The functional economy for smart consuming
#SRI — 10.03.2022

The functional economy for smart consuming

Xavier Marichal - Co-Founder Usitoo

Our cupboards are full to the brim with things that we rarely or never use! At a time when the circular economy is significantly changing our mind-sets, Usitoo is applying the principles of responsible consumption.

Summary

  • The functional economy (or usage economy) is based on the use of a product.
  • It aims to limit purchases, and thus the consumption of natural resources.
  • The sharing economy involves an intermediary to faciliate the sharing of goods and services. Consumption habits are slowly, but surely changing.
  • Even though the usage economy concerns mainly individuals, local councils are also showing an interest.

The world’s future challenges and those of the circular economy are considerable.

Instead of continuing to draw on the planet's material and energy resources, we should be reflecting on how to use the resources already at our disposal. At Usitoo, we rent items to people for a one-off occasion that they collect from delivery points. Since March 2018, our goal has been to move towards zero unnecessary objects. To this end, we are implementing the principles of the functional economy, which must not be confused with the sharing economy. These different principles are complementary and allow consumers to participate in the transition towards a circular economy.  

Objectifs de développement durable

‘The functional economy (or usage economy) is one of the five main models of the circular economy.’

Sharing or using: two business models

The functional economy (or usage economy) is one of the five main models of the circular economy. The sharing economy is another model, which encompasses circular supply chains, the recovery of resources and the extension of a product’s lifespan.

The sharing economy is a system in which products and services are shared between private individuals through an intermediary. It is certainly an efficient way of operating, but one that still sometimes seeks to make a profit.

In the functional economy (also known as PAAS, Product As A Service), a product is provided for use during the necessary time and its life is extended for as long as possible.

Complementary models

The five business models mentioned above are applicable on different scales within the circular economy, and they are even complementary. The challenge is not to put them into competition. On the contrary, they are up against a large number of economic players which are still seeking low costs and producing overseas in poor social and wage conditions. Although people’s attitudes are changing immensely, consumption habits remain firmly anchored. That said, we are seeing strong support from citizens that did not exist a decade ago.

Cheaper goods for all

Change always needs a little encouragement. Therefore, the partnerships between Usitoo and local councils are providing more visibility. We know that Usitoo’s model has helped to reduce the volume of waste at local tips, and lower the cost of removing and grinding large volumes of bulky waste. Moreover, making articles accessible to everyone helps to reduce social inequality.

Many groups in the circular economy cooperate, sometimes within the same business model. Usitoo rents objects to people for temporary use,  Tournevie specialises in tools,  Merciki facilitates the exchange of goods and services, and so on. It’s a win-win scenario for everybody.

Circular Economy - BNP Paribas Wealth Management

The opinions given on this website are those of the authors and do not necessarily represent the position of BNP Paribas Wealth Management.  

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