During the latter weeks of 2015 the European Parliament held talks on the importance of developing manufacturing business models that supported a sustainable economy. These talks have now been supported by genuine action in the form of a significant financial injection of cash to develop a circular economy. The EU has now indicated that it is determined to create a circular economy for the benefit of the environment and the citizens of all European countries and for the benefit of the whole world.

What is a circular economy?

A circular economy is one where manufactured products are designed so that there are no damaging waste products once the item is no longer useful or functioning. It means that components of a electrical and electronic items, in particular, are easily repaired or, if not repairable, can be easily removed for re-use in new products. Many electronic gadgets contain valuable metals and other raw materials which should be retained within the manufacturing cycle instead of being discarded both as a cost-effective measure for good business and also as a measure that is eco-friendly.

The European Investment Bank (EIB) and the European Commission are contributing €24 billion of cash to companies that set up a business model that designs products with the circular economy in mind.

The current "make-use-discard" business model that has been in use for decades is now increasingly unviable from a financial perspective but is also contributing to a growing issue, especially with Waste Electrical and Electronic Equipment (WEEE). To combat the problem the European Union has put in place a directive covering waste regulations about how WEEE recycling is carried out. The UK and USA have followed suit with their own versions of the WEEE regulations.

This essentially means that organisations (whether they are small businesses or major corporations) that are prepared to research new manufacturing methods, new designs that eliminate the majority of waste and items that use innovative and eco-friendly raw materials will benefit financially from doing so. Consumers are increasingly demanding reliable, hard wearing products that they do not have to replace on a regular basis; items that can be easily repaired, if necessary, and are designed in such a way that they are not out-of-date soon after they are bought. This requires a change of mindset both from the consumer but, more importantly from the designers who need to think about creating goods that have lasting appeal; classic designs that stand the test of time as well as regular use. In many ways a return to former years when products were of a more substantial quality.

This is particularly true of electrical and electronic equipment that currently have a very low life expectancy of only a few years and use a business model that means it has become cheaper and easier to throw an item away than to have it repaired.

It is important that all businesses start to make the changes necessary to move towards a circular economy that wastes less in terms or raw materials and energy consumption and creates sustainable growth for the future.