CIRCULAR ECONOMY
Preferable Future Narrative for Services having Custodianship of Products From the perspective of a Product & Service design practitioner
Vinishree Solanki
MDes Design Innovation & Service Design Tutor: Dr. Paul Smith
2021 30th April, 6:30 am “I am waking up today to a degenerating world of chaos and crisis, that is at war with the planet. A sinking feeling lingers…has my generation failed? Here I am, truely concerned about the kids of today who have to bear the burden of our actions tomorrow. I nudge myself - wake up! It is time to join hands with all the thinkers, planners and doers who are making a collaborative effort towards creating a more planet-friendly-future.”
Introduction The change makers around the globe are working towards saving both, the ‘Planet’ and the ‘People’, by aiming for renewable and circular solutions. As a design practitioner, my concerns towards a sustainable future has led me to converge and diverge into the issue, lending to my transition from the field of product design to service design. Contemplating my role in transforming the systems inside a linear-product-based-economy to align towards a more circular-service-basedeconomy, it is imperative for me to understand the core theories of circular economy and how it applies to ‘Product as a Service’ model.
Process
Content Underlying Theories Circular Economy – Circular Business Models - Product as a Service
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Rethinking Business models Linear-product-based to Circular-service based
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Main statement Speculative Design of services having custodianship of products
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New Narrative Using Speculative Design toolkit
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Conclusion Speculative Proposal
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Bibliography
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Underlying Theories Circular Economy Circular Business Models Product as a Service
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Circular Economy A Circular Economy (CE) is one that is restorative and regenerative by design. It is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.[1] Although the post Industrial Revolution era influenced the world radically, yet led to immense unintended consequences leading to a degenerative planet and deteriorating life on it. It has driven the people to move beyond the take-make-waste linear model that is currently leading to extraction of materials and resources, and massive waste generation. Circular Economy aims at creating a closed loop economic system that is more sustainable and regenerative, maximizing the use of material and resources, reducing waste to cut down the environmental impact, and nurturing the natural ecosystem around us. It is a restorative approach of redefining the values of production and consumption through sharing, leasing, reusing, repairing, refurbishing, recycling, reducing and remanufacturing.
Diagram [1]: Circular Economy vision and approach
[1] CE definition and diagram source: Ellen Macarthur Foundation. Available at: https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circulareconomy
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Circular Business Model Circular Economy provides the framework for enabling the Circular Business Models (CBM) as a preferable roadmap for businesses offering to contribute towards circular strategies through product life cycle and value chain. The diagram below precisely demonstrates the different archetypes for Circular business models. One of the most impactful out of these CBMs is the Product as a Service (PaaS) addressing maximum touchpoints in the circular value chain. PaaS involves restructuring the product design and business model towards the goals of circular economy, by retaining the ownership of the product with the manufacturer.
A circular business model articulates the logic of how an organisation creates, offers, and delivers value to its broader range of stakeholders while minimising ecological and social costs. [2]
Diagram [3] Source: Accenture (2014)
[2] CBM definition source: Hofmann, F., Jokinen, T. and Marwede, M. (2017) Sustainability guide, Circular Business Models. Available at: https://sustainabilityguide. eu/methods/circular-business-models/ [3] CBM diagram source: Accenture. ( 2014). Circular Advantage: Innovative Business Models and Technologies to Create Value in a World without Limits to Growth. Available at: https://www.accenture.com/t20150523T053139__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/ Strategy_6/Accenture-Circular-Advantage-Innovative-Business-Models-Technologies-Value-Growth.pdf
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Product as a Service Product as a Service (PaaS) is a circular economy strategy that enables the manufacturer to sell the use or performance of the product as a service, thus providing a stronger incentive as owners of the product to prevent loss by minimizing waste. Product as a Service - Maintain product ownership and encourage responsible use and resource productivity throughout the full value chain [4] Products are used by one or many customers through a lease or pay-for-use arrangement. This business model turns incentives for product durability and upgradability upside down, shifting them from volume to performance. With a Product as a Service business model, product longevity, reusability, and sharing are the drivers of revenues and reduced costs. [5] Diagram [6]: Product as a Service Business Model
[4] PaaS definition source: Business Hub 4 Sustainability. Availabale at: https://bh4s.no/sustainable-business-model-archetypes/circular-economy-business-models [5] PaaS definition source: Accenture. ( 2014). Circular Advantage: Innovative Business Models and Technologies to Create Value in a World without Limits to Growth. Available at: https://www.accenture.com/t20150523T053139__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/ Strategy_6/Accenture-Circular-Advantage-Innovative-Business-Models-Technologies-Value-Growth.pdf [6] Diagram source: Goedkoop, M. (2016). SimaPro, Five ways to circular economy: Product as a service. Available at: https://simapro.com/2016/five-ways-tocircular-economy-and-lca-product-as-a-service/
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Product as a Service
Performance Economy
Reverse logistics, Life Cycle assessment and digital revolution play the key roles in mobilizing the circularity of materials and resources in the system where the producers retain the ownership of the product. Walter Stahel elaborates the underlying features of PaaS with case studies in his book with an entire chapter on ‘Performance Economy’ [7] Reverse logistics is the process of collecting and aggregating products, components or materials at the endof-life for reuse, recycling and returns. Reverse logistics, also referred to as “aftermarket supply chain,” closes the loop. Take-back programs, warranties and product defect returns all require reverse logistics to get the product from the consumer back to the manufacturer. [8] Life Cycle Assessment (LCA) is a quantitative evaluation to estimate potential environmental impacts across product or service life cycles, identifying any impact hotspots and providing a baseline to guide the reduction of impacts. [9]
Diagram [7] source: The Circular Economy A User’s Guide by Stahel, Walter R.
Life Cycle Assessment Model
Diagram [9] source: LCTLCA-and-transitioningto-a-Circular-EconomyLCANZ
[7] Diagram source: Stahel, W. (2019). The Circular Economy A User’s Guide. New York: Routledge [8] Reverse Logistics definition source: Circular Economy Practitioner Guide. Available at: https://www.ceguide.org/Strategies-and-examples/Dispose/Reverselogistics [9] LCA definition and diagram source: LCANZ, LCT, LCA and transitioning to a Circular Economy Available at: https://lcanz.org.nz/wp/wp-content/uploads/2020/08/ LCT-LCA-and-transitioning-to-a-Circular-Economy-LCANZ-July-2020-v1.6.pdf
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Rethinking Business Models
Linear-product-based to Circular-service based
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“If you think good design is expensive, you should look at the cost of bad design.” Ralf Speth, CEO of Jaguar Land Rover
Ignorance was bliss. As a product design practictioner I have pondered over how much emphasis I have laid on the performace, usability, aesthetics, cost and mass production of the product. In all my projects I tried to achieve the perfect balance of form and function. Somewhere I went wrong, as my perfectly designed and engineered products landed in the landfill in a few years.
Linear-Product-BasedEconomy This is the traditional way of production, consumption and disposal, where products are manufactured by various industries, sold to the consumers who use it over time and then discard the waste based on the community norms. Here are my observations as a product designer over some of the practical, critical and ethical concerns around the product design, development and its consumption post industrial revolution: - Consumer centered approach - Product is owned and consumed by the user, and thus the product design strategies are directed solely towards developing solutions for the benefit of the users. The team on the design, engineering and manufacturing side work with the single goal of solving the issue faced by the user, also ensuring that their solution is attractive for higher sales, neglecting the unintended consequences for the environment and the future of the planet. The long term impact of their design is ignored, with lack of planning for end of life of the product. - Products are designed without the notion of reuse, having only few components which can be recycled.
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Linear-Product-BasedEconomy - Products are designed for limited lifespan resulting in single use products or some expected to last for only 5 to 10 years. A good example is the electronic product domain which is designed to last maximum 5 years as the advancing technologies makes it redundant - The components are manufactured in different countries, and the assembly line is located in a different geographical region, thus leading to overuse of logistics - The packaging of the products due to its transportation across the globe is very robust, thus utilizing excessive material for packaging - Product and its waste is the responsibility of the user and eventually the local authorities involved in waste management. This reduces the scope of reuse, remanufacture and refurbishing and the products finally lands in the recycling centers or the landfills.
- Manufacturers are producing low quality and less sustainable products for catering to the global demands of cheaper goods - Profit driven economy – sales of product is linked to profit of the manufacturers. This also leads to wealth concentrations and inequalities in the society. - Mindless raw material extraction without the concern for replenishing the resources is resulting in ecosystem degradation. The small and medium industries are ignorant about the extent of their usage of non-renewable resources and get involved in malpractices by escaping the radar of the authorities and the local government.
- Product’s end of life stage is handled by unskilled workers/ rag pickers in most parts of the world, having no knowledge about the material’s properties of recyclability
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Circular-Service-BasedEconomy It is a paradigm shift in product ownership from the user to the producer that is expected to play an essential role in the circular economy framework. As a student of M.Des in Service Design, I can associate how this transition from a product to a service led economy will be valuable for its stakeholders, as well as prove its viability through economic, social and environmental benefits.
- Manufacturer is responsible for the product starting from the idea generation to end of life planning, thus the focus is on extending the life span or performance of the product
- Product is owned by the manufacturer and used by the people – through IoT, IoB and blockchain technology, the businesses can collect the behavior patterns of the users, monitor the performance, check the feasibility of the product and track its location
- End of product phase is the responsibility of the manufacture. This allows the government to better regulate the waste management system - The manufacturing setup will be more localized using local materials & resources to plan for reverse logistics
“The Performance Economy is profitable, ecologically and socially viable and induces innovation, but there is no sharing without caring.”
Walter Stahel, Author of The Circular Economy - A User’s Guide
Studying to be a Service Design practioner, I have a responsible role to play - design for inclusion, accessibility, equality and more importantly for the planet. It calls for an economic transition while caring about the environment, and intends a cultural shift for the people. 9
Circular-Service-BasedEconomy
- Life Cycle Assessment of the product will ensure more reuse, remanufacture, repair and recycle
- The shift in ownership of the product will reduce customer intimacy, binge shopping and hoarding, and thus will bring the product back in rotation in the economy - New Services added to the businesses – remanufacture and repair of products – enhances the scope for job creation Unintended consequences: - Users may overuse the service which may have a long term effect for example - using the Uber service for shorter trips which they could have easily walked down or cycled down Product as a Service (PaaS) Examples:
Diagram [10]: Performance Economy Business Models
Xerox is one of the earliest and most prominent companies which sell photocopies rather than the photocopier machine. Koppert is a pesticide company which switched to selling a pest-free crop is another successful example. Philips is leading the way in the lighting industry by changing from selling lamps to selling the lighting experience. They are already many thriving car -sharing companies like Uber paving way for more transitions. [10] Diagram source: Stahel, W. (2019). The Circular Economy A User’s Guide. New York: Routledge
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Main Statement
Preferable future narrative for services having custodianship of products
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Evaluating the Statement While evaluating the business model of ‘Product as a Service’, I came across many questions which I could map against the three major scales of value that this transition might raise. Since the PaaS business model is still at its nascent state, it is essential to speculate its impact on the economy, society and the environment in the long term. While brainstorming the consequences of PaaS for this project, the question raised here helped me to hypothesize the context more holistically.
Economic Scale
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Social Scale
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Environmental Scale
Think Economy
Think Society
Think Environment
What it means for the industries/ businesses? What are the opportunities to the businesses? What it means for the delivery system? Is reverse logistic a new area of intervention? What role will technology play in supporting the business? What is the extent of infrastructural change anticipated?
What it means for the People? Are the people emotionally ready to care for the products? What is the cultural shift required? How will it affect customer intimacy with the product? How will it improve the living? Will it ensure inclusivity and equality? How can we make this a more accessible business model?
What it means for the Planet? Will it safeguard bio diversity? Will it ensure sustainable well being? Will we be able to replenish with the speed that we have extracted? How can the nature support this transition? Will it create more environmental mindfulness?
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Speculative Design Direction Geared towards creating a speculative narrative for Product as a Service (PaaS) as a preferable business model for a circular economy, I took the speculative design direction to pursue the topic further. “[Speculative design] thrives on imagination and aims to open up new perspectives on what are sometimes called wicked problems, to create spaces for discussion and debate about alternative ways of being, and to inspire and encourage people’s imaginations to flow freely. Design speculations can act as a catalyst for collectively redefining our relationship to reality.” [11] Extrapolating the strategy of Product as a Service on the scale of TIME might lend us a future roadmap of a circular reality. Under the lens of preferable future for PaaS, we can filter what we want to see happening and what we don’t want. Speculative design is an incredibly useful design tool for social dreaming while addressing bigger issues in the world. Diagram [11]: Preferable Future
[11] Speculative Desig definition and Diagram source: Dunne, A and Raby, F. (2013). Speculative Everything: Design, Fiction, and Social Dreaming. Cambridge: The MIT Press.
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Main Statement
How might we create a preferable future narrative for services having custodianship of products that benefits the businesses, people & planet?
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New Narrative
Using Speculative Design Toolkit
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Who are the Future Enablers? Kicking off with the speculative design process, I started with identifying the future enablers who will initiate and mobilize the transition of linear-product-based-economy to a circular-servicebased-economy. It was essential to consider the changemakers who will create the future policies, the builders of the roadmap for transition, new collaborations, the players with the money and the experts from varied industries who will guide the process. Approaching this subject from the perspective of speculative design, I chose to pursue it further by including the voices of industry experts in – Technology, Design & Business. I went ahead and planned an online participatory design workshop with these industry experts, considering speculative design tools as engagement exercises.
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Who are the Future Enablers? This Participatory Design Workshop was designed for speculating the future scenarios where businesses will have the custodianship of products. The aim was to co-speculate the transition of the economy from a linear-product based model to more circular-service-based. In particular we looked at how a Product as a Service (PaaS) business model will look 30 years from now, discovering together while rethinking the ownership model for a more circular economy. Project Link Online Participatory Workshop: https://miro.com/app/board/ o9J_lPotfFM=/
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Reimagining Future Scenarios Speculative Design Engagement Tool 1
In order to compose imaginable future scenarios, envisioning the ‘Product’ as ‘Services to be used/performance’ is the first step. The first engagement tool made the participant to reimagine the products around them as a service and collectively vote for the one that they think is relevant in the next 30 years. The example given to the participant showed how the medical products can be transitioned into a service which provides well-being, protection or safety of one’s health. The participants mutually agreed on the fact that hygiene products are lacking in innovation, are a major source of waste which goes into landfills, and lack a sense of responsibility from both the user and manufacturer’s end. The hygiene products here included the sanitary pads, baby & adult diapers, toilet paper rolls and even personal hygiene products like sanitizers, wipes, toothpaste, shampoo and soap.
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Factoring TIME (2030 – 2040 – 2050) Speculative Design Engagement Tool 2
Considering Hygiene products will be transitioned as a service in the next few years, the participants delved further into enquiring its production, consumption and impact in the next 30 years. The next engagement tool was a timeline which questioned how they foresee the ‘Hygiene’ as a service in the near future. The participants were asked to reimagine the future of their selected service mapping them against the following two questions: What you want to see? What you don’t want to see?
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Factoring TIME (2030 – 2040 – 2050) Speculative Design Engagement Tool 2
This exercise revealed some thoughtful insights such as an aspiration of a preferable future with zero waste production, strong directives & regulations, and scope for innovation in bio-design. This timeline also indicated the not-so preferred directions which needs to be considered as the challenges for example water crisis impacting hygiene, another pandemic related to hygiene, impact on animals leading to their extinction, as well as the uncontrolled filling up of landfills. The below board with images and text as additional cues were provided to the participants to assist in co-speculating the timeline on the previous page.
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Future Wheel
Speculative Design Engagement Tool 3 A complex scenario comes with multifold consequences. Future Wheel is a great tool for widening the perspective and extending the ability to map and recognize these repercussions. The image here illustrates the principles behind the Future Wheel mapping method. The illustration on the next page depicts the discovery and mapping of the consequences of the phenomenon of ‘Product as Service’ as the main driver of the economy. I have used the Future Wheel mapping strategy to demonstrate various orders of consequences and the relation between them. This wheel helped me to see the emerging intended and unintended consequences in a future scenario when Paas is implemented across different industries and businesses. Mapping the consequences in the order of magnitude is highly instrumental in speculating and widening the perspective around PaaS.
Diagram [12]: Future Wheel mapping Method
[12] Diagram source: Börjesson, M. (2020) Uncertain Futures. Available at: https://www.futuramb.se/blog/quick-course-in-mapping-coronavirus-consequencesusing-futures-wheel/
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Future Wheel
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Future Wheel
Speculative Design Engagement Tool 3 As explained earlier, these consequences were mapped critically against the parameters of economic, social and environmental impact in the long term. Since ‘Product as a Service’ requires the manufacturer to retain the ownership of the product. One of the direct consequences is that the manufacturer will hold more responsibility of the product lifecycle & have all the control of the product and its embedded materials and resources. Forecasting the second order of this consequence led to further ones, that is it will create means of reverse logistics, product life cycle assessment will play a crucial role in planning for minimizing waste and the products will be designed for remanufacture of components. Additionally, the manufacturers will be supported by incentives from the policy makers for increase in resource productivity. Extrapolating to the next order of its impact revealed many more repercussions. Adding reverse logistic services and remanufacturing of components will give a boost to set up more local businesses and increased operational efficiency. Life cycle assessment for minimizing waste and additional incentives will create a demand for locally available resources in terms of materials, man power and know how. Restructuring of global production patterns with more focus on decentralizing manufacturing and redefining the global supply chain maybe some of the outcome of this transition into a circular service based economy.
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Future Wheel
Speculative Design Engagement Tool 3 This engagement tool used the above map (page 22) with some unintended consequences mapped as an example in red circles. The participants were asked to study this map and further pin point the unintended consequences which they could speculate in the future, inside the red circles. The red circles shown here are the unintended consequences mentioned by the participants such as an excessive use of local resources might lead to their shortage in the future. For example the geographical location of an area may not offer access to enough raw materials to be extracted round the year. Another unwanted impact could be increase in the price of products especially in the luxury segment when the ownership of the product shifts to the manufacturers.
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Preferable Future Statement
Speculative Design Engagement Tool 4 By this time the participants had a heightened sense of understanding about speculating the Hygiene products as a service and the repercussions of it for people, businesses and environment. The next engagement tools enabled the participants to speculate a future narrative with an ‘I’ statement.
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Speculated Narrative Desire for a better, kinder and greener future motivated the participants and me to define the roadmap for ‘Product as a Service’, engraving some key expectations into its framework. I hereby elaborate few of these aspirations for a preferable future for ‘hygiene’ as a service: - Redefining product development strategies for extended life of the product, maybe even extend the utility of the product till the embedded material is intended to last
“I believe in a preferable future...
- Creating new third party business models that extensively work in waste management, such as a specialist in hygiene products waste management - Collaboration between manufacturers and consumers to share the responsibility of the products and its waste - Building local or community recycle systems for hygiene products - Reducing inequality by offering basic necessity products as service available and accessible for everyone. Imagine a future where hygiene as a service is accessible by one and all across the world. Yes, a great thought to pursue further as a future enabler! - Reimagining a future where the businesses along with the Governments and consumers work with the sole conviction of manufacturing 100% recyclable products. Envision a scenario where all hygiene product packaging is 100% reused or recycled.
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Conclusion
Speculative Proposal - Key Takeaways
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Conclusion
As a practitioner of product design and embarking the role of a service designer, it is imperative for me to understand the implications of the linear model and how it can be changed into an effective circular business model through interventions at various touch points. While ‘Product as a Service’ has a key role in the proposed circular business models, it has emerged as a potential circular economy proposition having immense benefit for economy, society and the environment. The desk research evaluates this transition of economy from a product-selling to a service-selling model through investigation into various academic writings in this domain. By speculating the future of PaaS for next 30 years and mapping it against various parameters throughout the participatory workshop has demonstrated the expectations in the preferable future. Additionally, mapping the future of PaaS has thrown light on the varied unintended consequences that might act as crucial considerations for businesses orienting towards having full ownership of their products. The speculated narrative presented towards the end of the project illustrates the future roadmap for ‘Product as a Service’ with few proposals for businesses to implement while ensuring a favorable impact on the economy, society and environment. A key indicator of progression towards a circular economy. The different facets of PaaS presented in this project can be further elaborated to create an advanced framework for businesses, enabling their smooth transition from a ‘product’ selling to a ‘service’ selling model.
A practitioner’s perspective of preferable future: 2050 30th April, 6:30 am “I have woken up today in a regenerative world that cares for the planet and its co-inhabitants. My actions towards making our planet livable is supported by businesses and people, and empowered with policies that enables sustainability and circularity in its true sense.”
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Bibliography
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Bibliography Books & Journals Stahel, W. (2019). The Circular Economy A User’s Guide. New York: Routledge. Dunne, A and Raby, F. (2013). Speculative Everything: Design, Fiction, and Social Dreaming. Cambridge: The MIT Press. Braungart, M and McDonough, W. (2002) Cradle to Cradle: Remaking the Way We Make Things. New York: North Point Press. Raworth, K. (2017). Doughnut Economics Seven Ways to Think Like a 21st-Century Economist. London: Random House Business Books. Thackara, J. (2015). How to thrive in the next economy. London: Thanmes & Hudson.
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Bibliography Electronic Resources Ellen Macarthur Foundation. Available at: https://www.ellenmacarthurfoundation.org/ Hofmann, F., Jokinen, T. and Marwede, M. (2017) Sustainability guide, Circular Business Models. Available at: https://sustainabilityguide.eu/methods/circular-business-models/ Accenture. ( 2014). Circular Advantage: Innovative Business Models and Technologies to Create Value in a World without Limits to Growth. Available at: https://www.accenture.com/t20150523T053139__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/ Documents/Global/PDF/Strategy_6/Accenture-Circular-Advantage-Innovative-Business-Models-Technologies-Value-Growth.pdf Business Hub 4 Sustainability, Circular Business Models. Availabale at: https://bh4s.no/sustainable-business-model-archetypes/circulareconomy-business-models Goedkoop, M. (2016). SimaPro, Five ways to circular economy: Product as a service. Available at: https://simapro.com/2016/five-waysto-circular-economy-and-lca-product-as-a-service/ Circular Economy Practitioner Guide. Available at: https://www.ceguide.org/Strategies-and-examples/Dispose/Reverse-logistics LCANZ, LCT, LCA and transitioning to a Circular Economy Available at: https://lcanz.org.nz/wp/wp-content/uploads/2020/08/LCT-LCAand-transitioning-to-a-Circular-Economy-LCANZ-July-2020-v1.6.pdf Börjesson, M. (2020) Uncertain Futures. Available at: https://www.futuramb.se/blog/quick-course-in-mapping-coronavirusconsequences-using-futures-wheel/
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