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Circular business models in the mobile phone industry

State of Green
By State of Green, December 18, 2017

The Nordic Council of Ministers has published an extensive report on circular business models in the mobile phone industry in the Nordic countries, in which they identify opportunities and obstacles to growth in circular business models.

A project commissioned by the Nordic Council of Ministers to analyse circular business models in the mobile phone sector recently published their final report. Through in-depth interviews with stakeholders, the report maps out the circular economy business models in the sector, with the purpose of identifying opportunities and obstacles to growth constituted by for instance consumer law and regulations.

-Related news: Circular Consumption through Innovative Business Models

Mobile phones refurbished for resale
The global sale of used smartphones has grown rapidly in recent years and it is expected to rise from 53 million in 2013 to 257 million in 2018. Previously, used phones were mostly shipped to developing countries for discardment or to be refurbished and resold there. Today however, phones are increasingly being refurbished for resale in the Nordic countries.

Mobile phones contain a number of critical metals and hazardous substances. The mining, extraction and refinement of these metals is associated with a range of impacts on human health and the environment, not to mention the damaging effects of leaked hazardous substances from electronic waste. Thus, the growth in reused smartphones has a range of positive human and environmental effects.

-Related news: 10 Examples of Circular Economy Solutions

The recent change in consumer behaviour is primarily driven by the high purchase price of new smartphones and a slowdown in the development of new disruptive features. This has been accompanied by an increasing awareness among consumers of the high commodity value of their used phones.

The report points to waste regulations as a significant obstacle to the adoption of more circular economy business models in the industry, since they lack a clear legal definition of what ”preparation for reuse” entails and who is allowed to perform it. Furthermore, the nondurable design of mobile phones reduce their lifetime and therefore also undermine efforts to implement more circular economy principles in the industry.

The full report is available here.

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