A Crash Course in the Linear,
Circular and Blue Economy
The Linear Economic development model is the traditional approach to economic development and involves the production and consumption of goods and services that create wealth and lifestyles. This approach uses a “Take, Make and Dispose” industrial process that depletes natural resources to create products that end up in landfills or incinerators. This form of economic growth is based on cheap and unlimited natural resources, labor and highly specialised global supply chains. It does not consider the environmental and social impact of its activities, consuming a great deal of natural resources and replacing it with large amounts of waste. The economic costs are compensated for by neither the producers nor consumers but by the broader community.
The Circular Economic model aims to dramatically reduce our dependency on using new resources. In this model, all products are designed to either be reused to produce future products at the same quality or be introduced back as biological nutrients to regenerate the environment. The basis of the Circular Economy business model is
to strengthen competitiveness by lowering costs and pursuing a more effective economy of scale. This approach requires changes to current business models, and
new product designs that optimise the consumption of materials, energy and labor which in turn provides a positive impact for society, business and the environment.
The circular economy… could immediately inject
$1 trillion into the global economy.
Professor Damien Giurco, Research Director, Institute for Sustainable Futures, University of Technology Sydney, 25 February 2014.
Linear Economy Focus
Creates large amounts of waste
Products designed for limited use
Waste is a cost and needs to be disposed
Competition and cost cutting
Increasingly goods and services provided from elsewhere
Increasing specialist workforce and increasing risk
Availability of natural resources are limitless
Energy from fossil fuel
Technology developed for industrial economy
Silo approach to strategy, solutions and resource use
Incremental change to innovation – aiming to do ‘less bad’ to the economy, environment & community
Blue Economy Focus
Uses waste streams as resource inputs
Products designed for longevity and reuse
Waste is a resource that can create additional value and reduce supply risks
Collaboration to create multiple revenue streams
Goods and services that meet the basic needs of the
community provided locally
More diverse skills and workforce readily adaptable
Availability of natural resources has limits
Energy from renewable sources
Technology inspired by nature (bio-mimicry)
Inter-connected approach to strategy, leveraging available resources and developing systemic solutions that creates multiple benefits
Transformational change to innovation – aiming to
do ‘more good’ to economy, environment, community
Respond to basic needs with what you have, introducing innovations inspired by nature, generating multiple benefits, including jobs and social capital, offering more with less and living in harmony with nature: This is the Blue Economy.
Professor Gunter Pauli, Initiator of the Blue Economy
The Blue Economy takes the concept of the Circular Economy (CE)
to a new dimension. A Blue Economy business model is focused on
generating more value and multiple benefits (including social and
environmental) with locally available resources.
The Blue Economy shifts away from the specialist core
business/core competence approach that forces companies to
focus on one industry but to instead develop multiple income streams from
different sources. It instead considers local economic development as a priority, ensuring that purchasing power increases and more money circulates regionally, permitting growth without inflation. The benefits include reduced capital and operational costs, the creation of more local jobs, new business opportunities, a regenerated environment and stronger, healthier communities.
Blue Economy Key Building Blocks
Designing innovative new business models that seek to identify multiple sources of revenue to increase the resilience of businesses and communities.
Using locally available resources to meet the basic needs of business and the community
Adopting systems and design thinking to develop integrated solutions by clustering businesses and opportunites to identify portfolios of inter-connected opportunities that provide multiple benefits
Waste is a resource and that nutrients, energy and matter should cascade through the economic system creating value
at each stage
Utilising innovative and appropriate technology inspired by nature (biomimetics/biomimicry)
Using renewable energy.
This video has been produced by Gunter Pauli and provides an introduction to the Blue Economy.
This video has been produced by the Ellen MacArthur Foundation and provides an introduction to the Circular Economy
We hear a lot about doing more with less. You won’t hear
that from me. You will only hear about doing better with less.
Big difference. There simply is no limit on better.
Matt May, Author - The Laws of Subtraction: 6 Simple Rules for Winning in the Age of Excess Everything
Possible People is a specialist in the application of the Circular and Blue Economy approach to economic development and we have developed our delivery model based on the Blue Economy. The following provides a crash course on the Linear, Circular and Blue Economy.