Even if you’re just getting to grips with the circular economy, chances are you’ve come into contact with some of the business models within this new framework. If you’re a regular reader of Circulate, or are familiar with the concept of a circular economy, then these business models will seem like old friends. Whether it’s the virtualisation of a product, incentivised return, shared use or product as service, business model innovation is at the heart of a shift to the circular economy.
Uptake of these concepts has been strong, facilitated by new technology and changing customer demands. However, sometimes it feel like exploration of such services and systems remains at surface level. It’s naive to think that it’s as simple as taking a product and making it last longer, or leasing it instead of selling it. What conditions would have to be in place to make a new business model that offers users a more convenient or better service? Would the new design actually lead to more effective flows of resources, energy and information? And how would the wider economy benefit?
As part of Munich Creative Business Week, design thinking agency IDEO invited designers, corporates and entrepreneurs to join them in taking this discussion forward.
The Creative Sparx event, hosted at IDEO’s Munich studio, saw a rich panel discussion with representatives from the Ellen MacArthur Foundation, eBay, CRCLR Lab Berlin, and IDEO itself. The conversation explored the role of design thinking in the transition to a circular economy, what the benefits might be for businesses and customers, and the pre-competitive collaboration needed to overcome some of the ‘circular’ challenges that are just too complex to be solved by one company or industry alone.
What set this event apart from others on the topic was an exhibition which showcased how IDEO are taking the lead in applying a circular design lens. On show were six previously unseen provocations which pushed the thinking around product service systems, durable, returnable and shareable products, adding important nuance on how these business models might actually work, and how they could deliver a better experience for people.
Examples included Optimax, a pair of trainers that get better the more you use them. When your pair of shoes is past its best, send them back to the manufacturer who’ll analyse the wear and use patterns, informing the next customised version. You can imagine having a version 1.2, 1.3, and so on, all responding to your changing body and activity. The user gets access to shoes designed for them – usually the privilege of elite athletes – and the manufacturer get their product back in novel way: resources in exchange for data.
With so much grocery shopping taking place online, there’s a huge opportunity to simplify packaging. Since they’re not calling out at you from the shelves, bottles, pots and boxes could be pared back, not just visually, but also through reducing material complexity or increasing durability and re-use potential. That’s the concept behind Clean, which exploits the features of a virtual shopping experience to offer packaging that’s more convenient for the user, and able to fit in a defined end of use pathway, whether that’s re-use, recycling or composting.
How much stuff do you have at home gathering dust? Cameras, computers and coffee machines take up room in cupboards, with owners promising to use them (or sell them) one of these days. The blender is a common item found in such purgatory, but what if it could sell itself? With ‘Use Me/Lose Me’, your device would send a mobile notification if it had been unused for a set period of time, giving you the resale price and the chance to sell it on a website like eBay.
Other areas explored were re-fillable makeup with an emotional component, ‘teleporting’ your furniture during a house move using local options, and an office chair with pre-emptive maintenance built in.
Right now, it’s thrilling to watch the market experiment with the framework and principles of a circular economy. There’s a serious economic opportunity on offer, and new business models are emerging almost weekly that turn traditional ‘linear’ thinking on its head. Let’s face it – not all of these experiments will work, and that’s okay. That’s how the cookie of innovation crumbles, and it’s encouraging that we’re living in an society that’s learning to love failure. But to stand a better chance of success, entrepreneurs, intrapreneurs, design thinkers and change makers would do well to approach the circular economy opportunity in the same way as IDEO. Fortunately, it’s easier than ever to do that. In January, IDEO and the Ellen MacArthur Foundation released the Circular Design Guide, a set of 24 methods and resources that informed the work on display in Munich – is openly accessible and at your disposal.
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