Planned Obsolescence: An Unsustainable Business Model

Let’s start by defining some terms. Planned Obsolescence involves designing products to quickly break or become obsolete in the short to mid-term, with the general goal of encouraging sales of new products and upgrades. This business model thrives on consumer dissatisfaction and the constant need for newer, shinier products. However, this approach is ultimately unsustainable for several reasons.

Planned obsolescence comes in several types, which is telling in itself – it has become so embedded in our culture that academics have created a classification scheme.

Systemic obsolescence occurs when products become obsolete or unsupported due to technological ecosystem or infrastructure changes beyond the control of individual consumers. Examples could include the transition from 3G to 4G and now to 5G, as well as the phasing out of VHS tapes and floppy disks.

Perceived obsolescence is the strategy of convincing consumers, through advertising and marketing, that a product is outdated or obsolete before it no longer functions properly. This could include Fast fashion, or needing to buy the next “cool” new phone.

Dated obsolescence occurs when the product(s) stop working or are deactivated at a certain date – which forces consumers to replace them irrespective of their working condition. Think about that time when a software upgrade “bricked” your phone.

Legal obsolescence is when a law or regulation is enacted which forbids a product from being used or bought. The 2035 ban on the sale of internal-combustion vehicles in Europe is legal obsolescence, as would the US Food and Drug Administration’s (FDA) ban on the use of chlorofluorocarbons (CFCs) and other propellants in hairsprays.

The cell phone serves as a prime example of planned obsolescence. Manufacturers continuously introduce new models with only slight upgrades, leading consumers to feel the need to upgrade even if their current phone is still in working condition. Marketing teams play on the fear of missing out, making individuals believe that they must have the latest model to remain connected and relevant. This unsustainable business approach of planned obsolescence has negative effects on both the environment and consumers.

 

Proponents of the practice will argue of its advantages. They may claim that planned obsolescence stimulates economic growth and innovation by constantly introducing new products and generating demand. They cite evidence that it can stimulate economic growth and innovation by driving the constant introduction of new products. R&D improvements can lead to technological advancements and innovation, further driving economic growth and creating new opportunities for businesses and consumers alike. However, the downsides of planned obsolescence far outweigh these supposed benefits.

The environmental impact of this business model cannot be overlooked. The manufacturing, transportation, and disposal of these products contribute to pollution and the depletion of natural resources. Cobalt, for example, is a major component of cell phones. The mining of cobalt has been linked to environmental degradation and human rights abuses, as most of the world’s supply comes from conflict zones or areas with unregulated mining practices.

Planned obsolescence leads to an excessive amount of electronic waste as consumers discard their seemingly outdated devices in favor of the latest models. These discarded electronics often end up in landfills or are shipped to developing countries for improper disposal, posing serious health and environmental risks.

If “because it’s the right thing to do” isn’t enough of a motivator, there are also laws and regulations to address planned obsolescence. In France, for example, a 2015 law allows judges to impose fines on companies found to be deliberately shortening product lifespans up to 5% of their annual sales. Across Europe, products must be usable for a reasonable length of time and sellers are liable for immediate defects up to 2 years after purchase. In Brazil, fines and labeling requirements focused specifically on tech products made obsolete by software updates before the reasonable lifespans of devices.

In addition, the financial strain on consumers should not be discounted. The pressure to constantly keep up with the latest products can result in unnecessary spending and debt accumulation, as individuals feel compelled to purchase new items long before their current ones have reached the end of their functional life.

The MacArthur foundation and its butterfly diagram highlight the importance of transitioning from a linear economy to a circular economy. This transition emphasizes the need for products to be designed with durability, repairability, and recyclability in mind. Planned obsolescence directly contradicts the principles of a circular economy by encouraging waste and hindering resource preservation. Products should be designed, from the earliest stages of development, to maximize their lifespan and minimize their environmental impact.

 

 

 

GPM has built this into its foundation, as shown through the P5 Ontology. This ontology captures the interconnectedness of sustainability, circular economy principles, and consumer behavior. Businesses should consider people, planet, and prosperity, and should do so across the processes of the development project, the impact the product that is being produced, along the entire lifespan of that product.

 

 

As society becomes increasingly aware of the detrimental effects of planned obsolescence, there is a growing movement towards sustainable and ethical consumption. Consumers are beginning to prioritize longevity, repairability, and environmental impact when making purchasing decisions. Companies that embrace these values and offer durable, upgradeable, and environmentally friendly products are gaining traction in the market.

Ultimately, transitioning towards a more sustainable business model that prioritizes longevity and environmental consciousness will benefit both the planet and consumers in the long run.

Michael Pace

Dr. Michael Pace is GPM's Director of Academic Practice, focusing on training and educating project managers on how to do their work efficiently, effectively, and sustainably. He holds a BS in forensics, an MS in forensics, and a PhD in business management; he is working towards a doctorate in education (EdD) at the University of Glasgow. He is certified in project management, portfolio management, agile methods, sustainability, cultural intelligence, and leadership; moreover, he has 20 years of experience in project, program and portfolio management across multiple sectors. He has consulted, mentored or taught in over a dozen countries across four continents - with plans to hit all seven - and has published books, chapters and articles on project management topics that focus on methods and practical skills. Additionally, he is the primary creator of a patented method to simplify the explanation of complex laboratory results to healthcare providers. Dr. Pace also serves as President Emeritus of IPMA-USA; an Assistant Professor of Practice at Texas A&M University's Mays Business School; a faculty affiliate of the Texas A&M Energy Institute; director of several study abroad programs in entrepreneurship & sustainable management; as well as a consultant for strategic planning projects.

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