A core part of the circular economy is re-using products and ensuring asset utilisation. Increasing environmental consciousness means more consumers are pro-actively recycling than ever before, as well as concerted efforts towards plastic-alternatives through biodegradable waste (bio-waste). It will be important to shift attitudes on the perception of recycled material and consumer desires for new products. Brands must reduce the price-quality ratio of manufacturing to demonstrate circular options that produce tangible advantages such as lower costs.
Listed below are the macroeconomic trends impacting the circular plastic economy theme, as identified by GlobalData.
2020 is forecast to see the deepest global recession since World War II, with the sharpest contraction in over 60 years. Huge spikes in unemployment follows drastic drops in oil consumption and global trade. The adverse impact on multiple areas of the economy will encourage manufacturers to consider shorter supply chains and new methods of employment.
On the downside, low oil prices make virgin plastics cheap to produce; therefore, a potential detriment to efforts that foster sustainability.
A trade war between the US and China, two of the largest economies in the world, has led to tit for tat trade barriers on several consumer goods. Over time, US trade barriers have extended to other countries in the European Union (EU), Canada and Mexico. These actions will encourage manufacturers to adopt shorter localised supply chains.
The sharing economy is gaining prominence worldwide and making inroads to structurally change how customers behave. Its origin lies in the concept that underutilised resources are wasted. Communities are also experimenting with the potential of collaborative and innovative solutions with purchasing groups, time banking, and co-working spaces. This is strongly connected with circular economy strategies, particularly with reference to waste prevention and resource maximisation.
Globalisation comprises many different elements: cross-border flows of trade, investment, data, ideas, and technology, not to mention people, including workers, tourists, and students. With dramatic drops in many of these elements due to the Covid-19 lockdowns, de-globalisation is expected as world trade will contract between 13% and 32% in 2020. National security and public health concerns are encouraging new rationales for protectionism, especially for medical gear and food, and an emphasis on domestic sourcing.
Urbanisation is the movement of people from rural communities to the city for work and residence. Since 1950, the world’s urban population has risen almost six-fold, from 751 million to 4.2 billion in 2018. By 2050, it is anticipated that two-thirds of the world’s population will live in cities. This will bring unique challenges to the circular plastic economy as urban lifestyles in compact cities encourage convenient habits that may be detrimental to sustainable living.
This is an edited extract from the report produced by GlobalData Thematic Research.