Meaning and importance
The current linear economic model is based on the manufacture of products, components and parts and their sale to a consumer. After consumption, it is up to the consumer to dispose of the product. This kind of scenario provides no incentive to think about extending the lifespan of the products or about what to do with them at the end of their life cycle. The circular economy therefore requires business models that help to preserve the value of the products and materials as much as possible. In addition, they should promote the closing of cycles so that our economic growth is no longer dependent on the extraction of raw materials.
Three generic business models are proposed in the literature:
- A model that maximises the efficiency of raw materials during the design or manufacturing phase of the product (principles of prefabrication, modularity, industrialisation, etc.)
- A model that focuses on the delivery of a service rather than a product during the use phase of a product (light-as-a-service principle and variants)
- A model that allows value to be created from waste during the post-consumption phase (principle that waste becomes a raw material)
These business models require a different approach. In addition, to be successful, all parties in the value chain need to work together: designer, suppliers, service provider, contractors, etc. The tendering approach and the way the construction process is organised must therefore be sufficiently aligned to this. The tendering strategy therefore has an important influence on an increased chance of success at achieving high circular ambitions.
Finally, the way in which costs are viewed also plays an important role. In circular construction, the entire lifespan of the building is taken into account, while the cost estimate is still too often limited to the initial construction cost. Therefore, you might want to carry out an LCC (life cycle cost) analysis for a construction project. This will enable costs such as maintenance, replacements and minor renovations to be taken into account and demonstrate the added value of circular solutions that are adaptable and future-proof.