In a circular economy, goods and services form a common story

The circular economy is an economic transition in which business models become more productive while reducing environmental impacts. In a circular economy, the original material can be used several times in production and can also circulate in different industrial sectors. This allows the overconsumption that burdens the planet to be better controlled and allows companies to further develop their operations, for example in terms of product sustainability, the utilization of side streams and the return of the material or product to circulation.

The beginning of the cabinet's product story is in a carpenter's workshop

A carpenter makes cabinets from wood. In a circular economy, the carpenter gives the buyer the opportunity to return the cabinets, which are painted or renovated as needed, and the cabinets are put up for sale again.

The carpenter can also dismantle the cabinets and use them largely as raw material for new products. The carpenter continues to use the large pieces of wood from the product cycle as raw material and saws parts of them into a storage cabinet. The storage cabinet can then be returned to the carpenter, who can either resell it or disassemble it again. Small side streams, such as surplus pieces and sawdust, can be used as energy for workshop heating.

If the product is not returned to the receiving producer or another supplier specialized in product recycling, but the consumer delivers it to a collection point, for example, the product's recycling potential decreases. In a circular economy, we therefore need specialized recyclers for all products and materials, who keep the products and materials in circulation and in the value chain for as long as possible.

Recycling center cooperation creates opportunities for symbiosis and service innovations

Let's continue the example by assuming that the carpenter and the recycling center are located in the same premises. This way, the carpenter gets other used wood products to use in addition to his own products. It is easy for consumers to bring or arrange for the delivery of the cabinet to the recycling center, which is the most likely way to make the chain work. The sawdust and other bio-based materials suitable for combustion generated by the carpenter's activities can be used as energy for two companies. Gradually, this synergy can develop into a cluster of circular economy companies specializing in wood materials, for example, that operate in symbiosis.

In our example, the development story could proceed in such a way that when a carpentry workshop owns various small machines, they could be rented to customers or the customer could come to work on their own projects in the workshop. The idea can be developed further, small courses in carpentry skills can be organized, the workshop and its surrounding partner companies can be offered as an attraction for tourists, the activities of the workshop and its surroundings can be videotaped for marketing purposes, or products can also be developed from the videos, even for international distribution. In the circular economy, there is power in cooperation, and the importance of networks and supply chains is emphasized even more.

Henri Miilumäki and Anne-Marie Tuomala

Henri Miilumäki is an engineering student at LAB University of Applied Sciences in the Sustainable Solutions Engineering degree program. He is interested in new solutions for sustainable development and the circular economy. firstname.lastname@student.lab.fi

Anne-Marie Tuomala is a lecturer in the Technology Unit at LAB University of Applied Sciences and she teaches circular economy and sustainable development. firstname.lastname@lab.fi

Photo: Emily Lee. Recycling center cooperation helps keep wood in its valuable use.