top of page

Circular Economy - An Understanding

Circular economy is an inspiring approach to modern day manufacturing and it is growing in awareness. Circular economy is part of Locally Crafted’s core thinking and is incorporated into its business practice. Locally Crafted was invited to a round table meeting with a top Melbourne University and a select group of industry experts, to offer ideas and thoughts on the subject. The goal of the meeting was to obtain feedback from businesses and experts, to better understand circular economy and how to implement its principles in modern education.

What is Circular Economy and why am I hearing about it now? Why is it important and how does it work? What is the future for circular economy and what has been done? Are improvements to be made? This article will dive into these questions with the aim to inform, increase awareness, drive passion and ultimately impact individual thinking and alter behaviour and practice.

Circular Economy – what is it and why am I hearing about it?

Circular Economy is an economic strategy to reduce impact on the environment regarding the extraction and use of raw materials for production, consumer products and waste management. It is designed as a closed loop strategy, where ultimately 100% of product materials are re-used. The Victorian government has divided the closed loop as MAKE (extract, energy recovery), USE (reuse & repair) and RECYCLE (manage landfill)

So why is Circular Economy becoming more prevalent? The answer is environment impact. It is common knowledge that Earth is in a precarious state, where experts state mankind’s impact is altering the atmosphere and biodiversity, leading to a tipping point of no return. The crisis has led to recognition that something more is needed to reverse the current situation. The Australian Government has rolled out initiatives to alter the current economy, from a damaging wasteful and pollutive one, to one that is more sustainable.

Although the closed loop economy is not a new concept, it is fairly new in government implementation. Businesses such as Locally Crafted clients have been practising the Closed Loop system long before it became recognised. Government initiatives and business practices have reduced the gap, leading to increased public awareness. The message is starting to infiltrate society due to changing government and business practice, education from early learning to advanced levels, increased social media, summits and public events.

How does a Circular Economy work and what are the impacts

Business practice has traditionally been linear with focus on maximising profits, production and efficiencies and less focus on sustainability and environmental impact. Globalisation, better supply chain practice and an increasing population has resulted in a fast-growing world economy, accelerating the global economic growth rate and damaging the environment at an alarming rate. Hence something needed to change. So why is a closed loop strategy better than traditional business practice? Let’s dive into the Circular process to find out.


At the make phase, businesses are required to think consciously about the impact where and how resources are extracted and where the final product ends up after its lifecycle ends. This may require to alter a products nature or even cease the product altogether. Businesses may need to invest in research and development and improve current technologies used in practice. Ultimately organisations need to find out what the impact of overall production has on the environment and make changes accordingly, so goods can be re-used and use of natural resources are minimised to avoid wastage.


Use…… I purchase a pair of jeans, I wear the jeans, I have a hole in my jeans, I throw the jeans away, jeans in landfill. The fast-fashion industry is a good example of traditional linear business. How a product is designed and manufactured can alter the way in which it is used. Hypothetically, if the jeans were manufactured to be more durable then they would last longer, leading to less purchases and reduced landfill. But why landfill? Do I have other options to dispose of my jeans? Well, there are charity bins and op-shops where the jeans will be re-used and possibly repaired, although at some stage landfill is the final grave, or is it? This leads to the recycling component of the closed loop model, which is often seen in slow-fashion.


Recycling has become big business in recent times. It is considered to be a great area of innovation for organisations and option for disposal and re-use. Currently worldwide approximately 9% of extracted resources are recycled. Circular Economy and Waste Management - CSIRO. This figure is unsustainable, impacting the environment and health of the population. Responsible manufacturing plays an important role, where design and materials can be altered to allow for recycling and reducing landfill. Although energy is required to recover recycled goods it can be managed in a sustainable way. Recycled goods are then re-used in manufacturing and the cycle starts again.

The Future of a Circular Economy or Circularity

Circular Economy strategies are the way of future business, to change the damage that has been inflicted and offer a more sustainable and growing economy. It is not merely task requirements needed, it will also require stamina and a cultural shift to understand and make the changes. While the government is implementing and undertaking circular economy initiatives, more is required. Mandate business law to gain the better results, educate and in-grain in society ‘this is the way of the future’, upgrade funding to better technology and research and development.

It is a large task to undertake but it does not mean businesses sit idle on the side lines and wait. Here is where the struggle lies, where some businesses are focused on turnover and bottom lines and staying within the boundaries to compete. This complacency and reluctance to incorporate innovation is a mindset that needs to be altered to achieve a sustainable environment. It is understandable that some companies would be financially impacted in a circular economy, it is also noted that a circular economy will create new business and opportunity. Research revealed benefits of a circular economy would increase economic growth further than a traditional linear approach. Manufacturing would be more sustainable, better for the environment, less pollution and increased health. A_circular_economy_for_Victoria_Issues_Paper_July2019.pdf (

It is refreshing to see businesses taking the initiative and undertaking circular economy practice. A great example are clients of Locally Crafted. It is a pre-requisite of membership that a client is partaking in circular economy strategy at some level. There is a long way to go to reach an economic level that is sustainable, but you need to start somewhere. Locally Crafted is doing its part to support business and increase awareness and will maintain progress for continual improvement.

Locally Crafted - Your Sustainable Choice

30 October 2021

Recent Posts

See All


bottom of page