The purpose is to generate a positive impact on the economic and financial side of companies, but without damaging the environment.
The current context of humanity requires a transition from the linear economy, which basically consists of “take, make, and dispose,” to a circular economy, a regenerative system articulated socially, economically, and environmentally to maintain the value of resources and reduce both the input of materials and the output of waste.
But how can we build a business in the circular economy?
According to Eduardo Aguiñaga, Director of the Master in Business Management at Tecnológico de Monterrey’s EGADE Business School, the circular economy is an industrial system that is restorative or regenerative by intention and design.
When taking part in the discussion “Circular Economy Entrepreneurship” at INCMTY, Tecnológico de Monterrey’s entrepreneurship platform, he said that the circular economy is a business model that decouples economic growth from income generation or resource extraction.
“It’s about generating a positive impact on the economic and financial side of companies, but without damaging the environment.”
He said that the circular economy should go beyond the traditional sustainability strategies often used by companies, entrepreneurs, and governments, and this circular economy system should be seen as a business model.
Aguiñaga pointed out that business models stemming from a circular economy perspective must be inclusive, competitive, and environmentally responsible and resilient.
According to Carlos Scheel, Professor Emeritus at EGADE Business School, the circular economy has many benefits and is very important because “it can help reduce 45% of total greenhouse gas emissions.”
Certain organizations such as the International Labour Organization and the Economic Commission for Latin America and the Caribbean believe that the circular economy could generate 4.8 million net jobs by 2030. And it has huge potential for sustainable reconstruction after the Covid-19 pandemic.
What’s more, this type of economy offers the opportunity to install new infrastructure and adopt technologies that are specific to Industry 4.0, which could save between 70 and 90% of new material use.
Scheel pointed out that circular economy entrepreneurs must break the linear innovation paradigm, opt for circular business model systems, and turn themselves into leaders who create conditions and systems.
In order to do this, they need to specialize in unusual processes to become systemic and circular entrepreneurs who generate sustainable wealth.
The purpose of starting unusual new businesses is to transform an idea related to a problem, or a non-linear business initiative, into a circular business system of sustainable and extended value, which is financially profitable, has an attractive market, and is designed to participate in an economy aligned with the country’s sustainable growth.
Scheel said that in order to achieve this goal, new entrepreneurs must have the following characteristics: