Product design and the circular economy: the UK government bares its teeth

Government budgets are rarely memorable. A year or so later, they are mostly history.

But the UK government’s budget of October 29th is one of those that breaks the mould. And for companies right around the world—and especially their product designers and supply chain functions—its effect will be far-reaching.

Simply, it moved the debate around plastic packaging from being hot air, to something that has teeth. Financial teeth, via a tax on any plastic packaging that does not include at least 30% recycled content. From April 2022, goes the plan, products with non-compliant packaging will be taxed.

How much? The details are subject to a consultation process. But overall, the broad shape is clear. Yes, it’s a revenue-raising measure. But mostly, it’s a push to reduce the use of hard-to-recycle plastics, and a push to grow the circular economy.

Trailblazers, of course, have been quietly getting on the with circular economy agenda for years. Hewlett-Packard, Dell, Caterpillar, Renault—these and more have strived to build recyclability into their products, and increase the proportion of product content that is made from recycled materials.

And as I point out in my recently-published book, Product Design and the Supply Chain: Competing through design, they haven’t been doing so for warm and fuzzy reasons to do with public relations and marketing. Instead, these and other trailblazers saw that the circular economy makes hard financial sense. The benefits—via lower product costs, and less waste—flow straight to the bottom line.

That said, of course, being seen to be actively green won’t have done their reputations any harm, either, among those who base their buying decisions on ethical considerations.

In terms of hard financial sense, even the dullest accountant can hardly fail to see the impact of such a tax. So even for companies with minimal or non-existent green aspirations, sustainability and the circular economy now make a lot more sense than they did before October 29th.

The trouble is, as I point out in Product Design and the Supply Chain: Competing through design, going green isn’t as straightforward as simply issuing an edict. The product design function and the supply chain function need to work together to make it happen. And the more sweeping the changes, the more critical this cooperation between the two functions becomes. Product packaging is one thing, in short, and actual products quite another.

Yet companies do make the transition, as I explain. Buy a Dell computer, or a Hewlett-Packard printer, and a growing proportion of the plastics from which they are made are recycled—including being recycled from previous Dell and Hewlett-Packard products. In short, it can be done.

My view: don’t wait for the tax regime to dictate your product development strategies and your timescales. Get ahead of the curve, and build sustainability and the circular economy into your product line now. Before government policy forces your hand.