Just like the word sustainability, circular economy means different things to different people. At a recent Resource event on the circular economy, professionals in France, who have been working intensely in the area, were surprised at how waste orientated many of the talks from UK organisations were. For them, the concept is much broader.
If we, as a group of experts find it difficult to agree on a definition, you can imagine how much harder is it for companies, especially small ones to get to grips with the ideas. Similar to understanding the role of innovation in small companies, there is little research into new business models and concepts within this important group of actors.
Fusion, co-funded by the European Union, aims to work with local entrepreneurs to develop support mechanisms that bring together life cycle philosophy and business growth. Fusion recently conducted a survey with nearly 300 small and medium sized companies across the UK, France and Belgium, many of which were already interested in some aspect of sustainability, from eco tech to sustainable designers, waste specialists to companies which are thinking more about CO2 emissions. Several publications picked up on the report and headlined it with "companies struggling to understand the term", but I feel more positive.
It's true that nearly 50% had never heard of the idea, but how much more exciting to think that as many had, and that almost 10% were thinking about it in the context of their business. While nearly a quarter of company owners found the description confusing, slightly more thought it was understandable. As we begin to think about how we work to communicate more of the benefits and opportunities, we can build on the knowledge that it gives owners a meaningful and inspirational view of their work.
Not surprisingly businesses thought that waste companies, manufacturers and the construction sector were most likely to benefit from the circular economy as it becomes more mainstream. But they also understood that how we design new products and services is going to matter. In particular, respondents thought it would give design companies a market boost.
What was even more impressive was that a number of people had begun to grasp issues around resource scarcity, and some 11% of respondents highlighted rare earth metals as a material group that had the potential for greatest gains.
It was interesting to find out just why SMEs weren't getting more involved. Regulation and lack of customer demand inhibited interest, and as with any small business, time was flagged as a big problem. This shouldn't be considered a brush off. In small companies, the business owner would likely be responsible for leading the transition to a circular economy business model but for these people it's often a struggle to keep on top of the day to day tasks. Owners also admitted they weren't sure how to apply the concept to their work and worried that they might lack the creativity to develop a new business model.
Companies only change when a business owner is passionate about an issue or is presented with a very clear economic case - both are preferable. We need to start working with SMEs for which the circular economy makes real sense. We need to be able to offer coaching and mentoring and help to finance their ideas. From these leaders we're already starting to see some new models developing.
Erica Russell is the director of insight and sustainability at BSK–CiC, a community interest company that supports ambitious small and medium sized companies to innovate and grow
Join the community of sustainability professionals and experts. Become a GSB member to get more stories like this direct to your inbox
