Circular Transition: Driven by Innovation from Small and Medium Enterprises

Oct 18, 2023

Imagine for a moment if every person on Earth enjoyed the same standard of living as an average Australian.

With such a lifestyle comes undeniable benefits: a higher life expectancy, reduced child mortality, commendable gender equality relative to the rest of the world, and elevated literacy rates, to name just a few. Yet, there’s a startling flip side to this vision. If everyone pursued this way of life, our planet would buckle under the strain, requiring a staggering 4.5 Earths worth of resources to sustain us. Clearly, while everyone deserves the right to such a standard of living, we’re faced with an undeniable truth: we don’t have 4.5 Earths at our disposal.

How then, can we achieve the vision where the Earth is not just a resource to be exhausted but a cherished home where every individual can thrive? A world that’s both safe and just for all its inhabitants, existing in balance with the very essence of our living planet. The pathway to this sustainable and equitable future? The Circular Economy.

At Circular Economy Victoria (CEV), we formed our not-for-profit organisation to not just dream of this future, but to dedicate ourselves to pioneering the transition to a circular economy right here in the state of Victoria. Our theory of change is rooted in Geels’ Multi-level Perspective (MLP) for Socio-Technical Transition, a framework that helps us understand the dynamics of transitions from one socio-technical system to another, in this case, from a linear to a circular economy.

Multi-Level Perspective – A Theory of Change Applied to the Circular Economy

The application of Multi-level Perspective to the Circular Economy revolves around empowering and supporting the creation of successful circular businesses as a means to enable the transition to a circular economy within Victoria. This theory recognises that transitions towards the circular economy require interventions at three levels: the niche (micro), regime (meso), and landscape (macro) levels.

The Landscape Level: The Shifting Broader Context to Sustainability

To set the scene, let’s look at the broader societal context or the ‘landscape’. The global climate strikes, with their passionate young activists and compelling calls to action, have echoed through the streets of Melbourne and other Victorian cities. These protests not only serve as a voice for the environment but also create overarching pressures on the socio-political environment. Such landscape shifts make it difficult for the existing regime to maintain the status quo, thereby opening doors for innovations at the niche level.

The Regime Level: Challenging the Norms of Industry and Government

Amidst the shifting landscape, the regime – comprising dominant practices, rules, and technologies – is being challenged. A notable illustration is the shift by large retailers in Victoria to reduce packaging waste. Companies like Woolworths and Coles, recognising the burgeoning

demand for sustainability, have begun to implement policies like phasing out single-use plastics and introducing reusable packaging. While such measures are commendable, they also signal the existing regime’s vulnerability to landscape pressures and its adaptive measures to stay relevant.

The Niche Level: SMEs Pioneering the Way Forward

At the heart of this transition, and the most crucial for our analysis, is the niche level. Here, small and medium-sized enterprises (SMEs) in Victoria are emerging as the bedrock of innovation, introducing alternatives that align with circular economy principles. These businesses, nimble and adaptive, are less entrenched in the existing system and can more freely experiment with novel ideas.

But why are SMEs so pivotal? Their size allows for agility, making it easier to adapt to new market demands quickly. Moreover, they often have a more direct relationship with their community, enabling a deeper understanding of localised needs. By meeting these demands with circular solutions, they not only gain a competitive advantage but also drive a broader change in consumer behaviour and market expectations.

Consider, for example, Evitat, a startup providing a platform empowering more sustainable home renovations by enabling renovators to connect with circular suppliers, and service providers; Koskela; a furniture company incorporating circular principles in their design and production processes; Circulise; an organisation providing CE upskilling for medium to larger organisations; GOODSERCLE; an organisation that provides circular white goods for households and businesses, by recovering, refurbishing and reselling white goods; and Frank Wild/No Offence Wine; two organisations that have collaborated to bring circular wine to the events industry. Such niche innovations, though currently small in isolation, collectively signal a paradigm shift.

The journey of Victoria towards a circular economy is a testament to the intricate dance of pressures, challenges, and innovations, aptly captured by Geels’ Multi-Level Perspective. At the forefront of this movement, Victoria’s SMEs are not just participating in the change but are actively sculpting it. Their resilience and ingenuity not only promise a sustainable future for Victoria but also offer a model for others to emulate through:

  1. Innovative Business Models: SMEs in Victoria are trailblazing by adopting business models that focus on sustainable production, zero waste, and resource efficiency. For instance, companies are now leasing products rather than selling them, ensuring product return, and promoting a culture of reusing and recycling.
  2. Product Redesign: Embracing the principles of circular design, SMEs are re-imagining products. By designing for longevity and ensuring products can be easily repaired, upgraded, or recycled, these businesses are challenging the conventional norms of the consumer market.
  3. Collaborative Networks: The beauty of SMEs lies in their agility and propensity for collaboration. They are forming networks, pooling resources, and sharing knowledge, creating a supportive ecosystem that fosters innovative thinking and rapid implementation of circular solutions.
  4. Technological Innovations: Technology is at the heart of many SME-driven innovations. From AI-assisted recycling systems to digital platforms that facilitate product sharing, these businesses are leveraging technology to create scalable solutions for a circular economy.

The Bigger Picture: SMEs as Beacons for Systemic Change

While SMEs are small in scale, their collective impact in driving the circular economy can’t be understated. They often act as trailblazers, experimenting with new ideas, taking risks, and showcasing the viability of circular principles.

Through their successes and learnings, they influence the meso and macro levels. As they gain momentum, larger organisations, policymakers, and the wider public take notice, setting in motion a ripple effect of change.

Circular Economy Victoria’s role as the innovation sponsor for the Circularity 2023 Conference is part of our effort to highlight the role of Small and Medium Enterprise in driving the transition to a circular economy in Victoria. By adhering to Geels’ Multi-level Perspective for Socio-technical Transition, CEV focuses on empowering and enabling successful circular enterprises at multiple levels. Organisations with whom we have engaged like Koskela, Evitat, GOODSERCLE, Circulise, and Frank Wild/No Offence Wine are examples of this. If you have an opportunity, come and visit them at the Innovation Exhibit, sponsored by CEV, at Circularity Live 2023 where they will be exhibiting their innovative solutions. CEV is dedicated to the transition to a circular economy in Victoria and would encourage you in your own initiatives to adopt Circular practices to create a more sustainable and environmentally friendly future.

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