In the linear economy, success has historically been based on a clear relationship between growth and resource use. The more we produce, the more resources are consumed, which often generates greater climate impact and more waste. This dependency is called impact coupling.
The circular economy challenges this relationship by striving for impact decoupling, i.e. increasing value creation without increasing negative environmental consequences. Here a fundamentally new relationship arises between business logic and design logic.
Circular economy as systems thinking
The circular economy is based on three basic principles:
- products should be used over and over again without losing value,
- waste should be designed out of the idea stage,
- business models should support regenerative systems.
This means that it is not enough to recycle or reduce impact; it is necessary to create a system where both economy and ecology are built up simultaneously.
These principles require that the business logic, i.e. how the company makes money, and the design logic, how products and services are shaped, interact fundamentally. It is no longer possible to first create something, and then try to “make it sustainable”. Sustainability must be included from the beginning and permeate the entire process.
Linear economy: a gap between business and design
In a linear economy, design is often subordinate to the business. The focus is on producing something that sells, is cheap to manufacture and can be delivered quickly. When the business logic is directed towards constantly increasing sales, there is little incentive to extend the life of products or make them easy to reuse. Waste and environmental impact are treated as externalities rather than core issues.
This means that the design logic often becomes reactive. People try to reduce waste or use more recycled materials, but the core of how the business works remains the same. The result is a gap between the ambition to be sustainable and the actual business operations.
Circular economy: business and design as co-creators
In the circular economy, business and design merge. The fact that products can be reused over and over again, that waste is not generated and that systems are regenerative requires that the entire product life cycle be considered in both business strategy and design. This means that impact decoupling is not an add-on, it is a necessary basic structure.
Take, for example, a manufacturer of office furniture. In a linear model, they sell as many chairs as possible. In a circular model, the same company can instead rent out the furniture, design it for easy disassembly, maintenance and reassembly, and take responsibility for the materials going back into production. The business is then not based on selling more units, but on keeping the materials in motion and creating value through service and a long lifespan.
This requires a design that is modularized, easy to repair and built from materials that retain quality over time. The design logic is therefore directly linked to how the company makes its money. If the design fails, the business model falls apart.
Creating regenerative systems
Impact decoupling is not just about doing less harm, but about creating positive effects. A regenerative system does not just build off environmental impact, it builds value for nature, society and the economy.
For example, an agricultural company working with regenerative agriculture can increase soil fertility, sequester carbon and at the same time produce high-quality food. This can become a long-term sustainable business, but only if the business logic supports investments in soil health, long-term contracts and incentives for quality rather than quantity. Here, the design logic is not physical product design, but rather system design, i.e. how the business is designed and interacts with biological cycles.
What does this mean for businesses?
For entrepreneurs, this means that business strategy and design decisions can no longer be separated. It is not just about selling more units, but about creating value over time through material circulation, customer relationships and system responsibility. This requires asking new questions already in the idea phase.
How can our product live multiple lives? How do we avoid creating waste in the first place? What responsibility do we take to ensure that our value proposition also strengthens the environment, society and the economy in the long term?
Companies working with the sharing economy, rental, remanufacturing or products as a service have already started to answer these questions. But traditional companies can also make the transition. One example is workwear manufacturers who design their garments to handle multiple users, with interchangeable parts and service agreements. Instead of selling clothes, they sell function over time.
Why the connection is stronger in the circular economy
In a circular economy, the business model depends on the design’s ability to support reuse, repair and resource circulation. If the product is not designed to last a long time or be recycled effectively, the business model fails. In the linear economy, design flaws can be compensated for with increased sales. In the circular economy, they cannot.
This strengthens the bond between business logic and design logic. Design is no longer just an expression of aesthetics or function, but a supporting pillar in how the business works. Therefore, companies must see design as a strategic core competency from the start.
The way forward
Successful with impact decoupling is not about reducing impact afterwards, but decoupling growth from negative environmental impact through system change. For companies, this requires that the business is built around value creation that does not strain resources, and that the design is designed to enable just this.
The circular economy requires not only better solutions, but new ways of thinking. When business and design work together from the start, companies can not only reduce their impact. They can become engines in building an economic system that benefits both the planet and people.
