4.1 The economic system difference in circular economy

 

In this lesson we’re going to examine how the implementation of circular economy practices outcomes differs depending on the different perspectives. Specifically, we’ll explore the outcomes from three distinct perspectives, providing a comprehensive understanding of its outcomes. 

1.Buiness perspective 

2.Consumer perspective  

3.Policy perspective  

 

Linear vs circular thinking – Business perspective

The following table indicates the major differences between linear and circular economy outcomes from a business perspective.

Let’s compare	Linear economy	Circular economy
Source of value creation?	Product	Functionality and performance
Distance between source of production and consumption?	Distant   Economies of scale and global production chains have a play	Two are closely linked
Product or user needs takes priority?	Steer consumer needs towards product offer	User need/utility drives service Service drives  product
Focus on the end-of-life phase?	Lack of focus	Is an opportunity for resource mining Focus from the inception

Linear vs circular thinking – consumer perspective

The table below shows the key differences between linear and circular economy outcomes from a consumer perspective.

Let’s compare	Linear economy	Circular economy
Purchase is focused on	Product purchase – Consumerism  follows marketing	Utility/service – Fulfilling the need drives the purchase
Cost / Differentiation focus	Competitiveness through global value chains used for cost reduction	Local, customised production attitude
Buyers’ intent with the purchase	Ownership is the norm	Accessibility is the norm
Value at the end of life	Low/no residual value of products  Designed to degenerate	Value at end of life Designed to regenerate

Linear vs circular thinking – policy perspective

The main differences between the outcomes of the linear and circular economies in policy perspective are shown in the following table.

Let’s compare	Linear economy	Circular economy
Risks on the economy	Growth focus with taking resources as infinite	Addresses resource security and decouples growth /resource barrier
Value to the economy comes from	Dependence on the existing production system	Facilitating skilled workforce for services
Focus on locality	Global playing field – competitiveness through globalisation	Local focus, Co-dependent communities co- creating value
Regulatory focus for products	Balance consumer protection with economic stakes	Safe and healthy services
Cost of end-of-life management of resources	Waste management is cost for the government	End-of-life management is a way of regenerating resources for the economy

As discussed in this lesson, the differences between linear and circular economic models have been explored in depth, helping you gain a clear understanding from three key perspectives.