It’s funny how our sense of logic works. Built on centuries of philosophy and theology we often make decisions about how to act based on how others have acted before us — even if these methods were flawed. One of these logical beliefs is that going in a straight line is always the most effective and efficient action. But we rarely ask, what is at the end of that straight line? And do we want to be there?
This is especially true of the idea of the ‘linear economy’. This concept forms the basis of the traditional commerce model. To be in business, one has to take something, make something and sell it (take, make, dispose). The premise is simple and discrete. And in everything we do, from math to logic, humans like the attributes of discrete data. We like to know where a thing begins and ends.
“Instead of selling a product, we simply sell access to the product.”
However, what if we were willing to move away from straight lines and discrete numbers? What if we were willing to model a form of commerce around a circular concept? This is essentially the practice behind the idea of the circular economy. Instead of selling (disposing) of a product, we simply sell access to the product, and while the notion of subscription and lending services is nothing new, what we can do with this model in today’s world, certainly is.
Firstly, there are many ecological and ethical reasons why the circular economy is a positive innovation. Holding on to a product means when our customer is finished using it, we can simply pass it on to the next customer, reducing waste, labor and the need for new raw materials. But aside from this, the circle economy model also strongly encourages product innovation, improved customer service, and material value retention.
Built a better light bulb
One example of how this works is through Phillips ‘pay per lux’ solution. Here, Phillips owns every part of the service delivery from the light switch to the bulb and the user only pays for the light they use. This means it is in Phillips’ best interest to make their light bulbs as long lasting and efficient as possible.
“…they agreed to engage in planned obsolesce and promised none of their light bulbs would ever exceed a lifespan of 1,000 hours.”
If you’re aware of the Phoebus Cartel, this is particularly ironic, because, in 1924, Osram, General Electric, Associated Electrical Industries, and Philips (the big four in light bulbs) all entered into a secret pact to manipulate the market. Until then, light bulbs regularly exceeded 2,500 hours and development was still advancing, but the companies were convinced, the emergence of an eternal light bulb would spell disaster. So they agreed to engage in planned obsolesce and promised none of their light bulbs would ever exceed a lifespan of 1,000 hours. The cartel was successful and planned obsolesce is still practiced by several companies today. But just imagine how different things could have been if they had thought circular instead of linear.
By moving into a circular economy model, everything from cars to clothes can be used on a service basis either per use or by subscription. The products and the resources used to make them stay in the loop and are used more efficiently. Once you are finished using your product, essentially, you stop buying it. Just like your lights, you switch the product off.
So while many people are still reluctant to the idea of going around in circles, we should be conscious of the fact, it’s how our world works best.
The Rise of the Circular Economy was originally published in UX Planet on Medium, where people are continuing the conversation by highlighting and responding to this story.