According to the Ellen MacArthur Foundation, the leading think tank on the topic, "A circular economy is restorative and regenerative by design, and aims to keep products, components, and materials at their highest utility and value at all times. The concept distinguishes between technical and biological cycles.... [and it] is a continuous positive development cycle that preserves and enhances natural capital, optimises resource yields, and minimises system risks by managing finite stocks and renewable flows. It works effectively at every scale." This is - clearly - distinct from our global, overwhelmingly linear model of take/ make/ waste, designed intentionally following WW2 to foster consumption and the 'disposable economy' and drive industrial productivity.
No question, Ellen MacArthur is the bomb, arguably the most influential team working to drive transformation across sectors and the globe, delivering ground breaking research with partners like the World Economic Forum, McKinsey, and others, and influencing both public policy and private sector action. But I contend that this definition omits one key element of a truly circular economy, in which 'resources' must also include human resources. Analogously, B-Corps seek to move from a model of prioritization of shareholder value to one in which the return to all stakeholders - people, planet, profit - is demanded. A circular economy should also advocate an inclusive model which aims to keeps people, along with 'products, components and materials at their optimal level of utility and value at all times,' assuming of course that human utility and value is also correlated with individual prosperity (think: wage share, among other critical components).
Fortunately, it turns out that while manufacturing from raw materials (dominant in a linear economy) is characterized by ~75% materials cost, with only ~25% labor cost, in at least several of the loops of circular economy, this ratio can be inverted.* Indeed transformation to more circular models has the potential to create jobs, while expanding profitability and preserving our planet.
More to come on job creation and the roles of technology and human capital in circular economies...