Circular Economy MBA at Bradford School of Management

This year Bradford School of Management became the first business school in the world to launch an MBA focused on the model of a circular economy. Partnered with the Ellen MacArthur Foundation, an organization set up to increase the knowledge of the circular economy as a sustainable business method and ideology, Bradford’s new distance learning MBA establishes itself jointly on the reputation of the charity and the school (founded  by long-distance sailor Ellen MacArthur, former holder of the record for fastest solo circumnavigation of the globe). 

The Innovation, Enterprise and Circular Economy MBA, to give it its full name, is a traditional MBA program in all but its emphasis on the circular economy. The aim of the program is to create MBAs with all the knowledge of the model along with the motivation to use their MBA as a platform to further the scope of the model in business and society. Professor Peter Hopkinson is director of the course and believes that the program will inspire his students to strive towards a sustainable business future in their business careers.

Circular economy vs. the current linear economy

The current economy can be described as a linear economy, “a ‘take, make, dump economy’” says Prof. Hopkinson. “You take stuff out of the ground, you harvest it, you make something, you use it once and then you throw it away. It’s been successful for many decades in certain parts of the world, predicated on the idea of cheap and easy access to resources, materials and energy. It will continue to operate but there is lots and lots of evidence and many signals to suggest that this cannot continue and that what we’re entering is an era of ever increasing resource commodity and energy prices.”

The CE model then, is an attempt to delinearize the current economic system and is a concept that businesses are becoming more attuned to as they realize that the current model is under strain. “They’re seeing what’s happening in terms of resource price increases, resource price volatility and the increasingly difficult issues around access to resources, materials and energy,” says Prof. Hopkinson. Because of this, many companies are beginning to see that there are alternative ways of doing business which would allow them to recover some of this lost value.

Sustainable business practices

Resource value is a big deal for businesses these days and in order to create sustainable business practices, companies must start to look at their current processes and ask how it would be possible to get back their used resources. Instead of selling outright to the consumer, the business may look into hiring the product out in order to retrieve the value of the parts at the end of its shelf-life.

Many companies are already changing their goals to reflect circular values. Rolls-Royce has transitioned to the concept of selling air miles by loaning out its engines, B&Q has begun renting out its electric drills and upping the quality for a longer-life product, and Renault, instead of selling cars, sells mobility by leasing the battery of its electric vehicles. Prof. Hopkinson iterates that these companies, “want to hang on to those raw materials so that their business models can be sustained into the future.” This idea also puts more emphasis on a loyal consumer-company relationship which, if managed successfully, could last a lifetime.

Businesses circularizing in a linear economy

The idea that much value is being lost by businesses that work within a linear economy is not a new one and today many companies take advantage of this ‘lost’ and untapped value from the wider economy.

“A classic example that we use quite a lot is eBay, it keeps things in circulation for longer and people make money out of trading stuff which previously might have gone to a jumble sale, probably would have gone in the bin, might have gone to a car boot sale but probably, ultimately, would’ve ended up in landfill.

He continues: “If you extend that idea, you’ve got Amazon, resellers, huge business sectors around remanufacturing, a huge repair sector, endless examples of reuse and people making greater use of the neutralization of materials, assets and infrastructure in lots of clever ways.”

Collaborative consumption

More recently we are seeing a huge surge in businesses making use of the idea of collaborative consumption to make money. Prof. Hopkinson talks of it being an old idea, “about sharing things, enhanced by digital platforms”. He uses collaborative consumption examples such as Zipcar and Netflix-like sites for clothes to show how not only is the idea making use of old products, but it is also interested in creating money by keying into gaps in an existing market. For example, the ride-sharing US startup SideCar utilizes new mobile technology to create economy from spare vehicle space. Drivers just log on whenever they are going out and can choose to pick up pre-paying users to take to their shared destination.

Professor Hopkinson is also a user of the company Airbnb which is a service allowing people to rent their spare rooms or sofas and functions much like SideCar in the way it utilizes space that would otherwise be wasted and uneconomical. The two-sided benefits make collaborative consumption a very successful concept within the CE business model, and as the technology is only just starting to become easily available to the common public, there is still much space in the market for existing businesses and startups to tap into.

The concept of a circular economy however is more than just a few companies finding a free market and doing some recycling. The idea is to extend the model right across the economy. Professor Hopkinson’s research at Bradford School of Management is in the ‘translation of the circular economy to city level and regional scale’ and is aimed at making the CE model understandable and conceivable on a broader level. One of the biggest issues at play is making the model work for individual businesses and allowing them to see the bigger picture. This can only be done if the next generation of business leaders have the insight and knowledge to do so, which is why programs such as Bradford’s CE MBA program are vital to breathe new life into contemporary business education.

Ellen MacArthur Foundation partnership

The Ellen MacArthur Foundation, partnered with McKinsey & Company, is dedicated to accelerating the transition to the circular economy and works with global partners such as Philips, Renault and Cisco. This February the Ellen MacArthur Foundation created the Circular Economy 100 which is a program comprised of industry leading corporations and innovators. The program aims to provide a forum for these businesses to build their circular capabilities and solve issues that arise during the transition in an expert collaborative environment.

Prof. Hopkinson talks of the foundation’s partnership with the MBA program. “They’re very central to it; some of the staff are helping us write the workbooks, we’ve got the backing of the foundation to market it, to contribute to it. We run an executive education program and we use similar materials on the MBA and so students have access to the latest business and academic thinking.”

Why choose the circular economy MBA?

The CE MBA presents a new way of looking at business. It mixes up everything businesses have been doing for years yet aims for similar business goals. According the Prof. Hopkinson, the model still targets prosperity, wellbeing and wealth creation, but it also aims to design circular industrial processes and business practices. This allows, “valuable resource materials to circulate for longer and for greater value and for the economy to move away from fossil fuels and towards renewables. And it is the idea of doing this driven by the private sector for profit that captures people’s imaginations.”

He also believes that his students are distinct from the ordinary MBA crowd and states that the program is, “for people who want something a bit different and who can see and share the world view that ‘business as usual’ isn’t going to succeed in the future. It’s for people who want to be ahead of the game. I see circular economy as an innovation tool, a different way of thinking and once you get in to it you start to question and challenge all sorts of orthodoxies.

“It should appeal to people who have heard about the circular economy or understand the issues and say ‘You know what, this is quite an interesting and well worked out framework, I want to know more,’ and I can see that the people getting involved are equally innovative and entrepreneurial.”

Why Bradford School of Management?

Bradford School of Management emphasis on circular economy is ground-breaking. Professor Hopkinson advocates his school by saying "We have designed our circular economy MBA to give the next generation of leaders a first-mover advantage and we think we know as much about the subject as anybody." Bradford School of Management is also home to the new US$4.4 million dollar RE: Center which is a hub of all the school’s research on the circular economy and is dedicated to a sustainable business future. Although the CE MBA is solely a distance learning course, there will be the opportunity to come together and conduct research at the center. 

Image Credit: Tim Green/Flickr