Dr. Syed Shah ALAM is an Associate Professor at the Graduate School of Business, The National University of Malaysia. Prior to joining to The National University of Malaysia he taught at MAHSA University Malaysia, Universiti Teknologi MARA (UiTM), Malaysia and Multimedia University Malaysia (MMU). Dr Alam is the recipient of an “Excellent Service Award” at the Universiti Kebangsaan Malaysia in 2011.
Dr. Syed Shah Alam’s core research interests are Marketing and E-Commerce and Environmental Marketing. He has authored for four books and more than 120 academic articles in business and E-commerce area with presents h-index of 36. He has been listed in the Stanford University list of Top 2% Scientist in the world in 2020 as being the most cited scientist in a large range of disciplines. This list, which was created by analysing a group of over 150,000 scientist classified via 22 scientific fields and 176 subfields features. Over the past 10 years he has been actively involved in social enterprises development program in Malaysia with a special interest in participatory action research and social enterprises projects. He focuses on developing and promoting linkages and collaborative social enterprises activities between Malaysian educational and other institutions. He has given a keynote speech at MAHSA International Conference of Accounting and Business. He has also served as the secretary for “First International Research Conference on Social Business’ 2013” held in Universiti Kebangsaan Malaysia.
Circular Economy: A Greener Approach
The overexploitation of natural resources essential for economic growth and development has harmed the environment while also making these resources scarcer and more expensive. It's easy to see why the circular economy concept, which offers new possibilities to develop a more sustainable economic growth model, is gaining traction around the world. Humankind has followed a linear model of production and consumption since the industrial revolution. Raw resources have been changed into things, which are then sold, utilised, and eventually turned into garbage, which is often thrown and managed carelessly.
The circular economy, on the other hand, is an industrial model that is regenerative by design and intent, with the goal of improving resource performance and combating the volatility that climate change may bring to organisations. It offers operational as well as strategic benefits, and it brings together a massive potential for value creation across the economic, commercial, environmental, and society realms.
One of the circular economy's goals is to have a positive impact on the planet's ecosystems while also combating over-exploitation of natural resources. The circular economy has the potential to reduce greenhouse gas emissions and raw material consumption, improve agricultural production, and lessen the negative externalities that the linear model causes. A circular economy can assist reduce greenhouse gas emissions.
The principles of the circular economy on the farming system ensure that key nutrients are returned to the soil through anaerobic processes or composting, softening land and natural ecosystem exploitation. As "waste" is returned to the soil, the soil becomes healthier and more robust, allowing for greater balance in the ecosystems that surround it.
Furthermore, because soil deterioration costs the global economy an estimated $40 billion per year and has hidden costs such as increased fertiliser consumption, loss of biodiversity, and loss of unique landscapes, a circular economy might be extremely beneficial for both the soils and the economy.
According to the World Economic Forum, the creation of a circular economy model, in combination with new regulations (including taxation) and labour market organisation, can result in more local employment in entry-level and semi-skilled jobs.
In addition, the ExTax tax analysis, which was compiled by experts from several major consulting organisations, determined that the circular economy had the potential to create new jobs. An August 2018 study on the development of techniques to implement a circular economy came to the same conclusion, estimating that 50,000 new jobs may be created in the UK and 54,000 in the Netherlands. Another study conducted by the Ellen MacArthur Foundation and McKinsey also concluded on the changes in employment growth in case of a shift to a circular economy model.
Businesses that adopt the circular economy model can save input costs and, in certain situations, develop totally new profit streams. Profit potential in this circular sphere may arise from entering new markets, reducing costs through waste and energy reductions, and ensuring supply continuity.
Reducing the number of raw materials utilised is a key component of moving toward a circular economy model. Instead, corporations would utilise more recycled (or even reusable or easily changed) inputs with a bigger percentage of labour costs, reducing their reliance on raw material price volatility. This would also shield businesses from geopolitical crises and defend their supply lines, which are increasingly likely to be destroyed or damaged as a result of climate change events. Finally, the circular economy model would make businesses more robust, or more resistant to and prepared to deal with unanticipated changes.
The circular economy model appears to encourage business models in which clients rent or lease things for varying periods of time, depending on the type of product. Businesses will be able to learn more about their customers' usage patterns and behaviours as they interact with them more frequently.
Finally, this new relationship may boost consumer satisfaction and loyalty, as well as help to the development of better products and services for clients. Communication and understanding the clients' preferences and demands are more crucial than ever in a market where providers are liable for the goods delivered for a longer period of time.