We often talk about sustainability in big words such as climate goals, fossil-free transport, reduced consumption. But when it comes to economic models, it is easy to get lost in technical terms.
So let’s keep it simple, especially from a consumer perspective.
Three economies that are three ways of managing resources
- The linear economy is the model we know best. We buy, use and throw away. The result? Lots of waste and consumed resources.
- The recycling economy is a step in the right direction. Here, the material in the product is recycled, which reduces the amount of waste, but only to a certain extent.
- The circular economy takes it a step further. Here, products are designed to be reused, shared, repaired and circulated, creating minimal waste.
From a consumer perspective, the difference is clear: less waste = better. But from a company’s perspective, it becomes more complex.
When waste becomes a business model
The linear economy has a simple logic: the more we produce and sell, the more we earn. It is a business model built on volume, not sustainability. Waste is a side effect, but the money rolls in.
In the circular economy, things look different. Here, a product is sold once and then used over and over again. Shared, repaired, reused. As an entrepreneur, it is easy to feel: How are we going to make money?
The answer lies in our mindset and our business model.
From sales to function
Imagine that you run a sharing platform. Every time someone uses a product through your service, you get paid. Then it suddenly feels strange to have to manufacture a new product every time something is sold. Why start a factory for each product when so many products already exist?
It is precisely this shift that the circular economy entails: from selling products to offering function, access and service. It requires new thinking, but also opens up long-term, more stable revenue models.
Recycling, an intermediate step, not the goal
Many talk about recycling as the solution. But in practice, the recycling economy is still similar to the linear model. We produce, sell, use, and then we recycle the material. But all other resources are lost in the processes: energy, finish, packaging, transport, machinery, everything except the material is used up, over and over again.
So it is an improved version of throw-away, but not a transformative change. It is better, but unfortunately not enough.
The difficult is necessary
Shifting to a circular economy is challenging. It requires us to review our business model, perhaps even our business idea. It may feel uncertain and complicated, but that is not an excuse not to.
Because it is precisely by reimagining our companies and systems that we build a more resilient future. It is by abandoning the idea that “new is always better” that we create an economy in balance with the planet.
The future is circular and smart
The circular economy is not about selling less. It is about selling smarter. About thinking about value over time, not just at the time of purchase. It is not a step backwards, but a step forward, into an economy where sustainability is built into the business, not a side project.
So let us also as entrepreneurs and leaders let go of linear convenience and see the opportunities in the circular. Not because we have to – but because it is more profitable, wiser and future-proof.
