The Importance of Systems Thinking in the Circular Economy

Prof. Dr. Gordana Kierans, Partner at MGT OPEN and Grounded Press, Professor and Director of the Centre for Circular Economy at Shenzhen Technology University (SZTU), has over 20 years of business experience around the world. Through her experiences, she has recognized that for the circular economy to succeed, it requires – what she calls – four elements of success: business case, infrastructure, education and mindset

by Prof. Dr. Gordana Kierans | Sep 12, 2022

1. Why this topic belongs on the agenda of every company. Or to put it another way: Why is it worth it?

There are many arguments for the circular economy. Here is just one: In order to produce a product, a company must take resources from the earth. In most cases, it will probably purchase it from a supplier. If a company can reuse those resources, instead of ordering new materials again it can save money. (The saving occurs if there is an infrastructure in place that brings used products back.) For future generations, resources are preserved, and the environmental impact is reduced. Everybody wins.

2. What are the biggest challenges?

The biggest challenge is our mindset. We need to value resources again and see the work that went into their creation. We also tend to think in the short term, only about tomorrow’s advantage and not about the many disadvantages these solutions may bring the day after tomorrow, which compound like dominoes falling one on top of another. We need big-picture thinking and a collaboration of different stakeholders from different sectors. During the transition to a circular economy there will be losers, as in any major change. The timely recognition of their challenges is also important because, the sooner they are picked up, the less they will resist the circular transition.

3. How do you convince people who are still critical of the issue?

Resource scarcity and climate change are real threats to economic progress and are more palpable this year than ever before.

4. A thought leader or book/podcast to know about?

Books by Professor Walter Stahel

Dame Ellen MacArthur and her foundation

Confessions of a Radical Industrialist by Ray Anderson.

“Systems thinking must be applied, because it helps us understand how to build an infrastructure”

5. What are the key requirements for it to succeed and eventually become the standard?

Making a product more circular without the option of getting it back does not help, as these goods will be thrown away just like before. As mentioned before, systems thinking must be applied, because it helps us understand how to build an infrastructure. Plus, the education needs to become more interdisciplinary. Last but not least, it has to question some of the existing beliefs. The financial world is still watching and shying away from risks. Financing from the government and the private sector is required.