Innovation Drives Circular Economy in the U.S.

May 5, 2016


The circular economy offers businesses more efficient processes when it comes to resources and economy.

[Editor's Note: Andrew Morlet, CEO, The Ellen MacArthur Foundation, will provide keynote remarks at the 2016 Sustainability Conference, Better Business, Better World: Mainstreaming the Circular EconomyRegister here to learn more!]

In industrialized economies, growth is mainly fuelled by a one-way process, based on turning materials into products and selling these to consumers. Designing more efficient processes allows the use of smaller amounts of finite resources and energy whilst producing less waste, yet these strategies don’t really address price volatility issues, nor do they fully capture the opportunities offered by the technology revolution.

In contrast to our current linear approach, the circular economy is increasingly seen as an attractive way to overcome challenges and kick-start a new era of positive growth, but we need to show more clearly how to get there.

At the heart of the shift lies innovation, an attribute which has always been associated with the U.S. Digital technologies play an important role in the transformation, helping develop new business models - think for example of app-based sharing platforms that allow multiple revenue streams to be generated from one single asset. This revolution also opens up new manufacturing techniques, 3D printing only being the visible tip of the iceberg, as well as new ways of creating and managing materials: the economic horizon is expanding, but because value is not totally dependent on consumption of resources in this new model, the negative externalities can also gradually start to recede.

The circular economy is gaining momentum in the U.S. thanks to the opportunities it offers business. As our report Growth Within demonstrated, using the power of IT as an enabler for the circular economy in Europe can double the ‘business as usual’ gains, to $2 trillion (€1.8 trillion) per year by 2030. Given the similarities in their economies, it is easy to see this type of advantage also applying in the U.S..

The Ellen MacArthur Foundation last month launched the Circular Economy 100 USA (CE100 USA), a network of business leaders, academics, innovators, policymakers and city authorities with the shared objective of tapping into this potential. The new network provides a pre-competitive innovation platform that addresses the specifics of the U.S. market. The CE100 USA provides member organizations, which include SunPower, Tarkett and Wal-Mart Stores Inc., with unique collaboration, capacity building, and networking opportunities to help them achieve their circular economy ambitions more quickly.

I am confident that the U.S. will use its natural talent for capturing business opportunities to successfully move towards a new era of economic development.