Introducing a Circular Economy: New Thinking with New Managerial and Policy Implications

Abstract

Since the industrial revolution, we have been living in a linear economy. Our consumer and "single use" lifestyles have made the planet a "take, make, dispose" world. This refers to a unidirectional model of production: natural resources provide our factory inputs, which are then used to create mass-produced goods to be purchased and, typically, disposed after a single use. This linear economy model of mass production and mass consumption is testing the physical limits of the globe. It is, therefore, unsustainable and a shift toward a circular economy is becoming inevitable.

Designing business models in circular economy: A systematic literature review and research agenda

“…Organizations such as the Ellen MacArthur Foundation or the McKinsey Global Institute have found this approach to be a viable model for industrial companies because it adds something more to extant sustainable paradigms (Esposito, Tse, & Soufani, ): It does not only refer to doing more with less or to be environmentally friendly, but also aims to maximize the product's lifecycle, along the whole supply chain, and convert unusable products in new sources of value of the same supply chain or others.…”

“…Accordingly, when designing their business model, companies should look at preserving resources that include energy and fuel. In addition, renewable energies can support the circular economy goal of closing loops in many areas of consumption and production (Esposito et al, ; Gilbert et al, ). Recent studies (Lopez, Bastein, & Tukker, ) have advanced resource efficiency measures or practices that companies can implement at the supply side (supply chain, internal processes, and cost structure), the demand side (value proposition, customer interface, and revenue streams), and lifecycle (use and waste phase of products) to reduce the resources needed for their goods or services.…”

“…An important theme when discussing about the management of waste is found in the “Design Out Waste.” As underlined by Esposito et al (), this term means that when products are realized according to appropriate biological and technical materials cycle, waste should not exist. While technical materials should be designed to be used with a lower consumption of energy and for several times, biological materials may be nontoxic.…”

“…First, we recognize the need for further theoretical and empirical research on the role that contextual factors can play to enhance the transition (Esposito et al, , ; Merli & Preziosi, ). This aims to create a favorable environment and a responsible political agenda that is able to leverage the technological, sociocultural, institutional, and economic features for the full transition towards a circular economy (Kirchherr et al, ; Rizos et al, 2012), by removing the barriers and limitations related to its implementation (De Jesus & Mendonça, ).…”

Managing the Introduction of Circular Products: Evidence from the Beverage Industry

“…Indeed, being circular also means reducing energy waste and, hence, exploiting renewable energies. When designing their business model, companies should look at preserving all the resources, including energy and fuel, according to the main goal of CE (i.e., closing loops in as many areas of consumption and production as possible) [28,33]. Most recent studies [34] propose Resource Efficiency Measures (REMs) or practices that companies can implement at the supply side (i.e., supply chain, internal processes, and cost structure), at the demand side (i.e., value proposition, customer interface, and revenue streams), and throughout the life cycle (i.e., use and waste phase of products), to reduce the resources needed for their goods or services.…”