Circular economy of textiles – Easy, and yet so difficult

The apparel industry has experienced radical transformations throughout the years. Thirty years ago trends and consumer demand were forecast long before consumers purchased the garments, and the production was planned and sized accordingly [1]. In the late 1980s, the industry developed a global infrastructure that emphasized quick response to consumer demand through reduced lead times and low costs. Fast fashion was born.

During the last 20 years, the price of clothing has fallen and the number of imported pieces of clothing has increased. In the US, apparel prices were on average 10% lower in 2005 than in 1998 [4]. Globally since the year 2000, the amount of clothing sold has doubled, and the number of times a garment is worn has decreased by 36% [5]. From 1975, the global production of textile fibers has increased by a staggering 280%. This is a 4-fold increase. The raw materials, such as cotton, are becoming scarce or unsustainable to produce.

We live in an era of ‘excessive accumulation’ of clothing [4]. As the closet space is finite, some of that excess has to be discarded. In Finland, people and organizations discard approximately 72 million kilograms of textile waste annually. This is 13 kg per citizen [2].

There is a problem to be solved. The solution is a circular economy of textiles.

graafi_tekstile

Circular economy model of textiles [2].

In the Relooping Fashion project, a model was conceptualized based on the operations that a circular business ecosystem for textiles would include. The inner circle is about reviving old apparel maintenance skills and practices: repairing and reusing clothes and textiles. However, it is unclear if this truly decreases the consumption of virgin clothing and textiles.

If reuse of clothing is not possible, its material can be reused

The outer circles of the model include all the industrial processes and logistics required to recycle textile materials, either chemically or mechanically, to textile yarn, fabric and again to clothes. The overall goal is to maintain the value of materials as high as possible, with minimum environmental impact. VTT has innovated new processes through which textiles can be produced from wood or discarded cotton clothing.

As the circular textile economy model suggests, the way forward is, in theory, relatively straight. We know what the elements are. We have to create value from waste, emphasize functionality over ownership, and create sufficiency-based resource use [2].

Are these shifts already happening? Yes they are.

VTT is coordinating the Telaketju project, which aims to create a comprehensive collection, sorting and refining system for end-of-life textiles in Finland. There is considerable drive and enthusiasm in the group. Similar circular economy initiatives are being set up in most countries.

Is the shift happening fast and profoundly enough?

Is it possible to create a circular economy within the current linear economy? These are much more complicated questions.

The world has streamlined its linear production systems for decades. These processes rely on virgin raw materials. This is why it is important to intensively develop technologies to utilize recycled materials. However, technologies as such are not enough. Reorganization should happen at mental, structural and economic levels.

One of the main challenges is that value is not evenly divided in the current value chains, as discussed in [2]. Farmers and manufacturers bear the environmental and social costs in the form of toxic chemicals, inhuman working conditions, and lack of water, while the brand owners and consumers reap the profits and cheap garments.

Consumer demand is the momentum for change

The current idea is that consumers should start demanding that fashion brands take responsibility, and of course they should. Alongside consumer demand, there is also a large number of political and legislative tools, such as raising recycling targets, stringent waste legislation, labeling schemes on products, rules for public procurement and so on, which can be used to turn the ship.

However, all the above are partial solutions emerging from the current state of affairs. I believe that there should be a mechanism throughout the economy that would favor circularity over linear throughput. This in-bedded mechanism would drive the circular economy in the right direction. This is the place where we need profound innovation, as there are no working solutions yet.

Nonetheless, we have a firm intention, which is the first step of any transformation. The actions will follow.

 

paunonen
Sara Paunonen
Senior Scientist
sara.paunonen(a)vtt.fi

 

Literature:
[1] Bhardwaj, V. & Fairhurst, A., 2010, Fast fashion: response to changes in the fashion industry. The International Review of Retail, Distribution and Consumer Research, 20(1).
[2] Fontell and Heikkilä, 2017, Model for Circular Business Ecosystem for Textiles, VTT Technology 313.
[3] Statista, https://www.statista.com/statistics/263154/worldwide-production-volume-of-textile-fibers-since-1975/
[4] Schor, J.B, 2005, Prices and quantities: Unsustainable consumption and the global economy, Ecological Economics, 55(3), 309-320.
[5] Ellen MacArthur Foundation, 2017, A New Textiles Economy: Redesigning Fashion’s Future, pp, 150.

Tekstiilien kiertotalous – Helppoa vai vaikeaa?

Tekstiiliteollisuus muuttunut paljon vuosikymmenien varrella. Kolmekymmentä vuotta sitten tuotannonsuunnittelu ja mitoitus perustui trendeihin ja kulutuskysyntään, jotka ennakoitiin kauan ennen kuin kuluttajat lopulta ostivat vaatteita [1]. 1980-luvun lopulla teollisuus kehitti maailmanlaajuisen infrastruktuurin, jolla tavoiteltiin nopeaa reagointia kuluttajien kysyntään lyhyiden toimitusaikojen ja alhaisten kustannusten kautta. Pikamuoti (fast fashion) syntyi.

Viimeisten 20 vuoden aikana vaatteiden hinta on laskenut ja tuontivaatteiden määrä lisääntynyt. Yhdysvalloissa vaatteiden hinnat olivat vuonna 2005 keskimäärin 10 prosenttia pienemmät kuin vuonna 1998 [4]. Maailmanlaajuisesti vuodesta 2000 lähtien myytyjen vaatteiden määrä on kaksinkertaistunut, ja vaatteen käyttökertojen määrä on vähentynyt 36 prosenttia [5]. Vuodesta 1975 tekstiilikuitujen maailmanlaajuinen tuotanto on kasvanut huikealla 280 prosentilla. Lisäys on nelinkertainen. Samalla luonnonkuitujen, kuten puuvillan, tuotanto ei enää riitä täyttämään kysyntää.

Elämme vaatteiden “liiallisen kertymisen” aikakautta [4]. Kun kerran kaappitila on äärellinen, osa ylimäärästä on hävitettävä. Suomessa ihmiset ja organisaatiot tuottavat noin 72 miljoonaa kiloa poistotekstiiliä vuosittain. Tämä on 13 kiloa jokaista suomalaista kohden [2].

Käsissämme on ongelma, joka pitää ratkaista. Tämä ratkaisu on tekstiilien kiertotalous.
graafi_tekstile

 

Tekstiilien kiertotalous -projektissa luotiin malli siitä, mitä toimintoja ja vaiheita toimiva tekstiilien kiertotalous kattaisi. Sisäkehällä on kyse vanhojen kunnon vaatehuoltotaitojen elvyttämisestä, eli vaatteiden ja tekstiilien korjauksesta ja uudelleenkäytöstä. On kuitenkin epävarmaa, vähentääkö tämä todella tekstiilituotteiden kulutusta.

Jos vaatteiden uudelleenkäyttö ei ole mahdollista, niiden materiaali voidaan käyttää uudelleen

Mallin ulkokehä sisältää kaikki ne teolliset prosessit ja logistiikan, jolla tekstiiliaines kierrätetään joko kemiallisesti tai mekaanisesti tekstiililangaksi, kankaaksi ja jälleen vaatteeksi. Tavoitteena on ylläpitää materiaalien arvo niin korkealla kuin mahdollista ja ympäristövaikutukset niin pieninä kuin mahdollista. VTT on kehittänyt teknologioita, joilla tekstiiliä voidaan tuottaa puusta tai käytöstä poistetuista puuvillatekstiileistä.

Tekstiilien kiertotalousmalli viitoittaa suunnan, joka on teoriassa suhteellisen selvä. Tiedämme, mitä elementtejä tarvitaan. Meidän on luotava arvoa jätteestä, korostettava omistamisen sijaan käyttöarvoa ja tavoiteltava tehokkuuden sijaan käyttöä, joka takaa resurssien riittävyyden [2].

Ovatko nämä muutokset jo tapahtumassa? Kyllä ne ovat.

VTT koordinoi Telaketju-hanketta, jonka tavoitteena on edistää poistotekstiilien keräys-, lajittelu- ja jalostusverkoston kehittymistä Suomessa. Ryhmässä on huomattavan innostunut ilmapiiri. Useimmissa maissa on meneillään vastaavanlaisia kiertotaloushankkeita.

Onko siirtyminen tapahtumassa riittävän nopeasti?

Onko mahdollista siirtyä kiertotalouteen nykyisen lineaarisen talouden lähtökohdista? Nämä ovat paljon monimutkaisempia kysymyksiä.

Lineaarisia tuotantojärjestelmiä on hiottu vuosikymmenien ajan. Nämä prosessit perustuvat neitseellisten raaka-aineiden hyödyntämiseen. Tämän vuoksi on varsin tärkeää kehittää teknologioita nimenomaan kierrätettyjen materiaalien hyödyntämiseen raaka-aineena. Teknologiat eivät kuitenkaan sellaisinaan riitä. Muutosta tulee tapahtua niin henkisellä, rakenteellisella kuin taloudellisellakin tasolla.

Yksi isoimmista haasteista on se, että kustannukset ja hyödyt eivät ole tasaisesti jakautuneet nykyisissä arvoketjuissa ja -verkostoissa [2]. Viljelijät ja valmistajat kärsivät myrkyllisten kemikaalien, epäinhimillisten työolojen ja veden puutteen aiheuttamista haitoista, kun taas brändin omistajat ja kuluttajat hyötyvät voitoista ja halvoista vaatteista.

Kuluttajat vauhdittavat muutosta

Vallalla olevan ajattelun mukaan kuluttajien on vaadittava yrityksiltä ja tuotteilta vastuullisuutta, ja ohjattava markkinoita valinnoillaan. Ja näin tietysti on. Kuluttajien kysynnän lisäksi on olemassa lukuisia poliittisia ja lainsäädännöllisiä välineitä tilanteen muuttamiseksi, kuten kierrätystavoitteiden nostaminen, jätehuollon vaatimukset, tuotteiden merkintäjärjestelmät, julkisten hankintojen säädökset ja niin edelleen.

Kaikki edellä mainitut ovat kuitenkin osittaisia, nykytilasta käsin luotuja ratkaisuja. Uskon, että koko taloudessa pitäisi olla mekanismi, joka suosisi kiertotaloutta lineaarisen tuotannon ja talouden kustannuksella. Tämä sisään valettu mekanismi ajaisi kiertotaloutta moottorin tavoin oikeaan suuntaan, esimerkiksi arvon tasaisempaan jakautumiseen ja resurssien riittävyyteen. Tässä kohdin tarvitsemme innovaatiota, koska toimivaa moottoria ei vielä ole.

Olemme kuitenkin päättäneet ryhtyä toimeen, mikä on kaikkien muutosten ensimmäinen vaihe. Tarkoituksenmukaiset toimenpiteet kyllä seuraavat.

paunonen
Sara Paunonen
Senior Scientist
sara.paunonen(a)vtt.fi

 

Viitteet:
[1] Bhardwaj, V. & Fairhurst, A., 2010, Fast fashion: response to changes in the fashion industry. The International Review of Retail, Distribution and Consumer Research, 20(1).
[2] Fontell and Heikkilä, 2017, Model for Circular Business Ecosystem for Textiles, VTT Technology 313.
[3] Statista, https://www.statista.com/statistics/263154/worldwide-production-volume-of-textile-fibers-since-1975/
[4] Schor, J.B, 2005, Prices and quantities: Unsustainable consumption and the global economy, Ecological Economics, 55(3), 309-320.
[5] Ellen MacArthur Foundation, 2017, A New Textiles Economy: Redesigning Fashion’s Future, pp, 150.

Finnish companies make a shift to the circular economy with innovative business models

The basic idea of sustainable circular economy business models is to produce not only economic value, but also environmental and social value. In the circular economy, they key objective is to keep the value of materials and products high for as long as possible. To be able to make a shift to the circular economy, it is essential to design the products in a more intelligent way by increasing their service life and changing their role in the system.

A shift from product-focused activities towards production of services supports the transition. When the product manufacturer maintains the ownership of a product, this will, at the same time, increase the motivation to lengthen the service life of products, and make the repair, remanufacturing and increasingly efficient use of resources more important than before.

In the CloseLoop project of the Strategic Research Council of the Academy of Finland, challenges associated with the development of new business models are systematically assessed, and new circular economy business models and concepts are brainstormed for Finnish companies. These concepts are developed and tested in collaboration with companies and stakeholders, including end-users and consumers.

Towards the circular economy with collaborative intelligent approaches

Digitalisation and the Internet of Things (IoT) offer new opportunities for the development and implementation of circular economy business models. They enable the gathering of information on products in a new way. This provides the manufacturer with increased knowledge on how the product is being used, when the product needs maintenance, and when the product is nearing the end of its service life. This makes it possible to develop new services and optimise the value of the product and its materials. On the other hand, this also increases the complexity of products and thus brings challenges to the preservation of the value of materials and components.

An individual company cannot solve the challenges related to such business operations. What is needed is comprehensive understanding of the viewpoints and needs of various parties. One must also examine what kind of value the business operations create for various stakeholders and what kind of opportunities it offers for creating added value. It is also important to consider what kind of value the new business activities may reduce from different stakeholders. On the basis of such examination, the parties involved can develop a model for the optimisation of common value creation.

The question of value can also be examined at many different levels, taking into account such aspects as economic, social and environmental value. When considering the value received by the end customer, it is also essential to understand the value as a ratio between sacrifices and benefits. The circular economy creates demand for new services and, consequently, for new operators. Such services include collection of products and logistics, the secondary markets of products and platforms that enable longer service life or higher utilisation rate for products.

Concrete business cases of the circular economy

What are business activities conducted in line with the principles of the circular economy like then? For example, business strategies in line with the circular economy can be classified as follows [i]:

Circular economy business strategies

Where can one get tips for business activities in line with the principles of the sustainable and circular economy?

In May 2017, the British Standards Institute published the standard BS 8001:2017 [ii], a new standard on the circular economy. It offers guidelines for different types of organizations on how to implement the principles of circular economy in their operations. The standard consists of two parts:

  1. Information on what the circular economy is all about and why it is advisable to transfer to the circular economy and a more sustainable operating model than before.
  2. Guidelines on how to implement operations in accordance with the principles of the circular economy. This is the key part of the standard, describing the principles of the circular economy, a flexible implementation model and guidelines supporting the implementation.

The collection of circular economy business cases that may inspire Finnish operators have been collected on the Sitra website. The aim is to gather 100 examples of Finnish forerunner companies engaged in the circular economy on this site by the end of 2017. The examples have been divided in accordance with the five circular economy business models.

Concrete international business cases can also be found on the website http://www.plan-c.eu/bmix/. It brings together descriptions of sustainable business models of various types and examples on how such business models have been put to practice. The site presents eight ‘archetypes’ of sustainable business models and 100 real life business cases related to them.

New tools needed for the development of business activities

In the circular economy, business activities are more networked and systemic than before. Therefore, new tools are needed for both innovation and the development of existing business operations. The examination framework in the figure below emphasises these aspects, providing a holistic development tool for enterprises.

The transition towards business models in line with the circular economy requires examination at various levels. Changes in the business environment can be taken into account by assessing the ongoing development trends and drivers of change. Stakeholder participation in the examination work promotes generation of a shared view on the matter. At the level of business operations, the examination focuses on the key elements of the business model. The impact of operations is assessed from the viewpoints of requirements and the benefits achieved. The examination framework entails an idea of continuous assessment of business activities from the perspective of sustainability and the circular economy. Any changes need to be assessed, and the business model adjusted to the changed circumstances.

Examination framework

A systematic examination framework suited for
the development of business models [iii].

Teuvo Uusitalo VTT

Teuvo Uusitalo, Senior Scientist
Twitter: @TeuvoU

Maria Antikainen, Senior Scientist
Twitter: @MariaAntikainen

[i] Kraaijenhagen, C., van Oppen, C., Bocken, N., 2016. Circular Business. Collaborate and Circulate. Circular Collaboration.

[ii] BS 8001:2017. Framework for implementing the principles of the circular economy in organizations – Guide.

[iii] Antikainen, M., Valkokari, K., 2016. A Framework for Sustainable Circular Business Model Innovation. Technology Innovation Management Review 6.

Discovering the unused potential of secondary materials

From the viewpoint of circular economy, a large share of products would still need improvements, particularly as regards the choice of materials and the case of residues. We also need to change our way of thinking and we need more information in order to leverage the unused potential of secondary materials.

Trends affect the product cycle

In its report “Circular by Design”[1], the European Environment Agency[2] examined the impact of product trends on product cycles. The report highlights a positive trend, modular design, which extends the life cycle of products with the help of easy remanufacturing and repairability. Other trends that support circular economy include the services developed around products and shared use, such as making the use of products more efficient.

The development of circular economy is slowed down by complex product design and increased functionality. On the other hand, functional materials may make the use of materials more efficient, but, generally speaking, heterogeneous and complex materials are difficult to reuse and recycle, especially if actions after end-of-life are not designed properly. In other words, increasing complexity and functionality hamper the cycling of materials.

3-D printing, the Internet of Things and the development of markets for recycling are examples of “hot” developing trends, the impacts of which still remain unclear from the viewpoint of circular economy: each one of the above-mentioned trends contains both positive and challenging factors:

  • 3-D printing, or other additive manufacturing technologies, enable local production and improve material efficiency, but, on the other hand, high level of customisation may make the shared use of the products involved more difficult, and the use of many materials in products can negatively impact their recyclability.
  • The Internet of Things (IoT) enables such functions as product tracking and product information management, but may contribute to increasing product complexity and use of critical product materials.
  • The markets for recycling support business models related to recycling, but focusing all resources on recycling may reduce incentives for remanufacture and reuse of products and materials.

Let us not forget the secondary raw materials

In addition to the trends described above, it is good to recognise the potential of secondary materials.

There is no general definition for secondary raw materials, but they typically include waste materials (e.g. mine tailings), side streams (e.g. slag and ashes), processing residues, material removed during product life cycle, and the products and their materials that have reached the end of their life cycle.

Waste-free production is not always possible, since the current production processes generate waste or side products, and the product life cycle is not necessarily very long. The large volume of waste material generated beside our actual product may come as a surprise to many. An example: according to report “Growth within: a circular economy vision for a competitive Europe”[3], we recapture only 5 percent of the raw material value after the first use cycle. Are we really going to forget these lost materials? When discussing sustainability and climate, the focus is often on gaseous air emissions. But what about the solid “emissions”?

Should we change our conception of such “waste material” and, from this point forward, start calling it raw material or material instead of waste?

Should we raise the bar higher? In addition to using secondary materials for such purposes as soil improvement, road construction and filler material, we could aim for high-added value materials and products given an equal status alongside primary materials.

The idea about using and utilising waste materials for functional purposes in particular is good, but there are still major challenges in making that happen, and also concerns such as potential hazardous substances.

The utilisation of secondary materials requires openness, a change in our way of thinking, research and development, scientific competence and pilot production lines. And even more important, contributing factors include enthusiasm, commitment, securing safety sufficient competence and the ability to see the potential of new initiatives in terms of business development both within industry and research.

In addition to idea generation and technical challenges, we are also facing challenges related to ways of thinking, trust, openness, value chain co-operation, markets, legislation and taxation, and getting them solved depends on our common will to do so.

Material science in CloseLoop project

At VTT, we study and develop solutions for circular economy and design strategies for circular products in the CloseLoop[4] project of the Strategic Research Council of the Academy of Finland. We seek, for example, a high-temperature-resistant material, an electroconductive material and a porous ceramic material processed out of secondary raw materials. We aim at finding such solutions utilizing aluminium industry side streams, waste electrical and electronic equipment residues, and other waste materials. All the applications mentioned above and the materials used for them need to have specific technical properties and be functional. We will demonstrate how customised high-added value applications can be produced using secondary materials alongside primary materials, so that, in the future, we could regard these material flows as assets.

Päivi Kivikytö-Reponen VTT

Päivi Kivikytö-Reponen
Senior Scientist
Twitter: @PaiviKivikyto

[1] https://www.eea.europa.eu/publications/circular-by-design

[2] https://www.eea.europa.eu/

[3] https://www.ellenmacarthurfoundation.org/assets/downloads/publications/EllenMacArthurFoundation_Growth-Within_July15.pdf

[4] http://www.closeloop.fi/

The circular economy is a rough diamond with huge potential

Maria Antikainen VTT

The circular economy is a huge, rough diamond. It offers Finland an opportunity for economic growth and employment. We can switch to the circular economy via a series of innovation leaps. The key issue is a change in paradigm; doing things in an entirely new way rather than more efficiently.

The circular economy is a team game in which goals cannot be scored by going solo

A functioning circular economy is a complex and multi-dimensional system. The idea is to close the circle, but at ecosystem level rather than that of a single player. The circular economy is like a team game, where everyone has a certain role and the players need a keen eye for the game and great timing. This requires broad know-how and holistic management.

Examining systematic, holistic solutions helps us to see the wood for the trees. Circular economy solutions are complex wholes; goals are scored by the team, not individual players. On the other hand, if a player doesn’t hold up her end, this has an impact on the entire team’s performance. The forecasting, simulation and piloting of systematic impacts are important tools for understanding and visualising the consequences of solutions in the circular economy. Life cycle assessment is a good tool for evaluating environmental impacts. When analysing the impacts of solutions, the evaluation perspective must be broad and long, in order to identify solutions that are central in terms of their actual impact.

VTT offers expertise in various aspects of the circular economy diamond

In our publication, Policy Brief, we aim to serve companies and decision-makers by presenting the views, on the circular economy, of experts from a range of sectors. We understand that every circular economy solution has its own special characteristics and that various needs for change are highlighted. At VTT, we have presented the five issues that we consider to be central; these can be expressed in the form of questions:

  • To what extent are new technology solutions needed?
  • Do we need new business models?
  • What kind of change is needed in society’s structures?
  • What kind of collaboration development, or new partners, are needed?
  • To what extent is a breakthrough solution dependent on a certain mindset and behaviour?

circular economy en

The five examples of the circular economy we present in VTT’s Policy Brief illustrate how different perspectives are highlighted, how multi-disciplinary skills are needed to promote them, and what kinds of economic opportunities they open up. With the help of inspiring, concrete examples, we want to spur Finnish companies on to think about their own strengths and challenges with regard to circular economy solutions and to take bold steps towards the circular economy. VTT provides a wide range of expertise in all areas. We can build new circular economy solutions together with our customers.

Maria Antikainen, Senior Scientist
Twitter: @MariaAntikainen

Senior Scientist Maija Federley; Senior Principal Scientist Juha Honkatukia; Senior Scientist Päivi Kivikytö-Reponen; Research Team Leader Johanna Kohl; Senior Scientist Jutta Laine-Ylijoki; Principal Scientist Raija Lantto; Principal Scientist Tiina Pajula; Research Team Leader Anu Seisto

Are consumers prepared to give up owning stuff and begin renting instead?

In the pilot project Liiteri, we gathered information on consumer attitudes towards renting tools and cleaning equipment. The transfer from the sale of consumer products to the provision of services helps to keep products in circulation in accordance with the circular economy model and to minimise waste.

Have you ever wondered how much time and money you spend on selection, maintenance, repair and storage of, say, a power drill? When you compare your answer to the occasions when you actually need the machine, you may be surprised. Through rational comparison, renting a tool may turn out to be a surprisingly competitive alternative to owning it.

As consumers, our choices tend to be based much more on feelings than on rational decision-making. According to research, consumers lose much of their interest in a matter if adopting a new operating model requires a major shift in their way of thinking and operating.

VTT’s AARRE project was involved in a tool and cleaning equipment renting pilot called Liiteri. Consumers rented equipment from the Liiteri online service and picked them up 24/7 from a smart container located in the Teurastamo area in Helsinki whenever it was convenient for them.

Easy access and an opportunity for risk-free testing make services an attractive alternative

The pilot project gained a lot of media attention, and consumers were really enthusiastic about the service. Consumers were particularly interested in renting steam and pressure washers, window cleaning machines and drills.

The main benefits were related to saving the trouble of buying and maintaining equipment, a possibility to test and use higher-quality tools, and environmental advantages. Consumers also felt that the service allowed them to test equipment they would not buy otherwise. If used occasionally, consumers also considered renting more advantageous than buying.

Liiteri customer experience

Accessibility, price and slowness as service challenges

What created challenges in the renting model was the need to plan ahead, when you could not just grab a tool or a cleaning equipment from the closet, but you had to rent it and pick it up. This became particularly emphasised in case you needed the equipment urgently. It is also possible that the tool is not available when the consumer wants it, as happened in the pilot project with the most popular items. In some cases, consumers also considered the selection of the service laborious. When used often, many people considered the price of the rental service high compared to ownership. Consumers also considered picking up and returning the rented equipment difficult if the pick-up station was located far away. Heavy equipment requires using a car, which some considered a challenge. Even though consumers did appreciate the fact that by renting they had access to higher-quality equipment, they were wondering about the condition of the item when they get it. Could it happen that the machine does not work?

The challenges related to assessing the condition of equipment can be addressed with technological solutions that enable assessment of the condition. Consumers were also scared of breaking the equipment as well as of using strange appliances. On the other hand, consumers can also be provided guidance for using the machines in many ways, such as the machine itself providing user instructions.

People interested in more extensive service entities

Consumers were interested in larger service entities related to renovation, but equally also to other needs, such as repair services in a more extensive sense. Some of the consumers were also interested in buying the whole task as a service. Consumers also suggested expanding the product range to include tools and equipment owned by consumers themselves.

A large offering and tailored customer service play a key role when creating an ecosystem. Another matter of key importance is logistics, to which most of the problems associated with the service model were related. In addition to a functional and flexible logistics, other prerequisites of a successful consumer service are accessibility, ease of use and environmental friendliness. Different digital platforms, enabling a smooth renting process between companies and consumers or between consumers, also play a key role.

A shift to consumer services would significantly increase employment

Shifting to tool and equipment rental would have positive economic and employment impacts for Finland due to growth in the service sector. When we broaden the perspective to include other potential consumer products, we reach a totally new level.

For example, around EUR 2.5 billion is spent on cars each year, and over a billion is spent on other consumer durables. Most of these goods are imports. If even some of these expenses were transferred to the service business, it would have a major employment effect in Finland. Such services could also increase employment among those belonging to less employable groups and bring flexibility to working life. Here, the high price of work constitutes a challenge, rendering creation of profitable circular economy services more difficult. Different functional employment models could be adopted and the price of work could be lowered to support and promote creation of jobs within the circular economy.

Continue reading