Over the next few decades, global demand for limited resources could exceed the earth’s capacity by 400 percent. The corresponding economic impact will be severe, with global price volatilities and supply chain interruptions leading to as much as US$25 trillion in total lost global economic growth by 2050, according to global consulting firm Accenture Strategy.

The solution may lie in the circular economy. Unlike our current linear economy — in which products are manufactured, used, and then disposed of — in a circular economy, products are designed and made to be reused or recycled at the end of their useful life. This way, they retain value, reduce waste, and eliminate the need for non-renewable raw materials in the manufacturing process.

“The circular economy is about shifting traditional resource and pollution challenges into opportunities,” says Mike Wilson, Executive Director of the Smart Prosperity Institute. “Instead of seeing these as a waste problem, it’s about retaining the value of products and materials through closed production and consumption loops.”

Circular economy brings tangible benefits

Circular economy strategies in Europe have created jobs by leveraging innovations and new technologies for economic growth. These strategies improve business competitiveness by mitigating the risks of price volatility and supply uncertainty, creating new revenue streams, increasing efficiency, enhancing market differentiation, and strengthening relationships with customers.

“Every company is looking at ways to decrease waste, whether it’s energy, productivity, or materials,” says Scott Vaughan, President and CEO of the International Institute for Sustainable Development. “By implementing circular systems, companies can significantly lower materials waste, while pulling out previously untapped value.”

Adoption of circular principles ripe with opportunity

Although Canada has yet to see the type of integrated, comprehensive circular economy strategies and collaborations that have been critical to the success of economies elsewhere, research about the promise of the circular economy is emerging. A study on the impact of increasing waste diversion in Ontario found it boosted the province’s GDP and created 13,000 full-time jobs.

Tangible examples are emerging in Canada’s business community as well. IKEA Canada has been actively promoting its circular economy file. Last year it struck a partnership with Setsuné Indigenous Fashion Incubator, a Toronto-based social enterprise, to create a handmade collection created entirely from IKEA textiles that had been salvaged.

“Average Canadians can engage in this [circular economy] process through the products that we demand,” says Wilson. “The recent movement around plastic straws serves as a demonstration of how consumers can act themselves — but it needs to permeate the economy to be truly transformational.”