The Circular Economy as the New Normal

The Circular Economy

A circular economy, however, is not "just" about cycling bare economic value. It also takes into account the need for balance and social fairness, and it does away with the zero-sum game in "classical" capitalism where one might gain at the expense of another and not add net value to the system as a whole. In a true circular economy assets are available to all, but the difference in success is defined by the total value added on a systemic level, which can in turn be expressed in monetary terms. 

This systemic approach is what makes a circular economic paradigm the model of choice. It fuses the basic idea that wealth creation and progress are goals worthy of pursuing with methodologies that ensure that these goals can be met without system depletion and ever-increasing social inequality.

Systemic collaboration demands new ways of thinking and working, and it relies much more on disclosure of key insights than on non-disclosure of competitively sensitive intellectual property. It requires supply chains to be integrated into the entire use cycle of products, so that information on the value of our goods in circulation may be preserved for future reference, and it requires transparency and open standards, not protectionism. 

Systemic collaboration further increases the awareness of interconnectedness amongst people. None of us exist in isolation and so our personal and professional ventures do not either. We have a shared responsibility for stewardship, not only for those we know, but also for those we do not know, as well as our planet as a whole, now, and for future generations. This may appear to be a lofty argument, but our success as a species fully depends on us taking this responsibility seriously. 

We all strive for meaning in our lives, we wish to connect and to pass on whatever quality we may have added to the system to those who follow in our footsteps. Meaning can most certainly be found in our joint exploration of novel ways to replace the generation of wealth with the generation and preservation of value. To do so, we invite all to ignore or overcome the reflex of self-preservation, striving to maintain the status quo, and innovate in a more radical fashion, finding systemic interrelatedness as a welcoming framework for collaborative approaches.

The Definition of a Circular Economy

The circular economy is an economic and industrial system that prioritizes the reusability of products and raw materials. The restorative power of natural resources is the starting point for a sustainable system where value destruction is minimized and value creation is optimized. This is opposite to the linear system in which economic growth is accompanied by using up non-renewable resources, disposal after use, and where the objectives do not directly relate to shared value creation. 

The current ideas around the circular economy are not new. They stand on the shoulders of giants like Walter Stahel's performance economy, Gunter Pauli's 'blue economy', the systems thinking of Donella Meadows, and the work of Michael Braungart and Bill McDonough who introduced Cradle-to-Cradle. The recent enthusiasm also brings much fragmentation and diffusion, leading for example to more than 114 definitions for the circular economy.