What is the basis of circular economy? This economic model was created to respond to the global need for sustainable development, and for this end it uses essential principles defining the areas where circular economy can and should be applied.
These "pillars" can be applied individually, or combined, and consist in approaches that enable companies to create value for their customers by reducing the environmental impact. New technologies often enable these approaches, which combine consumer and corporate needs. Specifically:
- sustainable inputs: the use of renewable inputs or those that are reused/recycled is key for a significant reduction of the ecological footprint
- extending the product’s life in terms of design, maintenance and repair, requires a cultural shift. Today, products are often replaced instead of being repaired because repairs may appear complicated and too expensive. The same applies to manufacturing sites and infrastructure, whereby new facilities are built instead of reusing and upgrading existing ones. Action can be taken in many ways: the design of products should be modular, to facilitate repairs. At the same time, new professional roles connected with repairs and maintenance should be developed
- sharing represents an opportunity to reduce the cost of accessing a wide range of products and services and also encourages social interaction and cohesion by using platforms. Furthermore, sharing offers the opportunity to make a better use of a product, thus decreasing the need for new ones
- "product as a service": instead of selling the product, the company sells the corresponding service. This solution has rapidly grown due to the development of digital technologies. It offers significant opportunities for innovation and the reduction of the environmental impact through close interaction between businesses and customers
- end of life cycle, in addition to the undoubtedly important solution of recycling, other solutions can be applied, though they are not often considered:
> upcycling: transforming an asset at the end of its life cycle so that it creates more value than it did as originally used. This area is yet to be explored
> regenerating: it is possible to regenerate (i.e. extensive repair) a number of products or goods that have reached the end of their life before reintroducing them on the market.