Pedant’s Corner: Circular Economy vs Servicisation
Twice in the last week or so, I’ve heard people conflate two quite distinct concepts – the circular economy and servicisation/product-service system. This has riled my inner pedant no end, so I feel obliged to set out the difference between the two:
- Circular economy – all materials flow in closed loops just like the closed loops in nature.
- Servicisation – provide your customers with the service they desire (eg the ability to copy documents) rather than the standard product (eg a photocopier).
The confusion arises as there is some overlap between the two concepts (see my nifty Venn diagram). Eg in chemical management systems (CMS), solvent services typically recover and recycle those solvents. However in other CMSs, materials are not recovered, eg when companies provide a coating service, the coating stays with the product and is not necessarily recovered. This is why I’ve placed the double headed arrow above – whether a service is also part of the circular economy depends on the design of the service.
But my main point is that if you artificially narrow the two concepts down to the overlap in our Venn diagram, you’re missing out on the majority of both. Schoolboy error.