Riding the new, newer, newest economy wave

Technology is shortening product obsolescence cycles and, obviously, the approaching newness of the new-year upgrade of your personal gadget will add to that rhythm. At the same time, as obsolescence accelerates and waste piles up in dump yards, economies must shift from linear models to circular ones. This requires incorporating renewable materials, maintenance and recovery by design into products. Manufacturing companies are transitioning into the circular economy at varying speeds, and many countries have rewards and penalties for elements of production processes, involving resource use, product refresh rates and waste management. These operate outside the scope of competitive intensity that leads to shortened obsolescence cycles. A sustainable solution, however, cannot bypass market economics. This takes economic modelling into the realm of ownership and widens the definition of product use to sharing.

For economic and material efficiency, circular options must compete with traditional ones. Recycled inputs need to be cheaper than virgin resources, reusable products priced below single-use goods, and recovery cheaper than recycling. Such efficiency gains can shift consumer behaviour towards leasing and sharing, helping break the link between growth and resource exploitation. Material efficiency follows a hierarchy - smarter design first, longer lifespans next, and recycling last - countering an over-reliance on recycling that can be as energy-hungry as primary production.

Business models are key to the switch, shifting their focus from selling products to selling a combination of product and service. The product side of the mix can be lengthened while the service component ensures business continuity. Product-service as a concept needs to deliver superior customer value to either standalone component for businesses to make the transition. While doing so, businesses must calibrate resource use, avoid shifting the burden onto lifecycle stages, and reduce rebound effects such as increased consumption due to improvement in product accessibility. Business is the enabler for resource decoupling, but needs a supportive economic environment to make it happen.