2026-08-06
Right to Repair is reshaping business models – Circular Valley expects positive employment effects
The startup FixFirst with founder Sebastian Daus was part of the first batch of Circular Valley's Circular Economy Accelerator. Source: Jan Turek/Circular Valley
Right to Repair benefits consumers and the environment, but it also challenges established business models. A survey conducted by the Circular Valley Foundation shows that sales of new products in affected industries could decline by up to 30 percent, while new jobs are expected to be created at the same time.
Keeping products in use for longer instead of replacing them prematurely is a key principle of the circular economy. The European right to repair, which aims to drive this transition forward, is therefore an important step from the perspective of the Circular Valley Foundation. At the same time, it is changing the economic environment for manufacturers. Many business models have been geared towards the regular sale of new products for decades.
Products that could remain in use for many years but are often replaced with new ones are likely to be particularly affected. These include household appliances and smartphones, for example. Wear and tear is not always the reason for buying a new product. Consumers often choose a new product because of new features, a different design or technological advances.
A survey of affected companies conducted by the Circular Valley Foundation illustrates the potential scale of this shift: respondents expect sales of new products to decline by up to 30 percent. According to the companies surveyed, only around 10 to 15 percent of these losses could be offset by sales of spare parts.
Repair does not generate the same value as selling a new product
One reason is the significant difference in value between a new product and a spare part. A manufacturer can generate significantly more revenue from selling a new appliance than from selling a single spare part. In addition, repairs are often not carried out by the manufacturer itself. Instead, they are performed by local repair shops, skilled tradespeople or independent service providers.
Right to Repair therefore also changes where value is created and captured across the economy. Some of the spending that currently goes towards new products will instead flow into repair, maintenance and refurbishment – benefiting other parts of the economy.
“Right to Repair is good for consumers and the environment. For companies that have so far relied primarily on selling new products, however, this change presents an economic challenge. They need to find new ways to generate revenue from products that last longer,” says Dr. Carsten Gerhardt, Chairman of the Circular Valley Foundation.
Right to Repair could create jobs in Germany
For the German labour market, however, the overall effect could still be positive. In many of the product categories affected by Right to Repair, manufacturing already takes place predominantly outside Germany. Sales are also increasingly conducted through digital channels. A decline in the production of new devices therefore does not automatically translate into a corresponding loss of jobs in Germany.
The picture is different for repair and maintenance. These services generally have to be provided where the products are being used. This creates new jobs locally, for example in repair shops, the skilled trades and service businesses.
“If fewer new products are sold, some of the value generated by new-product sales will shift to repair and service. This could benefit Germany because repair creates jobs that are difficult to relocate abroad,” says Gerhardt.
New business models instead of relying on the old ones
From the perspective of the Circular Valley Foundation, Right to Repair is therefore about more than simply making products easier to repair. Companies need to prepare for durability and repairability to become a more important part of their business models.
This applies in particular to products that are currently manufactured at relatively low cost and replaced by a new generation after a comparatively short period of time. If these products are used for longer in the future, it will not be enough for manufacturers simply to offer spare parts. New business models are needed that allow companies to generate revenue from longer-lasting products – for example through repair, maintenance, refurbishment or additional services.
“We come from an economy in which growth has long been driven by ever-new product generations and increasingly shorter replacement cycles. Right to Repair challenges this model. The key question is therefore not how long we can preserve the old business model, but how companies can remain successful with longer-lasting products,” says Gerhardt.
From the perspective of the Circular Valley Foundation, Right to Repair should therefore not be seen solely as a burden for manufacturers. Extending product lifetimes can create new markets and employment opportunities. The key is for companies to recognise this shift early as an opportunity to develop new business models and innovate.
Products that could remain in use for many years but are often replaced with new ones are likely to be particularly affected. These include household appliances and smartphones, for example. Wear and tear is not always the reason for buying a new product. Consumers often choose a new product because of new features, a different design or technological advances.
A survey of affected companies conducted by the Circular Valley Foundation illustrates the potential scale of this shift: respondents expect sales of new products to decline by up to 30 percent. According to the companies surveyed, only around 10 to 15 percent of these losses could be offset by sales of spare parts.
Repair does not generate the same value as selling a new product
One reason is the significant difference in value between a new product and a spare part. A manufacturer can generate significantly more revenue from selling a new appliance than from selling a single spare part. In addition, repairs are often not carried out by the manufacturer itself. Instead, they are performed by local repair shops, skilled tradespeople or independent service providers.
Right to Repair therefore also changes where value is created and captured across the economy. Some of the spending that currently goes towards new products will instead flow into repair, maintenance and refurbishment – benefiting other parts of the economy.
“Right to Repair is good for consumers and the environment. For companies that have so far relied primarily on selling new products, however, this change presents an economic challenge. They need to find new ways to generate revenue from products that last longer,” says Dr. Carsten Gerhardt, Chairman of the Circular Valley Foundation.
Right to Repair could create jobs in Germany
For the German labour market, however, the overall effect could still be positive. In many of the product categories affected by Right to Repair, manufacturing already takes place predominantly outside Germany. Sales are also increasingly conducted through digital channels. A decline in the production of new devices therefore does not automatically translate into a corresponding loss of jobs in Germany.
The picture is different for repair and maintenance. These services generally have to be provided where the products are being used. This creates new jobs locally, for example in repair shops, the skilled trades and service businesses.
“If fewer new products are sold, some of the value generated by new-product sales will shift to repair and service. This could benefit Germany because repair creates jobs that are difficult to relocate abroad,” says Gerhardt.
New business models instead of relying on the old ones
From the perspective of the Circular Valley Foundation, Right to Repair is therefore about more than simply making products easier to repair. Companies need to prepare for durability and repairability to become a more important part of their business models.
This applies in particular to products that are currently manufactured at relatively low cost and replaced by a new generation after a comparatively short period of time. If these products are used for longer in the future, it will not be enough for manufacturers simply to offer spare parts. New business models are needed that allow companies to generate revenue from longer-lasting products – for example through repair, maintenance, refurbishment or additional services.
“We come from an economy in which growth has long been driven by ever-new product generations and increasingly shorter replacement cycles. Right to Repair challenges this model. The key question is therefore not how long we can preserve the old business model, but how companies can remain successful with longer-lasting products,” says Gerhardt.
From the perspective of the Circular Valley Foundation, Right to Repair should therefore not be seen solely as a burden for manufacturers. Extending product lifetimes can create new markets and employment opportunities. The key is for companies to recognise this shift early as an opportunity to develop new business models and innovate.
If you have any questions or interview requests, please contact us by e-mail at press@circular-valley.org
The image may be used free of charge for reporting purposes, provided you cite the source. Source: Jan Turek/Circular Valley.
The image may be used free of charge for reporting purposes, provided you cite the source. Source: Jan Turek/Circular Valley.
The non-profit Circular Valley Foundation brings together the relevant stakeholders. Across industries and technologies, companies, startups, academia, and policymakers are working together to develop solutions for the transformation to a true circular economy. Public relations, the world's first circular economy accelerator, and policy recommendations are the foundation's main areas of focus.
