Circular economy business models in developing economies: Lessons from India on reduce, recycle, and reuse paradigms

Abstract

According to the UN Sustainable Development Goals in 2016, the demand for resources will require natural resources equivalent to two and three planets by 2030 and 2050, respectively. The linear economic model driven by a “take‐make‐dispose” philosophy is unable to manage the demand and supply balance in consumption of natural resources. This imbalance is affecting the sustainability of the countries and enterprises as well as affecting the global supply chain leading to socioeconomic and environmental risks and volatility. Realizing the future resource scarcity challenge, the current linear economy model is giving way to the circular economy model. The circular economy model focuses on careful alignment and management of resource flows across the value chain by integrating reverse logistics, design innovation, collaborative ecosystem, and business model innovation. This article examines how circular model is pushing the companies in developing economies like India to design and implement business models that are based on reduce, reuse, and recycle paradigms.