Taking circular business models into the future
The start-up Circular Hub is highlighting the dormant potential of circular business models in the Swiss economy. During courses, expertise is shared and specific examples used to show how the topic is being approached. Although, this is only the beginning.
A formula so easy that even a child could understand it – infinite growth is not possible in a finite world. On a global scale, we have long been consuming considerably more resources than the Earth's ecosystems can regenerate in a year. We in Switzerland have also played a role in this excessive consumption. In May 2019, for example, the country had already consumed a year's worth of resources. However, things don't have to be this way. The pioneering project Circular Hub shows us how we can overexploit systems less without reducing our levels of prosperity. The project provides comprehensive information on circular economies on its website and in its newsletter, as well as offering a variety of courses on the topic – from a basic course for beginners to master classes offering expert knowledge and practical implementation guidance for various industries. This year, the project has started to introduce its implementation guidance to companies.
Marloes Fischer is sitting in the break room of coworking space "Citizen Space" in Zurich. Over a cup of coffee, Fischer, who was born in the Netherlands, explains what she and her company hope to achieve to conserve resources in the economy.
For a long time, the linear economic system worked as follows: a company would buy resources, make something out of those resources and then sell it. Afterwards, the product would be used and ultimately disposed of. "In a circular economy this product continues to be used," says Fischer. Product longevity and reparability are taken into consideration from the outset, she continues, as well as a product's economic, ecological and social added value.
"We make sure that as little value is lost during the production process as possible."
To demonstrate what this means in practice, Fischer refers to a global lorry tyre manufacturer by way of example: "The classic business model of a tyre manufacturer is to manufacture and sell tyres. The company is not interested in what happens to the tyres after they are sold. A few years ago, the manufacturer started renting out the tyres. Once they have been worn down, the tyres are brought back, reprocessed and used by the customer again instead of new tyres. This pays off for the company because it saves money, particularly when it comes to buying new raw materials – and the customer doesn't have to buy new tyres. Instead of the linear "take-make-waste" model, a new circular understanding of the economy is therefore coming to light. This is currently also one of the Migros Pioneer Fund's focuses. "The tyre example shows us the direction in which we are starting to think," says Corinne Grässle, project manager at the Migros Pioneer Fund. She emphasises the importance of seeing the entire system as a unit. In specific terms, this means that new or – even better – recycled raw materials are used to make a product. This product is then used for as long as possible, before being repaired, reprocessed and ultimately recycled again. "In an ideal scenario, there would be no more waste," says Grässle.
Hardly any products today are perfectly suited to a circular economy. However, a circular economy approach is so compelling because it encompasses a range of strategies for making a product more circular. Take rental models, for example, in which products are used by different people over a longer period of time. Repairs, too, can considerably increase the lifespan of a product. Circular Hub explains the benefits and opportunities of circular economies to Swiss companies, with a view to inspiring them to develop new business models.
"It is important that we show companies that this is not only sustainable, but also financially lucrative," says Fischer. The trained communications
specialist and Japanologist worked as a manager and consultant in the lean operations sector for many years, during which she helped companies to streamline their production processes and increase customer satisfaction. "I found the work exciting, but I asked myself what I could do to have a more positive impact on the world," says Fischer. For her, circularity is the next logical step towards making companies more future proof and economical. Furthermore, it is a great opportunity for the Swiss economy to position itself. That's why Circular Hub is focusing on raising awareness, and in particular on highlighting the financial benefits. "If an entrepreneur doesn't see the incentives, they are not going to switch to this model," says Fischer.
Examples of circular economies
Rental beds for the hotel industry: "Smart lease" offers hoteliers the option to pay for very high-quality beds and mattresses on a usage basis. The price they pay depends on the number of nights the bed is used during the month.
Renting instead of buying: Zurich start-up "Kleihd" allows customers to choose an item of clothing and borrow it for two weeks at a cost of between 10 and 60 Swiss francs. Members pay 100 Swiss francs per year, receive discounts on their rentals and can borrow items for up to four weeks.
Making construction material out of the rubble: With their company "They Feed Off Buildings", two Berlin designers have developed a concept that uses mineral building waste to produce terrazzo tiles for surfaces inside and outside of buildings. Under the product name Urban Terrazzo, the tiles are manufactured using building material on site and reused directly in the building. In contrast to other building substances that are suited to circular economies, this concept avoids logistics chains to the greatest extent possible.
After some research, Fischer found that the circular economy model is hardly implemented in Switzerland. "That surprised me, because Switzerland is actually known for being innovative." For a good year now, Circular Hub has placed raising awareness of circular economies at the forefront of its work. "Together, we look at what, if anything, the company is doing in the area of circular economies, what their next step could be and what resources they might need," says Fischer. Ultimately, it's about more than just product development, she says – it's about switching to a circular business model. This approach makes use of the same standard process and project management we all know. The difference lies in the goals being pursued, she explains. In topic-specific master classes, participants' understanding is deepened and put into practice. "We work with a network of experts and managers to provide companies with creative, financial, technical and sociopolitical expertise," says Fischer. The aim of the implementation guidance is to inspire and motivate companies to take specific steps towards a circular economy.
Fischer is well aware that companies won't implement these changes from one day to the next. "They have to trust the system. And building trust takes time and the provision of information." That's why Marloes Fischer and her employees have attended a host of events to tell companies about their idea. This allowed them to forge some key contacts. "We receive a lot of enquiries for presentations at conferences, at secondary schools and for associations," says Fischer.
Marloes Fischer and her team have also needed a lot of patience and perseverance themselves, however. "You don't know which challenges you have ahead of you when you're setting up a company. If you did, you'd probably never start one," she says. Sharing your business ideas over social media alone takes up a lot of time, she explains, and raising awareness of circular economies is not an easy task either. "We are providing information in an existing market on a topic no one really knows how to approach and whose potential is largely unknown."
Circular Hub now has three employees and a freelancer on board. Project Manager Nando Schmidlin has been there from the very beginning. The trained business designer is specialised in "Innovation for Sustainability". "Switzerland is an exciting place for circular economies," he says. Typical Swiss SMEs in particular could benefit from this model. "Their production processes are usually already very efficient and cost-effective. But with a circular economy model they could definitely get even more out of them."
Fischer is excited about the potential in Switzerland. This could become apparent very soon, as following the project's focus on holding courses in its first year, this year will look at implementing circular economies in companies. This could bring the project a big step closer to its goal of building a "Swiss Circular Valley".