Design Strategy | Circular Economy | Product-as-a-Service

The Tension Between Circular Logic and Human Nature

The Friction of Leasing In a linear economy, the transaction ends at the point of sale, and the product’s lifecycle is lost. As we shift toward a Circular Economy, the Product-as-a-Service (PaaS) model aligns a manufacturer’s incentives with product longevity. When a company retains ownership, durability and Design for Disassembly (DfD) stop being costs and become profit drivers.

However, there is a profound human resistance to leasing. Even when a system is logically superior, we experience Psychological Ownership—a state where we feel an object is intrinsically “ours” due to three factors:

• Self-Identity: We define who we are through our tools.
• Control: Owning hardware feels like absolute freedom to modify it.
• Investment: The time spent customizing creates a deep bond with the object.

High Identity vs. Utility-First Design For a leasing model to succeed, the service must provide a higher perceived value than traditional ownership. This depends entirely on the product’s emotional weight:

• Utility-First (e.g., The Urban Waste Bin): In environments like Vancouver, we don’t own our bins; we lease the service of waste management. The provider owns the hardware, incentivizing rugged, standardized, and easily repairable designs. PaaS is invisible, logical, and highly efficient.
• High-Identity (e.g., The Personal Computer): A category where emotional bonding and personalization are essential, making traditional leasing models friction-heavy.

The Outcome: A New Role for Designers Closing resource loops requires a fundamental shift in business models and the user-product relationship. As industrial designers, we must categorize our interventions to bridge this gap:

• For High-Identity Products: Create Modular Architectures that allow for deep personalization (like swappable data modules) while maintaining the core hardware within a circular loop.
• For Utility-First Products: Focus on Hygiene-as-a-Service, designing for extreme durability, standardized maintenance, and seamless integration into existing infrastructure.

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References:

• Bocken, N. M., et al. (2016). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering.
• Ellen MacArthur Foundation (2016). Intelligent Assets: Unlocking the Circular Economy potential.
• Pierce, J. L., et al. (2001). Toward a Theory of Psychological Ownership in Organizations. Academy of Management Review.
• Tukker, A. (2004). Eight types of product–service system: eight ways to sustainability? Business Strategy and the Environment.