circular economics and the devils of disruption

I found it very interesting that in a parliamentary debate around resource management and the circular economy today, the most animated and engaging person on the panel of five experts was not from the waste sector, but the retail trade.

It was Bob Gordon, head of environment at the British Retail Consortium. He dared to challenge current closed loop thinking, a lot of which centres around product-service models. He said he was frustrated by it, that it didn’t go far enough. In his eyes, such ambition needs to grow balls. It needs to become disruptive.

“When we talk about going from goods to services, from selling to leasing, I don’t think that is challenging. We need a more radical approach … the real shift will be disruptive innovation,” he told delegates.

Disruptive innovation. As if the waste industry doesn’t have enough on its plate trying to figure out what exactly a circular economy means. Meanwhile brand leaders who are most ahead of the game here still are somewhat reluctant to embrace it. It’s not really in their interests to start leasing products, after all. The economics don’t stack up.

But Gordon has hit on a pertinent point. By being disruptive, sure, you cheese people off, but you also excite others. Disruptive innovation helps create new markets and value networks by putting a massive spanner in the works of the status quo.

It accelerates change by forcing rapid behaviour change and eventually displaces what went before. Take cloud computing for instance – it is revolutionising IT and communications; the way we work and also the way we play. The advent of cloud has been disruptive, but it is also proving highly constructive and beneficial.

Gordon gave two examples of how such interruption could apply to resource management. The first was lab-grown fake meat – “by removing the animal you cut carbon impacts by 98%” – according to The Guardian, the reality of this is so close you can almost taste it.

The second scenario involves the humble washing machine. One that tells you when it’s about to break down. Before it does however, the manufacturer is notified and its repair service arm sent round to fix it. If they can’t fix it there and then, you are given a leased model on the spot.

The beauty of this is that the manufacturer designs its washing machines better; it builds in failure prevention technology. It also takes ownership of the reuse and recovery process through customer takeback if necessary. And it’s financially viable because the customer pays a  premium for such a service.

If big corporates do get their teeth into this concept it has massive repercussions for how we view and deal with our waste. I remember when the internet first went live, many retail firms said online shopping would never take off. Five years later, it exploded. Ten years later, high street shops began to close. Go figure.