Circular economy helps business models to succeed


Davos – The World Economic Forum, together with partners, has published a white paper on the circular economy. It aims to show what holds companies back in the transition and what supports them. Among other things, it recommends more adaptable operating and business models.

The consulting firm Bain & Company found in a survey that 60 percent of all circular economy initiatives currently underway have not reached the desired scale. In a white paper entitled Circular Transformation of Industries: Unlocking New Value in a Resource-Constrained World, the World Economic Forum(WEF) analyzes why the transition to a circular economy in companies is not progressing fast enough. According to the report, firms are most often held back by a lack of technological capabilities, an exclusive focus on environmental sustainability, and limited industry partnerships. The document was prepared by the WEF in collaboration with global and Boston-based Bain & Company, the University of Cambridge and the French business school INSEAD.

The White Paper underscores that companies that embark on a circular transformation perform better economically while contributing to sustainable growth. According to Bain & Company, it is critical that they take a holistic approach to this, transforming operating and business models to reconfigure industrial value chains.

The shift to a circular economy requires cross-industry collaboration in which “holistic thinking leverages advances in materials, manufacturing and digital technologies,” said Jagjit Singh Srai, director of research in the Department of Engineering at the University of Cambridge. In his opinion, such collaborations and technologies “will form the basis for resource-efficient operating and business models of the future.”

He is quoted in an article published by the World Economic Forum. In it, WEF and the other white paper authors call for people to “join a growing group of circular economy leaders and work with us to transform the circular economy on an unprecedented scale.” em