Elen Macarthur Foundation

 

Services, not Goods

Rethinking our economic model does not only involve a reorganisation of manufacturing processes, the change goes as far as redefining the relationship between objects and consumers. Then again, looking forward, will “consumer” still be the right word?

The emphasis on Services rather than Goods is a central idea of the new circular economy. Beginning in the mid-1980s, Swiss industry analyst Walter Stahel and German chemist Michael Braungart independently proposed a new industrial model that is now gradually taking shape. Rather than an economy in which goods are made and sold, these visionaries imagined a service economy wherein consumers obtain services by leasing or renting goods rather than buying them outright (their plan should not be confused with the conventional definition of a service economy, in which burger-flippers outnumber steelworkers).

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Manufacturers cease thinking of themselves as sellers of products and become, instead, deliverers of service, provided by long-lasting, upgradeable durables. Their goal is selling results rather than equipment, performance and satisfaction rather than motors, fans, plastics, or condensers. The system can be demonstrated by a familiar example. Instead of purchasing a washing machine, consumers could lease it, paying a monthly fee based on how much they used their washing machine. After all, as Michael Braungart puts it, “Do we really consume washing machines or dishwasher? The term ‘consumption’ involves the notion of ‘feeding on’, and that’s surely not the case for most things we buy – which is part of the problem.”

The washer would have a counter on it, just like an office photocopier, and would be maintained by the manufacturer on a regular basis, much the way mainframe computers are. If the machine ceased to provide its specific service, the manufacturer would be responsible for replacing or repairing it at no charge to the customer, because the washing machine would remain the property of the manufacturer. The concept could likewise be applied to computers, cars, DVD players, video decks, refrigerators, and almost every other durable that people now buy, use up, and ultimately throw away. Because products would be returned to the manufacturer for continuous repair, reuse, and remanufacturing, Walter Stahel called the process ‘cradle-to-cradle.’

Adapted from “Sense and Sustainability” by Ken Webster and Craig Johnson. Download a free pdf copy of the book

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