The Circular Economy Sector

DRAFT

Defining the Circular Economy sector has been the greatest challenge for Economic Development practitioners. Although the Circular Economy model explains the activities that need to take place to increase regional circularity, attracting or emulating Circular Economy businesses becomes cumbersome without the proper data that categorizes activities according to a respective industrial sector.

Some scholars have attempted to use proxies to analyze the Circular Economy. Peter Mitchel, for example, has looked at circular economy activities in the repair, waste and recycling, and rental and leasing sectors to compare job levels as the European economy used fewer materials. ‘To map for the employment indicator, re-use employment is proxied by employment in the retail of second hand goods sector, employment in repair activities by employment in the repair of machinery and equipment sectors and the repair of electronic and household products sector, closed & open loop recycling activity is proxied by employment in the wholesale of waste and scrap sectors and the waste and recycling sector, and for circular economy activity relating to servitisation jobs are proxied by employment in the rental & leasing sectors’ [1].

The study mentioned above is very comprehensive, but it ignores activity in the remanufacturing sector, which is an integral part of the Circular Economy model. Robert Lund has taken the biggest step to creating and updating the database of US and Canadian remanufacturing industry for over 30 years, but he also struggled to define how specific businesses impacted overall circularity [2]. The database also fails to determine the Reverse Logistics activities, which are an integral part of the Remanufacturing process.

Each industrial sector poses different challenges to the Circular Economy due to differences in material and chemical composition, level of technological advancement, and the state of the supply chain. Since a Zero Waste region is not feasible and many sectors will never reach 100% circularity, it is important to analyze the level of reuse, repair, and remanufacturing that takes place across different sectors separately.

Based on a study that took place in consultation with the European Commission, the following products and sectors are identified as priorities to increasing circularity [3]:

  • Packaging
  • Food
  • Electronic and electrical equipment
  • Transport
  • Furniture
  • Buildings and construction

Since much of the manufacturing infrastructure has fled abroad, many regions will remain constrained in their ability to impact circularity. However, analyzing business patterns and employment levels allows Economic Development practitioners to determine which regions are able to take the lead in Zero Waste goals based on their industrial composition.

[1] ECONOMIC GROWTH POTENTIAL OF MORE CIRCULAR ECONOMIES

[2] The Remanufacturing Database

[3] Scoping study to identify potential circular economy actions, priority sectors, material flows and value chains

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