Circular and Linear Economy: the key differences for a sustainable future

What are the main differences between the linear economic model, based on intensive use of resources, and the circular economic model, based on maximizing the value of materials used? Let's look at it in this article

Simone Tabellini per Sfridoo

Simone Tabellini

Green Marketer

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Under the linear economy, the production of goods generates waste that is discarded without being reintegrated into the production cycle.

In contrast, the Circular Economy aims to eliminate waste generation by pursuing a production process that is based on sustainability.

Why do we need to create more circular systems?

Growing awareness of the negative impacts of the linear economy, which is based on a mode that predicts the production, use and disposal of products, has led to an urgent need to adopt more sustainable economic models.

The Circular Economy represents one such sustainable solution, as it aims to reshape the production system and create a more efficient, resilient and environmentally friendly economy.

In fact, to name a few benefits of circular systems we have:

  • a more extended product life cycle, in which the aim is to maximize the use of the resources used;
  • less exploitation of virgin raw materials and greater reuse of existing materials;
  • more optimal waste management and a reduction in the quantities produced, which allows for reduced impact on the environment, for example, avoiding landfilling or waste-to-energy;
  • greater collaboration between companies, which can create business synergies, reducing costs on their own production waste.

Before seeing the differences, however, it is necessary to understand what Linear Economy means and what is meant by Circular Economy.

Linear Economy: the traditional model based on consumption and waste

Infographic that says: Within linear economic systems, resources are extracted, consumed, and disposed of as waste, generating significant environmental impact, severe social inequalities, and loss of biodiversity

Linear Economics is an economic model based on a traditional view of production and consumption.

Under this approach, natural resources are extracted for the production of goods, which are then used and finally disposed of as waste. This process is referred to by the technical term Cradle-to-Grave.

The main features of this system are:

  • mass consumption orientation;
  • the large-scale production;
  • the design of products for a short life;
  • the management of waste through landfilling or incineration.

Problems and Limitations of Linear Economics

The Linear Economy presents several problems that pose significant challenges to the environment and society.

The main problem is the massive consumption of natural, often nonrenewable resources, which can lead to rapid depletion of those resources.

In addition, the linear model generates large amounts of waste, which causes environmental pollution.

At the same time, the linear economy can create social inequality, concentrating wealth and opportunity in the hands of a few, thus increasing inequality between different social classes.

Finally, intensive extraction of natural resources can cause habitat destruction, biodiversity loss, and water and soil pollution.

In summary, the Linear Economy is based on a model of production and consumption that is no longer sustainable to date and that must be changed by initiating circular transition processes, starting with businesses.

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Do you want to make your production processes circular?

With Sfridoo® you transform your processes from linear to circular, reaping economic, fiscal and environmental benefits through the principles of the Circular Economy and collaboration with other companies in the network.


Circular Economy: a holistic view of resource use

The Circular Economy (CE) is an economic model that aims to rethink and redesign the way we produce, use, and manage resources.

For this reason, if for the linear economy we use the term “Cradle-to-Grave,” for the Circular Economy we use the term “Cradle-to-Cradle”.

EC is based on the principles of reduce, reuse, recycle and repair to maximize the value of resources and reduce environmental impact.

The goal of this system is to create processes in which materials and products retain their value for as long as possible and by fostering the creation of continuous life cycles for resources.

Benefits of the Circular Economy for Businesses

The Circular Economy offers numerous advantages and benefits for both businesses, chief among them stimulating an innovation mindset, creation of new market opportunities and improving operational efficiency.

In addition, the implementation of circular strategies of enables:

  • reduce raw material procurement costs;
  • minimize the risks associated with their raw material availability;
  • increase the resilience of supply chains;
  • generate new jobs in the sector;
  • create new services related to recycling, repair and resource management activities;
  • reduce the extraction of natural resources;
  • decrease waste generation and greenhouse gas emissions;
  • promote energy efficiency.

To summarize, investing in Circular Economy models promotes not only economic sustainability, but above all environmental and social sustainability.

Circular and linear economy: the main differences

 infographic that says: The linear economy generates waste with no possibility of reuse, while the Circular Economy aimsto eliminate waste and promote a sustainable production process. The Circular Economyis based on a continuous cycle planned in advance to maximize the useof resources

Now that we have a general understanding of what a linear economy entails and its associated problems, and we have delved into the meaning of a Circular Economy and its advantages, it is time to highlight the main differences between these two models.

Today, it is crucial to grasp the distinctions between a linear economy and a Circular Economy, especially for those looking to initiate or improve a production activity.

Understanding the disparity between the traditional approach of a linear economy and the sustainable philosophy of a Circular Economy is particularly advantageous.

In a linear economy, the production of goods typically generates waste or scraps that are often disposed of without the possibility of reuse. On the contrary, the Circular Economy aims to eliminate these wastes, promoting a more environmentally sustainable production process.

For instance, let’s consider a farmer who harvests, packages, and sells vegetables. The consumer uses the product and subsequently discards the packaging materials and leftovers.

In this case, the farmer follows a linear approach, without considering the Circular Economy. Their economy has a beginning, production, and end, with wastes that are not reused.

In contrast, the Circular Economy is based on a continuous cycle that begins with production, moves through product consumption, and ultimately reaches recycling and conscious reuse for the benefit of the environment.

All of this is planned in advance before the start of the production process. Let’s delve into the details to better understand how to proceed.

Product Life Cycle

In a linear economy, products are conceived, produced, used, and then disposed of as waste. In this system, design is geared towards a short lifespan.

In contrast, in the Circular Economy, a longer life cycle approach is adopted, designing products that can be repaired or regenerated.

The aim is to maximize the use, reuse, and recycling of materials to extend their useful life.

Resource Exploitation

The linear economy relies primarily on the extraction and use of virgin raw materials, leading to intensive exploitation of natural resources and consequently high waste production.

Materials in this system are literally exploited, extracted, processed, consumed, and discarded, causing severe environmental damage.

Conversely, the Circular Economy aims to reduce dependence on virgin resources and promote the circular use of existing materials.

By maximizing resource utilization, the quantity of waste is also reduced. If managed correctly in accordance with regulations, waste can be used as secondary raw materials or byproducts in other production processes.

Waste Management

In the linear economy, products become waste once used and are disposed of.

Within this system, the most impactful waste disposal methods are employed, such as landfilling and incineration.

On the contrary, the Circular Economy promotes the adoption of more sustainable waste management practices based on the recovery, reuse, and recycling of materials.

In fact, these models bring about an important paradigm shift, creating ecosystems where waste is seen as a resource for business.

Economic Models

The linear economy is based on a linear production and consumption model, where the primary goal is the production of new goods and encouraging consumption practices.

This model has led to significant economic growth and social prosperity in previous decades, but today it is unsustainable for our planet.

On the other hand, the Circular Economy proposes a circular economic model, where materials and resources are kept in a continuous cycle of use and regeneration.

In this case, there are two main favorable economic indicators for businesses:

  • reducing costs for waste disposal;
  • profit or lower costs due to the buying and selling of production waste.

Furthermore, the Circular Economy fosters the emergence of new circular business models such as Product as a Service (PaaS), where the focus is on the service rather than the product, Software as a Service (SaaS), Machinery as a Service, and Mobility as a Service.

Pulsante: valorizza ora i tuoi scarti aziendali Pulsante: Valorizza ora i tuoi scarti aziendali

Do you want to make your production processes circular?

With Sfridoo® you transform your processes from linear to circular, reaping economic, fiscal and environmental benefits through the principles of the Circular Economy and collaboration with other companies in the network.


Collaboration and Synergies

The linear economy often relies on isolated and competitive approaches among businesses.

Companies operating in different markets see selling to their customers as their sole focus.

Conversely, the Circular Economy promotes collaboration and synergy among businesses, adopting models that follow the principles of Industrial Symbiosis.

In these models, a second opportunity for profit or savings is generated for companies, which involves the procurement or sale of waste materials or resources useful to another company or another supply chain.

By sharing materials, energy, infrastructure, and knowledge, businesses can create synergies that generate multiple business opportunities.

Design Approach

The linear economy primarily focuses on a design typical of early production models, where the output of an industrial process was an object whose sole purpose was to meet customer demand.

Today, thanks to the Circular Economy, it is becoming necessary to design goods with circularity in mind, known as Eco-design.

Eco-design allows for the creation of products that are easy to disassemble and recover, thereby extending their useful life and reducing environmental impacts.

Consumer Engagement

In the Linear Economy, consumers are primarily passive purchasers of products.

They are seen as subjects to whom products are promoted through marketing activities, leading them to spend their money.

In the Circular Economy, consumers are actively engaged. This is referred to as “prosumers,” individuals who consume but also consciously choose the products to purchase.

Today, consumers are more sensitive to sustainability decisions made by companies, which businesses can no longer ignore.

Business and communication strategies must be based on active customer engagement and transparent communication.

Environmental Impact

The linear economy leads to increased resource exploitation, resulting in greater waste generation and pollution.

Millions of tons of waste are produced each year, with the majority not being recovered and therefore disposed of in an impactful manner by businesses.

The Circular Economy aims to reduce or eliminate this environmental impact.

Starting with resource efficiency, greenhouse gas emissions released into the environment are reduced, thus reducing the environmental impact of production processes.

Economic Sustainability

The linear economy, being dependent on natural resources, which are limited, is subject to fluctuations in market prices for raw materials.

This uncertainty leads companies to have no control over costs and therefore unable to make their processes economically sustainable.

However, the Circular Economy partially overcomes this problem.

By using materials already present in the system, companies partially counteract the increase in prices.

Furthermore, thanks to the introduction of eco-innovative solutions, various new economic opportunities arise, such as circular business models and new job opportunities.

Social Impact

The linear economy contributes to some extent to exacerbating social inequalities.

Greater waste production can harm vulnerable communities that are victims of unregulated and unethical systems.

The Circular Economy can have a positive social impact, for example, by creating new jobs.

The adoption of the Circular Economy is of fundamental importance in reducing inequalities and promoting the creation of a more equitable and just society.

A necessary transition to the Circular Economy

In conclusione, l’Economia Circolare, la Simbiosi Industriale e la Sostenibilità rappresentano fondamentali approcci per affrontare le sfide ambientali, economiche e sociali attuali.

Come abbiamo visto l’adozione di modelli circolari e la promozione della collaborazione tra le imprese possono portare a numerosi vantaggi.

Inoltre, tali benefici sono accessibili a qualsiasi tipo di azienda, dalla piccola-media impresa fino al grande gruppo industriale.

Sta a noi iniziare a vedere i nostri processi di produzione con occhi diversi e con una mentalità innovativa.

La transizione verso un’Economia Circolare sarà cruciale per permetterci di far prosperare la nostra società nel future.

In conclusion, the Circular Economy, Industrial Symbiosis, and Sustainability represent fundamental approaches to addressing current environmental, economic, and social challenges.

As we have seen, the adoption of circular models and the promotion of collaboration among businesses can bring numerous benefits.

Moreover, these benefits are accessible to any type of company, from small and medium-sized enterprises to large industrial groups.

It is up to us to start seeing our production processes with different eyes and an innovative mindset.

The transition to a Circular Economy will be crucial to allow our society to thrive in the future.

Pulsante: valorizza ora i tuoi scarti aziendali Pulsante: Valorizza ora i tuoi scarti aziendali

Do you want to make your production processes circular?

With Sfridoo® you transform your processes from linear to circular, reaping economic, fiscal and environmental benefits through the principles of the Circular Economy and collaboration with other companies in the network.

Simone Tabellini per Sfridoo

Simone Tabellini

Green Marketer

One of the challenges of the Circular Economy sector is to communicate the advantages that this economic model can provide to businesses in a clear and effective manner. By investing in this aspect, we can increase awareness and knowledge among people.

Article updated on 11/06/2024