For Entrepreneurs, The Circular Economy Presents a Massive Opportunity

Can we ensure our future prosperity given finite resources? Can we meet the needs of the 9 billion people -- and 5 billion middle-class consumers -- who will soon inhabit our planet, without destroying it? Can we restore our ecosystems while growing our businesses and economies? Could the answer to all of these questions possibly be yes?


That's because a new kind of economy is taking root, called the circular economy, that's capturing the attention of change-makers around the world. It offers a way of growing our economies and businesses while facing up to the resource shortages and environmental degradation that threaten us. And it presents a generational opportunity for creative thinking and action by entrepreneurs and consumers everywhere.

How Does It Work?

An excellent report by the World Economic Forum defines a circular economy as "an industrial system that is restorative and regenerative by intention and design." In other terms, it is an economy that generates no or minimal waste; and whatever waste it does generate can be returned to the environment safely.

Crucially, it's a system in which taking less from our environment -- and using what we take more wisely -- actually generates economic and business growth.

The reports are full of examples of companies that are exploiting the principles of the circular economy to increase sustainability, add jobs, and improve their bottom lines. They also offer key principles and data for other entrepreneurs and intrapreneurs to begin innovating.

It's important for us to study these findings in order to understand what's being done and begin envisioning what's possible. In addition to the WEF reports, I recommend following the Guardian's section on the circular economy. And there's plenty more out there.

Universities and other academic institutions can help, too, by including the circular economy in their economics and business school curricula.

New Business Models

What the burgeoning circular economy needs, in addition to new technologies and large-scale collaboration, are innovative business models that create value for all stakeholders.

So far, large companies have led the way through intelligent intrapreneurship. Renault and H&M, for example, have shown that recycling and remanufacture improve not only resource sustainability but revenues, profits, and customer loyalty. Green companies such as Ecover are pioneering ambitious circular models, and myriad startups from all sectors are entering the scene.

Meanwhile, Governments are joining the movement, too, in both developed and developing countries. And organizations such as the Ellen MacArthur Foundation are helping to define important next steps.

Widening the Circle

Scaling the circular economy will require even more intrapreneruship from large companies. But just as important will be new enterprises that generate financial, social, and environmental value for multiple stakeholders.

Such enterprises are the territory of social entrepreneurs. The opportunity is ripe to lead the circular economy's next phase.

Cross Sector Collaboration

Substantive collaborations across sectors and industries will be essential. For social entrepreneurs, this means linking up with next-generation technologists, forging partnerships with other companies up and down the supply chain, and listening closely to all stakeholders. In many cases, it will mean all of the above.

Changing Our Lives

The most fundamental way to strengthen the circular economy is to start participating in it, with our behavior, the ways we work and live. By turning to renewable energy, sustainable food, and "cradle-to-cradle" products, we'll help create the demand we depend on.

Let's constantly rethink and improve our own choices as consumers. The circular economy is, after all, the basis and outgrowth of a new way of life.

Let's make it ours.