Article by: Asst.Prof. Suwan Juntiwasarakij, Ph.D., MEGA Tech Senior Editor
Undoubtably, the platform economy has made life easier. Equity crowdfunding and peer-to-peer lending connect investors directly with those needing capital. On-demand digital marketplaces empower buyers, sellers and renters. The share economy injects more employment flexibility into the workforce than ever before, and digital ecosystems provide users with unprecedented access, opportunity, information, and choice.
Business model of the sharing economy
At the heart of the platform economy is simple ambition to democratize economic power and give people more financial freedom and flexibility. Moreover, digital platforms also democratize consumption. The sharing economy 2.0 is removing single-asset ownership as we know it. Driving this economic evolution is a post-ownership generation of users who are not looking to accumulate and will likely grow up with co-working and co-living as the norm.
Outline of a circular economy
Circular economy, however, is not a new concept. The movement has since initiated 1970s. In a circular world, materials are part of cycle and energy comes from renewable sources. Circularity therefore requires both a material and energy transition. A circular economy is an alternative economic model that involves decoupling economic activity from the consumption of finite resources.
The movement and the concept of a circular economy
A circular model means using resources efficiently and prioritizing renewable inputs, maximizing a product’s usage and lifetime in order to extract the maximum value, and recovering and reusing by-products and waste to make new materials or products. It is about responsibly managing the flow of renewable resources and the stock of finite materials.
Ten types of innovation framework
Digital circular economy framework
According to Deloitte’s analysis, there is a clear connection between the two trends: digitalization and circular economy. That is, digitalization can help drive a transition towards circular business in a variety of ways since the digitalization enables circular economy innovation quite frequently. Innovation around circular economy seems to be less disciplined and strategic than digital innovation, which is highlighted by the lack of large-scale, disruptive digital circular transformations. Such large-scale innovations require drastic changes to business models: e.g. from selling products to selling services.
Worldwide adoption of circular economy
In the meanwhile, a number of private and public organizations have already undergone circular economy initiatives worldwide. According to PWC’s analysis, businesses that mange to radically innovate to create new business will become the winners of tomorrow as circularity becomes the “new normal.” Also, companies adopt a circular approach, want to contribute to reaching the United Nations’ Sustainable Development Goal (SDGs). This is the moment to embrace a circular way of thinking. Citizens and companies alike are seeking to radically change the way our economic model operates today.