Environmental Modularity in the Circular Economy

In this paper, we elaborate the essential role of modular product and process architectures in converting currently prevalent open-system, one-directional industrial processes to the closed-system, bi-directional flows of products, components, parts, and materials that are at the heart of sustainable economic systems commonly referred to as the Circular Economy. We introduce the concept of environmental modularity and elaborate the ways in which environmentally modular product and process architectures play an essential role in achieving the "Five R's" at the heart of the Circular Economy movement: Reduce, Recover, Re-use, Repurpose, and Recycle. We explain how adoption of reverse-flow processes enabled by environmentally modular product and process architectures depends on achieving changes in consumer attitudes, business models, and the resulting dynamics of industrial ecosystems of firms, suppliers, consumers, and governments. We identify five kinds of entrepreneurial action that can contribute to converting currently prevalent and unsustainable industrial systems based on one-directional flows of products to sustainable industrial ecosystems with bi-directional flows of products, components, parts, and materials that are the basis of the Circular Economy.