Circular Economy Key to Unlocking Productivity?

February 07, 2017 Categories: Latest News

“The smart rebound of the European economy will require game-changing strategies, breaking the paradigms prevailing since the industrial revolution. A priority is to go beyond the linear economy, where stakeholders are in traditional silos. In addition to preserving natural resources, shifting to a circular economy offers an opportunity to create new sources of wealth. “

Laurent Auguste, Senior EVP Innovation and Markets, Veolia

In 2010 the EU set a target of 3% of GDP to be invested in R&D by 202. Currently we are sitting at around 2%. Some think this could be one of the reasons why productivity has stagnated in countries such as the UK, as companies sit on cash, rather than investing in developing new innovations. Could the circular economy be a way of unlocking this investment?

An article on Circulate (http://circulatenews.org/2017/01/eu-realises-circular-economy-potential/) recently asked this question and came up with a resounding yes.

Looking at the recent Growth Within (https://www.ellenmacarthurfoundation.org/publications/growth-within-a-circular-economy-vision-for-a-competitive-europe)

report published at the World Economic Forum in Davos, by the Ellen MacArthur Foundation, the article concludes that Europe has been wasteful in its use of resources, which won’t come as a surprise to most people. The overuse of resources in the manufacture of products is estimated at a factor of 1.5, when compared against regeneration levels. Even more striking is the poor utilization levels of many of our products and buildings. For example, cars have an average 8% utilization rate and office buildings less than 40%.

The article states that:

“European investors are looking for attractive propositions with positive medium term prospects to place their money, while also undoubtedly being aware of the risks of stranded assets in sectors like the fossil fuel industry with questionable long-term prospects. Meanwhile, innovators and businesses who are taking advantage of the opportunities in a new economy need investment to reach scale and the market – it’s a potential win-win and this report highlights 10 key areas, across three focus sectors in food, mobility and built environment, where there are significant opportunities.”

There are many businesses that understand the potential of the circular economy to make assets more productive and to spur innovation. These companies are looking to buy from innovators that understand this paradigm shift. Is your business one of them? Do you need support to fully understand the opportunity and unlock the potential in your own assets? If so, WRc can help. For further information please contact Kathy Lewin at kathy.lewin@wrcplc.co.uk.

Jayne Matwiejczyk head of communicationsTel: +44 (0) 1793 865075