OCTOBER 201919Currently working in the area of economics and finance at the T.A. Pai Management Institute, Subramania Raju Rajusulochana recently published `108 in Crisis'By Subramania Raju Rajasulochana, Assistant Professor, Area of Finance & Strategy, T A Pai Management Instituteircular Economy seems to have caught the attention of Indian government, as well as the business leaders alike. According to a recent study report by FICCI-Accenture, India can reap the benefits of half a trillion dollar worth of economic value chain by 2030 through the use of Circular Economic Model. The NITI Aayog CEO Amitabh Kant acknowledged the importance of circular economy for improving resource efficiency and meeting India's growth needs of job and wealth creation. The businesses are adopting circular economy business models as a practical strategy to `hedge' against the complex and interconnected risks of resource competition, commodity price volatility, new materials technologies and changing consumer demands.Essentially, the circular economy business models seek to eliminate any kind of waste in the market. These innovative models encourage a shift from linear `take, make, dispose' industrial processes tomulti-life-cycle `circular' value chains, thereby enabling more efficient and fuller utilization of resources. The Ellen MacArthur Foundation defines a circular economy as `an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse and return to the biosphere, and aims for the elimination of waste through the superior design of materials, products, systems and business models'.Circular Economy Business ModelsFive Business Models to Mainstream Circular Economy1. Circular Supply Chain: Provide renewable energy, bio-based or- fully recyclable input materials to replace single life-cycle inputs. For example, BASF is replacing finite fossil resources with sustainably produced renewable resources through its innovative production Verbund Biomass Balance approach.2. Recovery & Recycling: Recover useful resources/energy from disposed products or by-products. For example, Nike reuses and recycles footwear manufacturing scrap and post-consumer shoe wastage, converting it into raw material for other sports equipment manufacturing players.3. Product Life Extension: Extend working lifecycle of products and components by repairing, upgrading and reselling. For example, Patagonia launched an online WHY INDIA NEEDS TO ADOPT CIRCULAR ECONOMY?CCXO INSIGHTS
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