Keywords

1 Introduction

A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life [1]. The transition towards a circular economy has the potential to change the situation that economy growth is heavily dependent on resource consumption in China. It works to decouple the economic development and the resource consumption. Circular economy approaches save industry money through reduced cost of resources and energy, generate revenue from waste streams and retention of value in existing infrastructure, as well as assets through new business models such as leasing.

The development of circular economy thoughts originated in 1966, when Boulding presented the idea in his spacecraft economy, a shift way of thinking from the traditional open system to a circulation of closed loop of materials; in 1989, with Pearce putting forward the use of the word “Circular Economy” in English, and the rising of Industrial Ecology in the 1990’s, research on circular economy formed its imposing manner; since 2010, In UK, the Ellen MacArthur Foundation (hereinafter referred to as EMF) has led the upgrading to an optimized version, with the joint efforts from enterprise and higher education.

3R, namely reduce, reuse, and recycle, is the operation principle of circular economy. There are two directions of development followed this 3R principle. The one focuses on recycle, mainly related to waste management; the other one underlines reuse, as Stahel and other, claiming a new economic system.

Over the past decade in China, the main approaches to transit to the circular economy are mostly from top down and government took the initiatives. For example, from 2001 to 2011, in ten years, 60 state-level eco-industry parks had been constructed to demonstrate the systemic circulation of ecological industrial organization. However, to truly realize the circular economy transformation, especially at the city level, enterprises should be the leading force. Different from the government, with large amount of investments to stimulate the transformation, seeking out consistently profitable model with the framework and concept provided by circular economy and design innovation, is the key for enterprises to success. In addition to developing venous industry of recycling, the tendency today is towards to develop second-hand goods exchange, sharing economic or collaborative consumption. Many projects that are currently operating need to be connected in order to form a systemic circulation. Bottom up projects initiated by companies should become major contributors.

To realize this systemic transformation, the challenges may vary from micro scope to macro scope: the micro scope, that of individual behavior, relates to the consumption habits in one’s everyday life; the meso scope, that of groups where the individual may still have some influence, involves the companies and organizations with their ways of producing and delivering their products and services; the macro scope, that of ecosystem, where the natural domain and human society should be regarded and researched as a whole system.

These are enormous challenges; we are facing the notion of complex interaction, iteration and uncertainty. What is calling is a systemic approach which unifies and concentrates on the interaction between elements and the effects of those interactions, and integrates the relationships during the course of time.

Design, with its nature of solving problem through synthesis, has potential to take up the challenges from various scopes mentioned above through interventions in various levels of system and at various action points in processes to build up a regenerative cycle in a new ecosystem.

In UK, the interdisciplinary collaboration in the innovation to accelerate the transition to circular economy is emphasized, and design is regarded as one of the three main driven forces. In the book The Circular Economy: A Wealth of Flows, a publication by EMF in 2015, circular economy is defined as: “one that is restorative by design, and which aims to keep products, components and materials at their highest utility and value, at all times.” The highlight of design is obvious. Design is put at the key position to the implementation of circular economy.

2 Challenges in Closing the Loop of Reuse

Walter Stahel stated reuse as good strategy: “The linear model turned services into products that can be sold, but this throughput approach is a wasteful one. In the past, reuse and service-life extension were often strategies in situations of scarcity or poverty and led to products of inferior quality. Today, they are signs of good resource husbandry and smart management.” [2].

Where living standards are low, sharing may well be the only way to afford commodities. At the beginning of the 20th century in Europe, shared cooking and washing facilities were typical in the apartment buildings; people were used to waiting in turn to use something. After the Second World War, the quick growth of economy changed the situation, and the microwave and the washing machine are considered to be basic needs for every household. Today in China, shared electric appliance and facilities could be found at many places in less developed areas, such as remote rural villages and city slums; while in the modern cities, shared facilities are rare in new built communities, and every family has their own household appliances.

In the era of consumption, a kind of consumer habit has been cultivated that people are inclined to possess a product in order to use it at any time one wants to, and to define one’s own status, even the product is not useful for him. In a recent survey in China’s rural area, videos were recorded of the 24-h daily behavior in the household; a phenomenon was discovered that the refrigerator in the kitchen was seldom used and always empty, but in the village where this survey was taken place, every household had at least one refrigerator. Villagers bought refrigerator as it was perceived as a sign of modern life style and got ambivalence to it after figuring out they do not need it as they easily access to fresh food.

Normally, a consumer makes the choice between leasing and temporarily using a product supplied by a provider and buying a product for owning it, depending on consideration of the following aspects:

  • Relative affordability

  • Functionality and usage

  • Freedom and convenience

  • Identity and status

The first two are commonly considered together. When buying is expensive and the product is only needed for once or for a very short period of time, chances are that the product will be rented rather than be bought. But, if renting is barely cheaper than buying, and the product provided not attractive or well maintained, it will be the opposite. In many cases, the last two aspects are more decisive. With the traditional linear model, companies try to sell more goods to generate profit. For example consumers are encouraged to possess a whole set of kitchen appliances and utensils, even some tools are barely used. They buy for the convenience that they can use it whenever they want. The reason they buy these sought of tools is also because renting is not as easily accessed as buying in today’s community. Another example is that companies upgrade their products frequently and consumers are incited to buy the new series when their old version products are still working well. In these cases, people buy to show who they are. People own much more than they use which is why it is so difficult to compete with economic material growth. Sharing and renting somehow have to find their way in. New business models for sharing and reusing are to be designed, and consumer habits and behaviors should be carefully studied and considered.

In China, from rural to urban areas, a lot of bottom-up social innovation practices have been emerged, kinds of sustainable products and sharing services are provided by small start-ups, and certain companies are exploring into new business models to get profit through maximizing the product usage and extending its service life. But regarded to China’s overall economic scale, these practices are still in a state of fragmented. On the contrary to these emerging practices, most of the existing mainstream businesses still maintain a certain market, and the products they provide are closely connected to the consumers’ habits and unsustainable ways of living. They take a wait-and-see attitude to transition to the new circular model, and regard that reform will be beneficial only when the company getting privilege by policies and/or getting large amount of investigation from government.

At the same time, most of the company’s internal structures of organization are bound to the linear economic model, transformation means more than just researching and developing innovative sustainable products and services, it also means that the company needs internal organization reform. Moreover, comparing to many start-ups and social companies initiated by designers, where open design is regarded as the main approach to achieve innovative outcomes, those traditional companies with linear business models oversee the design capabilities. Their understandings of design are still staying in the design 1.0 era. Many of them only look into the technical sphere to find innovative solutions when they are seeking ways of change. For a time, mainly in the top-down approaches, companies adopted new technologies to produce more eco-friendly products, for which more cost added to purchase new materials and pay for new crafting processes. In many ways, the perception of sustainability has come to a notion of high cost and low profit. For lacking of understanding of design and underestimating design’s capability, many companies ignored possible opportunities to gain profit and growth when developed sustainable business models and delivered products and services in sustainable ways.

In China, design thinking and open innovation should be introduced to the mainstream companies, such as textile, home appliances manufacturers. Design thinking and open design methods could help them to change mindset and reform their internal organizational structure, to become more innovative and more adaptable to the present situation of rapid transformation. Via ongoing efforts in co-creation practices, they will find the way to change and growth; and become successful adopter of the new economy.

3 Capabilities of Design for Enabling the Transition

There are “activation energies” required to get business to change. Could design offer the energies in need? Mainly in three ways design could be beneficial and act as catalyst to the transition.

The value creation by design could be one of these “activation energies”. Design always has the capability to recognize unusual opportunities to create value, particularly intangible one [3]. Intangible value creation in the process of service is enabled by design of the product service system. Experience, social connection, and other kinds of intangible values are the reason consumer would like to adopt the sharing and renting than the buying.

When Uber, a smart car service provider, came to China, it launched an event of “celebrity drives for you”. People were excited in taking Uber cars for the opportunity of meeting celebrities. Although it was only a temporary service provided, it highlighted and made it visible that the trip with Uber has different experience from taking a taxi or driving by oneself. It is about serendipity to meet with interesting people, interesting cars and at the same time a convenient and relax trip. It was this intangible value which other kind of services don’t offer. As a series services similar to this are emerging in the market, people are more and more considering taking alternative way when travel.

In a community creation project in an old area in Shanghai city last winter, designer built up a small playground at the street corner for children living in the community using abandoned bike racks at the site. It was also taken as a neighborhood interaction space by the residents when completed. The project had a very low budget for moving the bike racks to shape the game installation, changing the surface color for a vivid appearance for the kid’s preference, and wrapping up the steel frame with shockproof packaging material to achieve security, but a completely different experience were gained, and a whole new service life was given to the used bike racks. It is the design eyes see the shape of bike rack and the space it formats usually provide the use of parking bikes could, in another way, be used as a space for children to climb and play.

Recently, Alibaba added a new application Idle Fish to its successful app group served as a platform for users to exchange second-hand items; it connects to Taobao, the successful C2C online shopping platform founded in May 2003 by Alibaba, and shares many existing resources in Taobao application, to provide the accessibility of second-hand transactions. On this platform, many items were formerly purchased from Taobao, product information is already available and easily to forward to the second hand trading platform, great convenience is offered smartly. And through this platform, people interested in similar products or related topics in everyday life exchange ideas, stories and photos, social connections are thus built up. In this context, reusing and sharing are no longer signs of negative status, but a kind of culture of social interaction. Experience and the social connection are the two examples of mindset shift engine which make the reusing and sharing valuable choices to consumers.

The second “activation energy” design could provide is empathy. Companies normally think of users in terms of market segments. Normally in a consumer questionnaire, preferences are separate and cannot provide an integrated image for consumer to choose, they can only rely on the image they try to form up by the limited information provided and with reference to the existing products on the market. These surveys can hardly be helpful as people make decisions finally in an integrated way. And they are especially weak when encountering the case that designers try to change the consumer behavior by design intervention. People may not tell you how they will make an alternative choice. The current situation is that, though many have the awareness of the environmental crisis and sustainability, they will still stay with the old ways of living as long as the market provides the same kind of services as before. With the stereotype image of the access model services, directly asking question to the customers can only get similar answers showing the current phenomenon. Design process can explore the potential needs people do not know to ask. By an approach of observation of what people do and with methods of user study it could lead to real insights.

There are successful examples of understanding users by design empathy and coming up with new business opportunity. TU Delft IDE student Sarah Bork carried out her graduation project at Interface®. Interface® is floor covering provider and an early Access Model adopter. Sarah researched related services provided by other companies such as cleaners, architects and installers. In her research, she figured out nuance differences between users, this helped her to come up with differentiated Product Service System, with three types of users: “high image”, “true green & functional”, and “fast movers”. Distinguishing between different kinds of users doubles the economic lifespan of carpet tiles from 7 to 14 years, leading to a match of economic and technical lifespan. Lowering recycling frequency and offering more pricing flexibility improves interface’s financial performance [4].

Then comes to the third “activation energy” design is capable to contribute to make the change. It is the ability to visualize ideas. By visualizing and prototyping ideas, giving abstract ideas concrete images and shapes, design makes the stakeholders see possibilities in an integrated way, and enables user tests in a transformed context. Even in the case of no new product is needed, for example the sharing or reusing of an existing product, visualizing the activities and interaction between users and stakeholders, involving all elements in the context and environment services provided, designers and co-creators can discuss and compare different options. With a set stage for the test, user behavior could be studied in the new context transformed by the new service provided. And this is vital for innovative ideas which do not have reference in the current situation.

4 Changing Contexts in Design

Establishing product service system by design is the key to accelerate the transition and enable the circulation of reusing and sharing. A “product-service-system” is a blend of products, communication strategies, services and spaces that are used in an integrated way to offer comprehensive, ethical solutions to complex demands [5]. Designing product service system for access business model under the principle of reuse for a circular economy, the design principles and contexts are shifting.

The center of the product-service-system is the people (users, suppliers, employees, or stakeholders in general) who interact with all these multiple design components, which are part of the system as well. Not only users but all people, and their activities, interactions needed to be considered in the systems. Different with the products designed for individual owning for a long time, when coming to the design for a product of service, for example a product for share and reuse, the contexts it will be used in are varied. For example, differentiated demanding and preferences will occur when designing a table for rental in a co-working space, as the user will work in a collaborative mode and may have different interactions with the table and with other people working together with him in such context. And the return of the table after use, the disassembly and/or repair by the providers, the material and resource effectiveness are all important issues to be considered, to ensure each link in the process of circulation being connected easily and fluently. The principles for this design goal are as followed: ease of maintenance and repair, ease of dis- and reassemble, adaptability and upgradability, standardization and compatibility. In addition to this, understanding that the human activities and behaviors are influenced by the instant environment and the context is also fundamental for working with the context for a product service system. Complex interaction, iteration and uncertainty are the notion may designers encounter. A dynamic and systemic vision is needed when comes to the context of a product service system for an access business model.

In case study of the sharing and reusing service in China, it shows that the adopter and user of those services are a very specific group of people. These are neither the normally range of demographic characteristics nor a propensity to buy things within the categories of interest to a company. These are people with intention to collaborate and who are more open to the sustainable way of living, and they are all match the storytelling of the specific service. Thus it can be seen that the development and operation of a specific sharing and reuse service model need to find its specific user group. It requires solid field survey and user study, as well as working and creating together with the potential users to generate real vital system of products and services.

Work on complex projects goes beyond the knowledge of one person to require the knowledge and skills of people from different disciplines. They need to coordinate their activities and synthesize their knowledge. Here, designers are to be working together with experts from ends of market, business and technology, as well as together with potential users and possible stakeholders. Designers will not only work on the products or the graphics which are the traditional orders for design discipline, they are to be working on the synthesis of the activities and knowledge of all the participators. They will design and generate new tools and methods to communicate with experts, users and stakeholders, to ensure their ideas and potential needs are properly communicated; and they will need also to provide convenient tools and friendly interfaces in order to create more open and innovative atmosphere for all the people working together.

5 Conclusions

Apart from the market, looking to the current situation in design education in China, could we say that the framework and worldview of circular economy has taken its place in what we understand of design and the general sense of problem solving? There is a good reservoir of teachers and many enthusiastic learners who wish to see change for the better, a more prosperous, thriving world and citizens active in their democracies. This has been true for the decade but it is hard to say that it has operated to create more than in a piecemeal fashion.

Design schools or colleges can serve as a special agency, playing an important role in promoting enterprises’ transformation to circular economy. It is not just because the design schools and colleges are the incubator for cultivating the future talents in design, but also because they are the active agencies for innovation practices, researches and experiments, collaborating with enterprises, scientific research institutions, technology development department and government. They are to work in the context of the big picture demand of the circular economy in world view, pedagogy, skills and aptitudes as well as new knowledge, and for the integrated systems which could work on the larger scale to create circular cities.