Businesses don't need to sell more products to increase revenues, they should rather focus on selling higher quality products with a longer life. The key lies in the circular economy, it not only promises higher profits but supports sustainability by enabling economic growth with lower resources.
The circular economy is about reducing electronic waste by recovering and reusing resources. It requires changing product designs and production where the e-waste becomes feedstock for new products. It's not a new concept, but it has received a huge amount of attention as climate change and limited natural resources become increasingly urgent.
Less than ten percent of resources that enter the global economy are recycled, the rest is discarded and often replaced with new items. There were more than 1.5 billion smartphones sold worldwide in 2019 and according to a survey, almost half of the US smartphone users upgraded their phones before the phones stopped working. More concerning is that most of these discarded phones go to landfills.
This approach has real benefits for businesses and the planet. By recovering resources through recycling or remanufacturing can result in massive returns, many businesses have realised increased benefits from making products from e-waste.
Discarded phones are full of valuable materials, there is 300 times more gold in a ton of phones than a tonne of gold ore. Unlike the linear economy, the circular economy captures the value of old phones and it doesn’t become waste.
Manufacturing new phones in a resource and energy intensive process. Businesses need a culture-wide rethinking of the way they handle their manufacturing processes and their resources.
However, the circular economy changes this model, it keeps resources in the economic system for longer and at the highest value possible. Electronics keep most of their value when reused or recycled.
Consumers are also starting to embrace the idea of keeping products for longer, reusing products or even purchasing recycled electronics. There is already an opportunity where people no longer need to purchase a phone or upgrade it every so often. When it comes to sustainability in smartphones, innovators like Fairphone have created modular phones that excel in the four areas of production, modularity, longevity, and recyclability.
More companies are now embracing circular business models to create more valuable businesses by utilising resources more efficiently and developing superior products and services. Improving asset utilisation by designing products that can be used more than once, can improve margins.
Adopting the circular economy will not only drive increased financial returns, but it will have a positive impact on society and the environment.