Luca R. Seehafer
Aug 9, 2017 · 3 min read

Many processes in the world surrounding us run in circles. Take the way water in the sea evaporates due to solar radiation, forms clouds and eventually falls back down to earth as rain or hail as an example. Or the way a tree’s roots absorb nutrients from the ground only to grow taller until leaves fall down in autumn and form new, nutrient-rich soil. I am sure you can think of lots of other examples adhering to the exact same principle.

Now, on the other hand, think about the journey of everyday goods in human society. Does the same principle really apply to what we consume? Or do many of the things we use rather have a linear life beginning with their mining/extraction and ending (at least for hundreds or potentially thousands of years) with their disposal on trash dumps?

In case you might not be familiar with the system behind a circular economy: It is all about loops in which resources can circulate for as on long as possible, e.g., by putting much greater emphasis on longer product lifetimes, intelligent designs, maintenance, reusing, recycling, refurbishing etc. In a way, one could think of it as the real-life version of the module kits that many of us might have played with as kids. As a circular economy tries to mimic the never-ending circular flow that occurs in nature in many different forms, one could even see the theory as a part of biomimetics/biomimicry, the field of study that tries to transfer lessons learned from nature into human science and has led to such groundbreaking discoveries as the creation of Velcro tape.

“A circular economy requires transparency and new forms of collaboration.“

While I had heard about the concept of a circular economy before, it was during a conference on Social Entrepreneurship which I attended recently, that I heard about the idea of approaching it in an open source environment (the speech was given by Lars Zimmermann from Open Source Circular Economy Days by the way, definitely worth taking a look at). It makes complete sense as a means to help spread the word and create a passionate community, just think about the ecosystems around Raspberry Pi or certain cryptocurrencies for that matter. And did making it open source help Hyperloop to get ahead - once again proving all critics who doubted its feasibility wrong – or not? “A circular economy requires transparency and new forms of collaboration“ as Lars Zimmermann put it, thus, connecting it to an open source concept seems to be quite a no-brainer.

In a time when ever more people begin to comprehend the massive problems we are – and will be - facing because of a waste management (or rather a lack thereof) that has long been too half-hearted, seeing the implementation of a circular economy would certainly be highly desirable. The same holds true for economic reasons as well. In a study published in 2015, McKinsey’s Center for Business and Environment found that private households in Germany could reduce their expenses for mobility, housing and groceries by as much as 25%. At the same time, the economy’s annual growth would be 0.3% higher.

Given the (re-)emergence of lifestyles such as minimalism and frugalism and a generation of millennials dubbed less materialistic than many generations before it, the concept of a circular economy is certainly in line with today’s zeitgeist. While being radically different from the present way of producing and using goods, in the end, a circular economy is just another (and likely more sensible) way of addressing the economic problem: satisfying unlimited human needs and wants with limited resources. The ever-growing plethora of programs and awards focused on circular economy startups is a testimony to an increased interest in this topic.

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GROWTH WITHIN: A CIRCULAR ECONOMY VISION FOR A COMPETITIVE EUROPE (Stiftungsfonds für Umweltökonomie und Nachhaltigkeit, Ellen MacArthur Foundation, McKinsey Center for Business and Environment, 2015):

https://www.mckinsey.de/circular-economy-deutschland

To learn more and to contact me, feel free to take a look at LinkedIn (/lucarseehafer), Twitter or Instagram ((at)lucarseehafer). Please feel invited to comment and share your thoughts on the topic.

🎓 Undergraduate Business Student | Passionate about Startups, Blockchain Technology and VC

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