There are five megatrends that should help bolster the Circular Economy.
1. Resource scarcity and water insecurity
The resources are consumed 50% faster th an they can be replaced. Obviously, these factors will lead to increase and volatility in material and energy prices.
Companies that use the circular economy “powers” will keep raw materials in play through maintenance, re-purposing or transforming them into entirely new product categories. For example, SAB Miller is turning brewing bi-products into inputs for other manufacturing. Veolia is using wastewater to produce bio-plastics. And DSM is promoting “circular supply” through development of cellulosic bioethanol from agricultural bi-products. The circular economy could generate over $1 trillion of annual material savings globally by 2025.
2. Urbanization
Over half the world lives in urban areas and that trend will continue to grow. By 2025 the largest US cities will generate more than 10% of global GDP growth. By 2030, more than ½ the global population will live in emerging market cities with even more concentrated urban growth in countries such as China.
According to the Ellen MacArthur Foundation’s “Towards a Circular Economy” Volume 3, concentration of populations in urban areas will unlock economies of scale needed to enable collecting and treating post-consumer materials for re-deployment.
3. Empowered consumers
With greater access to data and social media, consumers will have more information on product impacts and greater expectations around product sustainability performance. Havas Media’s “Meaningful Brands” reported the majority of consumers believe brands should help solve social problems and improve quality of life. The World Economic Forum’s “Engaging Tomorrow’s Consumer” show that millennials prioritize environmental impacts in their buying decisions. And the Regeneration Roadmap study highlights a large class of consumers they term “Aspirationals” that like to shop but don’t want to harm the planet in the process.
4. Rise of the sharing economy
According to "Retail Horizons", people are increasingly sharing or renting things, rather than buying new products to consumer. This trend could grow and continue to create a new form of consumer economy in which experiences and access to items are more desirable than ownership. Where there is excess capacity, trust, critical mass and technology to the sharing economy leverages the “power of the inner circle”, keeping products cycling in the market for as long as possible. connect markets, this trend should continue to grow.
5. Community reliance
Retail Horizons describes the trend of self- and community reliance where people cherish the things the build more than the things they buy and strive to provide more of their own basic needs rather than depending on multinational corporations and institutions. The increase in farmer’s markets and community gardens and makers markets are just some of the signals of the movement. Moving towards more localized and self-contained markets offers great opportunity for people to live the Circular Economy founding principle of “Waste is Food” first-hand.
