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The barriers to the circular economy | An industrial revolution or an ongoing evolution?

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The barriers to the circular economy | An industrial revolution or an ongoing evolution?

It is often documented that regions within the UK are failing to meet government legislation in relation to recycling targets.  What is stopping most local authorities from meeting their targets, even though the will and mind set is there? Do we really need a revolution in the ways in which we work or an ongoing evolution?

Recently, Prodware and Resource Efficient Business hosted a roundtable discussion to discuss the circular economy, inevitably the discussion turned to the challenges faced when implementing a circular economy business model.

In this blog covering this roundtable event, we highlight some of the challenges that were raised.

If we have the ways to adopt the circular economy model is it the will that is lacking in business mind sets?

As businesses have invested in perfecting their production and distribution processes over many years; there is a reluctance to change, particularly if no immediate financial benefit is apparent.

Debbie Hitchen, Director, Anthesis, shared her thoughts “I think the challenge that a lot of businesses feel they are facing that in extreme circumstances, this is a new business model, if you take the circular economy to its extreme end point, that can be daunting and it can take substantial periods of time. If you’re talking about a well-established business with a revenue business model making profits, turning that around to a new model, that represents a new way of thinking.”

Is the circular economy too big a leap in the changing of business models?

Touching on timing and the concept of the circular economy being too radical for businesses to embrace; Simon Ellin, Chief Executive, The Recycling Association, highlighted his concerns “I think the system needs a tweak not a revolution. The concern I have is that the circular economy goes too far and puts to many stresses and strains on the marketplace. And also that we are not ready for it.”

“In five years’ time the world economy may be more ready for it, but for some of these more radical ideas at the moment, is the appetite and the investment actually there?”

Forbes McDougall, Head of Circular Economy, Veolia added “…I definitely agree that this is evolution not revolution. It’s very difficult to make the big leap of faith for multiple reasons. If it ain’t broke don’t fix it is a real sticking point.”

Are the public behind the circular economy enough to provide the demand that businesses need to change their business models? Should the circular economy be consumer driven or market driven?

Ultimately, businesses are not going to change their manufacturing processes, products or the services they provide if there is not the drive from the end-user to do so. Michael Challans, Saica, “…until we engage with the public and understand what they want and get them to buy into it you will be forcing something on to them.”

This may be seen as particularly relevant to the leasing models we discussed in a previous blog, the UK as a country has a different mind-set about ownership, Debbie Hitchen draws upon this, “We’ve had since the war this concept that we have the right to consume and own then dispose, but actually I think research is showing that necessarily isn’t the same outside of UK, Europe and North America..”

Simon Ellin referred to the problems one organisation faced if they alone turn to a circular based model, but others in their sector remain the same “…if we are going to achieve it there has to be that acknowledgment along the whole of the supply chain that everybody has that responsibility and I don’t see that happening at the moment I hope that whatever the EU does for the circular economy is market driven, otherwise if the market isn’t there or is not ready we might as well not bother.”

Debbie Hitchen added “…the challenge in the waste industry is volume, so it’s all about whether or not it’s economically viable, whether the commodity is good enough quality. Is there enough of it, is it commanding a good enough price in the marketplace to actually make that operate effectively?”

Looking to the future of waste and recycling, Forbes McDougall added “The whole economy has to evolve, and the timelines for this are interesting and some ambitious. Some industries are doing it so I think having a discussion where we talk about if you started from scratch, where would you begin today might be interesting – the problem is turning that into what that means for our businesses tomorrow.”

It is clear to see that whilst recycling targets are increasing, the methods businesses use in order to improve their sustainability can be varied and not without their challenges. In the next blog of this series covering the round table event, we will look at some of the ideas generated as to how we can overcome these barriers, and whether this is easier for a new business entering the market or an already established business.

Prodware – a Microsoft Gold Partner, has experience in optimising supply chain management and promoting innovation with the manufacturing and distribution industries through leading software technology.

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