Circularity is an important concept within economic systems. In an ideal world, a circular economy will have minimal waste and most of the resources will be continuously renewed and reused. This systematic approach gives equal weightage to the business and the environment. Digitalization can boost a circular economies. It provides the right tools without the added overhead to keep track of different chains in the business.
The fashion industry is a good example where a circular economy can be very useful. Sustainably producing different kinds of natural fibres and dyes is challenging. Circular economy promotes the reuse of clothes instead of production. Renewed clothes can be used for all kinds of purposes, and can unlock a new business segment. Fashion brands themselves have begun to focus on durability. Making clothes and accessories that lasts. Durability is becoming a more attractive trait nowadays. It is a testament to the products quality.
Recently Ikea launched it’s own second-hand store in Sweden. It is part of their push towards getting more life from their furniture. Furniture is a bit more tricky. However, Ikea’s modular approach makes it a bit simpler to replace parts of a furniture instead of the complete piece. They are looking into ways in which furniture can be taken apart and put together multiple times without any damage to the components. This will help improve the overall lifetime of the product.
Circular economies will not lead to an infinite economic machine like the theoretical perpetual motion machine in Physics. There has to be a viable exchange of value at each step of the process.