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The circular economy: historical grounds

According to the European CE, strategy is considered an innovative school of thought in
sustainable development, but it is still in its infancy (Murray et al., 2017). However, its roots go
back to the earlier work of Pearce and Turner (Sacchi et al., 2018), and even countries such as
China implemented this paradigm in their economies several decades ago. Overall, the European

CE concept tries to decouple economic growth from resources depletion, encouraging waste
decrease in a transition from the ‘cradle-to-grave’ (linear economy) mindset towards the ‘cradle-
to-cradle’ process (circular one) (Gregson et al., 2015). In this sense, the factors that guarantee
the development of circular economy in a model on economic growth at the European level are
‘renewable energy, productivity of the resources, recycling rate, environmental employment and
innovation’ (Busu, 2019, p. 10). The European CE strategy implies great challenges for

socioeconomic stakeholders, especially for businesses, which must assume important risks to
transition from the linear economy to an innovative circular one. However, if firms surpass these
risks, business will be more competitive in markets (Jørgensen & Remmen, 2018). The
implications of the CE strategy on firms justify the great variety of publications focused on the
business concept of a CE and its implementation in firms (Merli et al., 2018).

Nevertheless, there is a lack of consensus on the definition of CE. Korhonen et al. (2018) stated
that the European CE definition is superficial and unorganised, an amalgam of ideas from different
scientific fields including industrial ecosystems, industrial ecology, material flows, economy,
biology, environmental economics, etc. Other authors (Lewandowski, 2016; Lieder & Rashid,
2016; Sacchi et al., 2018) reviewed the diverse existing concepts of CE in their various

acceptations. All these authors asserted that certain aspects of CE—even institutional, cultural,
or legislative issues—are missing in the literature. Murray et al. (2017) have also criticised the
current CE approach for: firstly, not including the social dimension, crucial for sustainability, and
secondly, planning weakly-based superficial goals and not foreseeing the future consequences
of its implementation.

Despite the limitations of CE, the current concept has two main contributions. First, CE recovers
the importance of the material life cycle, its value, and its quality. Second, CE offers the
possibilities of a sharing economy alongside sustainable production for more suitable production-
consumption patterns (Korhonen et al., 2018), through CE business models such as slowing the
loops (e.g. satisfying needs without the ownership of a product, extending product value,
designing long-life products, encouraging sufficiency, or prolonging product life at the end-user

level) or closing the loops (e.g. extending resource value or industrial symbiosis) (Bocken et al.,
2016).
The world's population is growing and with it the demand for raw materials. However, the supply
of crucial raw materials is limited.

Finite supplies also mean some EU countries are dependent on other countries for their raw
materials.
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