Welcome to the first in a series of articles accompanying the publication of thematic groups of new case studies collected from a particular region or sector. This first cluster of cases demonstrates how the circular economy concept is being applied in the US.
The circular economy is a new economic model that aims to make more effective use of our planet’s resources through systems that are restorative and regenerative. Recently, the concept has started to become more widely explored in the US context, by organisations such as the US Chamber of Commerce Foundation, who convene a yearly National Circular Economy Summit. That is not to say, ‘circular thinking’ is completely new to the US. In fact, Cradle to Cradle, Natural Capitalism and Biomimicry, fundamental ideas that underpin the circular economy model, all originated from the US.
Why would US businesses embrace the circular economy?
There are at least three defining US characteristics that would make the adoption of such a model attractive. Firstly, the US is a highly competitive economy, so any approach that could provide an advantage over other companies, for example, improving customer retention, increasing market share or lowering the cost of materials, would all be good circularity motivators. Secondly, the inherent innovativeness of the circular economy would be a strong driver in a country, which, by the metric of most patents filed, could be considered as the world’s most innovative. Finally, digital technology is a key enabler for unlocking the potential of the circular economy. This will of course play to the strengths of US based digital companies and entrepreneurs, who have up until now been the engine of the digital revolution.
The Ellen MacArthur Foundation’s case study library now tracks US companies that are recognising the competitive advantages, innovation possibilities and digital opportunities, and are starting to adopt circular approaches to their designs, operations and business models.
Design is a key building block of the circular economy, and is an area in which more US businesses are beginning to experiment. What’s more, there is a growing number of resources available to help individuals and organisations get into a circular design mindset, such as the Circular Design Guide release by the Ellen MacArthur Foundation and IDEO earlier this year.
This circular design thinking has been demonstrated very elegantly by Mohawk-Niaga, which has created a new 100% recyclable carpet material, that can be used for both the backing and surface layers. It has been estimated that carpets account for 3.5% of all material disposed of in US landfills, amounting to 2 million tonnes of lost materials each year. Mohawk-Niaga’s new material could help close the loop in carpet manufacturing so that materials can be diverted from landfill and instead be continually recycled.
More businesses are now realising that there’s value even in products designed in the take-make-dispose mindset. Urban Mining, a Texas based company, has developed a process for recycling Neodymium Iron Boron (NdFeB) magnets, a widely-used magnet with applications in products such as cordless drills, hard drives and electric motors. The process relies on the recovery of magnet ‘feedstock’ from products that have been disposed at the end of use.
Recycling is referred to as an ‘outer loop’ in the circular economy. The higher sources of value creation lie in ‘inner loop’ strategies that preserve the integrity of the product as well as allowing the products to circle longer. Two companies have developed infrastructure that facilitate this value capture. CoreCentric, based in Chicago, has created a network of repair programmes and distribution networks that allow electronic products to have a longer effective life, diverting one million service parts and 400, 000 products from landfill each year. Yerdle has created a ‘recommerce platform’ making it easier for brands to buy back and resell used items. The San Francisco based company, which has partnered with clothes companies Patagonia and Eileen Fisher, have found that in some cases the platform allows brands to capture the same margin on the second sale, as well as engaging a whole different customer segment seeking more affordable clothes.
The US is well-known for its great cities – New York, Los Angeles, Houston and Chicago are all names associated with vibrant culture, great energy and creativity. Many US cities have economies that are as big as entire countries, possessing characteristics (size, density, talent) that make them well-positioned to both drive the transition to the circular economy as well as greatly benefit from the outcomes. One big current challenge, likely to grow as the world becomes more urbanised, is how to feed citizens in a more effective way. One that does not put such a burden on natural systems and also addresses the vast amounts of waste currently generated. The Plant, an ecosystem of 16 food enterprises located in an old meat-packing building in Chicago, could be a model for future urban food production that fulfils this. The Plant’s ambition is captured in their mission statement: “To develop circular economies of food production, energy conservation and material reuse, while empowering people of all backgrounds to make their cities healthier and more efficient”
The Plant is a good example of how many aspects of the circular economy are inspired by nature. In nature, there is no waste, waste becomes food for the next stage in the cycle, and the whole system is powered by renewable energy. Another important characteristic of nature, also embraced by the circular economy, is the use of feedback. For example, trees. Collecting data on soil moisture, salt concentrations, temperature changes, even the arrival of pests on neighbouring trees, can inform the appropriate response mechanisms, allowing their well-being and growth to be more optimised. Using digitally-enabled feedback, allows companies like HP to optimise their new ‘Instant Ink’ business model, by collecting printer use data which has enabled improvements to system design, packaging, serviceability, durability and customer satisfaction.
These are just a selection of the US case studies that the Foundation has added to its case study library recently. In the spirit of the circular economy, feedback is welcomed to help us optimise the system. If you are based in the US and want to engage more on the topic, then the Verge conference held in Santa Clara between 19th – 21st Sept will have a complete day dedicated to the subject. Later on that month, the front runners of circular economy in the US will be gathering in Chicago as part of the Ellen MacArthur Foundation’s CE100 programme to discuss in detail, the role of ‘Cities and the Urban Bio-cycle’ in making the transition.
If you are interested in finding out more then please get in touch.