We live an era of different economies: bioeconomy, platform economy, digital economy – and circular economy. Are these only fads or the new reality that will change the way we consume and live our lives?
The circular economy is not a new phenomenon. Throughout history, it has been the way of acting and managing in times of scarcity. Our grandparents and great grandparents lived sparingly and put everything to good use down to the very last thread. People still do this in the developing countries and under severe or exceptional circumstances, such as during war.
The circular economy has become a topical issue again, since the increasingly limited global raw materials, food, and water and energy resources are not sufficient to cover the needs of the still growing population. We must learn to think differently about ownership and consumption.
Technology accelerates the circular economy and business activities
In addition to being a necessity, the circular economy is a great opportunity to create sustainable demand and, consequently, new kind of business activities. Once a product has reached the end of its life cycle, technology makes it possible to recover its raw materials and components, and use them for new purposes. Nothing goes to waste.
Efficient use of resources calls for new operators, distribution networks and systems to make sure that the right shipments are in the right place at the right time. In the textile industry, there are good examples of how used clothes can be recycled into secondary textile fibres for the needs of clothing and technical textile industries. For example, the awarded Ioncell-FTM method, for which VTT developed a pretreatment technique for cotton waste, dissolves cotton waste for reuse without any toxic agents. 3D printing, on the other hand, allows resource-wise use of materials in the manufacturing industry and, best of all, recycling of recovered materials. All this, however, requires that people everywhere in the business environment adopt new ways of thinking.
Current modes of operation will not bring success
Research and development play the key role in ensuring that the circular economy functions efficiently. We need radical innovations that promote resource-wise and sustainable economic growth.
The circular economy is not only a way of thinking, but it is also a business activity that creates value, jobs and tax revenues. We need good ideas, broad-mindedness and bold trials to transform the ideas into business activities. How to minimise the amount of waste and reuse the remaining waste? What used to be regarded as the final point of the process, can nowadays generate new business, of which the side streams from food production serve as a good example. These include the manufacturing method patented by VTT, where the berry press residues from juice processing industry are used as an ingredient for augmenting the fibre content in muffins. Innovations like these are not generated from nothing, but they need to be founded on research and developed further to succeed.
Feathers to the catwalk
Innovations do not happen either if there are no individuals who dare to think big or in novel ways. A good example of this are feathers – a small, light material lending itself to many purposes. After having provided warmth and protection for their owner, feathers can be transformed into protein-rich animal feed or used in packaging materials.
We are familiar with feather-filled pillows, but how could, say, the textile industry make better use of feathers as raw material. When will we see feathers on the catwalks at fashion shows?
Growth for Finland from circular economy
What lies at the core of the circular economy are services: buying and owning are transforming into lending and shared use. This has been the reality in, for example, the housing market for a long time, and now similar way of thinking is also expanding from tools (see the pilot project Liiteri) to vehicles.
Services already account for more than two thirds of the value of Finland’s gross domestic product. When the opportunities offered by the circular economy are understood everywhere in society, this share will grow even more – and the burden on the environment will reduce.
New services will boost growth and employment in Finland. On one hand, digitalisation replaces jobs, but, on the other hand, its use in the circular economy will provide growth opportunities for enterprises: the whole manufacturing and product life cycle needs new solutions that the Internet of Things applications can offer.
Finland is well equipped to become a pioneer in the circular economy. The key issue is the boldness to think things anew. Do I really need a car of my own? Are there any real obstacles for renting a car whenever I need one? We must call our conventional ways of thinking into question.
The way of thinking and acting the former generations used to practice will transform into business activity that helps to build the welfare society. Finland has a highly-educated population, plenty of natural resources, and R&D activity, so this small country can develop global solutions that really save resources and enhance well-being.
Executive Vice President, Strategic Research