Impact Hub Yerevan’s CirculUP! project, funded by the European Union, is working with a broad range of stakeholders to set up a strong foundation for the circular economy in the country. We talked to Gevorg Poghosyan, Impact Hub Yerevan’s CEO, to better understand the vision behind this work.
Interview : Nazareth Seferian
Photo : Impact Hub Yerevan
For the past ten years, Impact Hub Yerevan’s work has focused on the intersection of entrepreneurship and impact. How does the concept of circular economy fit into this picture, and why is this important to Armenia, in your opinion?
— The driving force behind the concept of circular economy is the scarcity of resources and the need to avoid the destruction of value. Armenia is no exception. Particularly as a landlocked country with a relatively small territory, we should be mindful of every raw material that enters the country or is sourced here, and use it consciously to its full potential. If any waste is being removed that could have potentially led to a new product or service, we are destroying value that could otherwise have been harnessed, protecting our environment from harm, and saving or earning our business more money. However, it is often difficult to pitch the concept of circular economy to Armenian businesses from this perspective—we realize that it will require years of promotion and advocacy for our business community and consumers to adopt this level of responsibility.
We have had a lot of conversations on this topic, including with the organizations and individuals that form our Circular Economy Coalition, and there is one clear message on this topic we can send to all our small businesses that will resonate with them immediately—adopting certain circular economy principles and practices will add value to your product, making you particularly more competitive in European and other western markets.
We cannot compete with Asian producers when it comes to price, but we can do so on content and quality, and circularity can be a strong way to do so.
If an Armenian business reimagines its value chain as a more circular one and exports its product to European markets, the average European consumer is more likely to buy it, even if it is not the cheapest option on the shelves.
In this light, what is it that CirculUP! brings to Armenia, and how does it fit with Impact Hub Yerevan’s overall mission in the country?
— This is the first project on this topic with an approach of ecosystem building. It involves communication on the concepts of circular economy with all layers—businesses, civil society organizations, academia, policy makers, and more. Impact Hub Yerevan has always been a pioneer in social innovation in Armenia, and we always seek to build strong ecosystems that can drive our country to positive change. Sustainability is another major target toward which all Impact Hubs work.
CirculUP! is a project that builds ecosystems surrounding a topic where there is strong potential for social innovation while also helping us push the topic of sustainability forward. So it works well for the betterment of our environment as well as our entrepreneurial practices in Armenia. And I already mentioned the Armenian Circular Economy Coalition, consisting of organizations and individuals that will continue to drive this mission of promotion and advocacy of the circular economy in Armenia even after the CirculUP! project ends. So, we are laying the groundwork for long-term impact. At the same time, we are developing new projects on this topic and expect to be at the forefront of circularity in Armenia for many years to come.
Artur Yeghiazaryan, Head of “Miasin” International Charity Foundation
Circular economy is quite a new concept in Armenia. What are the challenges related to promoting such novelties in our context? How do you overcome them?
— There is a clear lack of understanding that needs to be addressed at the level of the general public, the business sector, as well as public institutions. There is also no clear strategy on cir-
cularity in Armenia, while the existing state strategies on the green economy or sustainability are still far from being effective. In the private sector, when you talk about circularity, it is immediately considered from the point of view of environmental responsibility, which may or may not be a priority for the given entrepreneur or business.
There is less thought for the economic value of circularity in terms of savings or new profit opportunities. So we need to highlight this and pitch circularity as an innovative approach that can add value for the businesses in our country. What we have seen so far is that there is a lot more energy and enthusiasm from our side for the potential of circularity than among the businesses that will benefit most once they make the necessary changes. This is one of the reasons why our project has a grant component.
We have trained startups and established small and medium enterprises (SMEs) so that they recognize specific opportunities for circular practices in their businesses and develop new solutions that will eventually increase their profits by earning them more money or saving costs. Once they have a clear vision of what they need to do to get there, the availability of grant money allows them to buy new equipment or make other major changes to achieve a higher degree of circularity. It is this logical chain of activities—awareness raising at several levels, direct capacity building of businesses, and grantmaking—that allows us to overcome the challenges that come with building, from scratch, an ecosystem for the circular economy in Armenia.
What excites you the most about CirculUP! and the work you are doing on the circular economy in Armenia?
— One of the outcomes we have already achieved is the upgraded knowledge that is now available in Armenia on this topic. We now have a team of trainers who are certified by CIRCO, an experienced Dutch company that has used its practical methodology with more than 900 companies so far. These local trainers can now deliver this knowledge to stakeholders in our country at the same level as in Western Europe. I am also looking forward to seeing what our subgrantee businesses do with the money they have received through the project—there are exciting ideas in the areas of agriculture, textile, and more.
There were two study visits to the Netherlands during the CirculUP! project, one for subject experts and the other for the members of the Circular Economy Coalition. What can we learn from other countries like the Netherlands when it comes to circularity?
— The first interesting thing we discovered during these visits is that we as a society have incorporated many circular practices a long time ago, which didn’t stem from a sense of heightened environmental responsibility, but out of necessity. For example, it is becoming trendier in western countries to rent, repair, and remodel clothes or pass them on to others, rather than quickly buy new items when something grows old or falls out of fashion. This was common practice a few decades ago in Armenia when there was a scarcity of new clothes or a lack of disposable cash to buy a new wardrobe each year, but it has decreased now. Additionally, there is a lot of state support in the Netherlands for the circular economy—it is a government priority, and many businesses can expect both technical and financial assistance from state bodies that will help them develop the right practices. This was exciting to see, but it came with the sobering realization that we cannot expect to receive anywhere near that level of support in Armenia in the near future.
Would you say that Armenian consumers are starting to appreciate circular practices? What can be done to increase awareness?
— There is a very small segment of consumers that considers circularity to be important. While the focus of our message to businesses in Armenia so far has been that circular practices will make them more competitive in European and western markets, our objective is also to constantly promote this concept locally and increase consumer awareness in Armenia over time. This is something that should be done by everyone—local businesses, the civil society organizations with whom we have worked, state bodies, as well as Impact Hub Yerevan, through future projects and our everyday activities. Given the socioeconomic challenges that Armenia has faced, it is understandable that consumerism is sometimes associated with prosperity.
The average consumer might think, “I’m going to buy myself a new shirt because I no longer like the older one, and I can afford to buy a new one!” Some countries have already gone through this stage, and the average consumer there now considers other options like remodeling old clothes, buying second-hand items, and so on. We will get there eventually, too. We are working at all levels to make sure that we get there sooner, rather than later. We also expect the state to eventually develop policies that will counter hyperconsumerism.
Over time, this combination of consumer awareness, business innovation, and favorable policies will lead to an economy in Armenia that is increasingly circular, responsible, and competitive.
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