The term "circular economy" was first used in Western literature in 1980 (Pearce and Turner 1990) to describe a closed system of interactions between economy and environment.[6]​ The circular economy is part of the study of feedback from non-linear, living systems.[7]​ An important outcome of this is the idea of ​​optimizing systems rather than components, or the idea of ​​"custom design". As a generic idea it frames a number of more concrete approaches including cradle-to-cradle, biomimicry, industrial ecology, and the blue economy.[8] More often described as a framework for thinking, its followers claim that it is a more coherent model that has value as a response to the end of the era of cheap materials and fuels.

In Germany and Japan the interpretation of the circular economy is based on waste management[9]​ through the 3Rs (reduce, recycle, reuse). The underlying idea is that the current linear flow of materials (resource-product-waste) needs to be transformed into a circular flow (resource-product-recycled resource). The circular economy was approved by the Chinese Government in the 11th five-year plan as a development model for China.[6]​.

In January 2012, the Ellen MacArthur Foundation published a report developed by McKinsey & Company entitled Towards the Circular Economy: Economic and business rationality for an accelerated transition. The report highlighted the economic and business opportunity of a restorative circular model. Using product case studies and economic analysis, the report details the significant potential benefits for the European Union. It argues that a subset of the EU manufacturing sector could generate net material cost savings worth up to $630 billion p.Un. in 2025 — stimulating economic activity in the areas of product development, remanufacturing and repair. Towards the Circular Economy also identified the key decision-making blocks to transition to a circular economy, specifically in circular production and design skills, new business models, skills in building waterfalls and reverse cycles, and cross-cycles and collaboration between sectors.[10]​.

In some areas, such as the disposable packaging industry, the term is used as imagewashing, trying to maintain an unsustainable business model that barely manages to incorporate 2% of recycled materials in the manufacture of new packaging.[11]​.

There are Organizations and Projects to advise regarding the management of waste electrical and electronic equipment (WEEE).

On the other hand, in Latin America 50% of solid waste is organic matter, of which 90% is not used or goes to the trash. According to the Economic Commission for Latin America and the Caribbean, improving the efficiency and useful life of materials in our region would lead to the creation of five million jobs.

[12]​.

1. • Cost reduction: The circular economy contributes to the reduction of costs in companies due to its constant practice of recycling, avoiding the acquisition of new materials through the effective use of recently reused materials.

2. • Increase in competitiveness: The increase in competitiveness is reflected through the efficiency and optimization of resources that economic entities perform, adding that this new economic model has an advertising effect towards the consumer due to its sustainable cause.

3. • Job creation: Companies contemplating the new economic model of the circular economy increase their job offers more than generating a greater number of vacancies in the areas of quality control and production.

4. • Improves efficiency: Companies optimize their resources in a way that does not generate any environmental impact and supports its growth.

5. • Conservation of natural resources: This is done by lengthening the life cycle of materials and reducing the extraction of natural resources.

6. • New business development: The circular economy promotes the ideation of new businesses, contributing to sustainable economic growth.

7. • Innovation: This economic concept contributes to innovation, by devising new production methods, business strategies, recycling processes and consumption.[13]​.

The economy represents a sustainable option to the traditional linear model of "produce, use and dispose", seeking to greatly expand the reuse of resources and reduce waste as much as possible. Although its use faces various challenges:[14]​.

1. • Lack of economic incentives: Many companies and consumers do not find sufficient incentives to adopt circular practices. The absence of effective policies and regulations that promote recycling and reuse limits the motivation to invest in sustainable businesses.

2. • Resistance to change and ignorance: The evolution towards economic circularity requires a complete analysis of business practices and production models. However, persistent resistance to change and lack of knowledge about this concept hinders its adoption.

3. • Lack of infrastructure and technology: The lack of bases for the collection, classification and treatment of recyclable waste, as well as the need for contributions between collaborators in the supply chain, are important limitations for its operation.

4. • Regulatory limitations: The lack of support from the government and public institutions, such as financing, training and effective contribution policies, is mainly recognized as an important barrier in attracting environmental investments.[14]​.

According to Linder and Williander, a circular business model is "a business model in which the conceptual logic for value creation is based on the utilization of the economic value retained in products after use in the production of new offerings."[15]​.

Mateusz Lewandowski offers a proposal to address this need to design circular business models and presents a conceptualization of a theoretical framework called: CBMC. The CBMC consists of eleven building blocks, adapted from the Osterwalder" and Pigneur") Canvas, encompassing not only traditional components with minor modifications, but also material loops and adaptation factors. These building blocks allow the design of a business model in accordance with the principles of the circular economy, and consist of:[16]​.

1. • Value propositions offered by circular products that allow the extension of the product life, the product service system, virtualized services and collaborative consumption. Additionally, this component comprises incentives and benefits offered to customers for bringing back used products.

2. • Customer segments directly linked to the value proposition component. The value proposition design represents the fit between the value proposition and the customer segments.

3. • Possibly virtualized channels: by selling the virtualized value proposition and virtual delivery, selling non-virtualized value propositions through virtual channels and communicating with customers virtually.

4. • Customer relationships: the production underlying the order, what customers decide, social marketing strategies and relationships with community partners when recycling 2.0 is implemented.

5. • Income flows dependent on value propositions and comprising payments for a circular product or service, or payments for the availability, use or performance provided related to the service based on the product offered. Revenue can also refer to the value of resources obtained from material loops.

6. • Main resources: choose suppliers that offer better performing materials, virtualization of materials, resources that allow regenerating and restoring natural capital and resources obtained from clients or third parties intended to circulate in material loops (preferably closed).

7. • Key activities focused on increasing performance through good internal management, better process control, equipment modification and technological changes, sharing and virtualization, and improving product design, preparing it for material ties and becoming more environmentally friendly. Key activities could also include lobbying activities.

8. • Key partnerships based on choice and cooperation with partners, along the value chain and supply chain, that support the circular economy.

9. • Cost structure reflecting the financial changes made in other components of the CBM, including the value of incentives for clients. Special evaluation criteria and accounting principles must be applied to this component.

10. • Take-Back System: the design of the return management system including the channels and customer relationships related to this system.

11. • Adoption factors: The transition towards a circular business model must be supported by various organizational capabilities and external factors.

The EC does not intend to change the paradigm of maximum profit for companies. Rather, it suggests an alternative way of thinking about how to gain lasting competitive advantage while simultaneously addressing the environmental and socioeconomic concerns of the century. In fact, moving away from linear forms of production can often lead to the development of new distinctive skills along the value chain and, ultimately, superior profits that reduce expenses, improve efficiency, comply with stricter regulations and respond to the expectations of the most environmentally sensitive consumer. But, despite the numerous examples of companies in all sectors that have successfully adopted circular solutions and despite the large number of opportunities that still exist, decision-making on CE remains a very complex exercise that requires the clear definition of specific circular actions adaptable to the company's profile and objectives. The complexity and disorientation on the subject is still strongly felt by the majority of companies (especially SMEs), which perceive circular strategies as something that does not apply to them or that is too expensive and risky to implement.[17]​ This concern is today confirmed by the results of ongoing monitoring studies, such as the Circular Readiness Assessment.[18]​.

Business strategy is the scope of administration and management sciences that allows companies to carefully evaluate their CE-inspired options, but also to divide a company into its parts and investigate if/how/where seeds of circularity exist or can be implanted. The book Strategic Management and the Circular Economy defined for the first time a strategic decision-making process of the CE,[19]​ covering the analysis, formulation and planning phases. Each phase is supported by typical management consulting approaches and tools, such as Trees (graph theory), value chain, VRIO), Porter's 5 forces, PEST, SWOT,[20]​ the strategic clock or the Internationalization matrix – all reviewed in EC key, thus revealing new sets of questions and considerations. Although not yet fully verified, it is argued that the entire set of strategic thinking reference tools could, in fact, be calibrated with EC parameters. This argument has already been made with reference to the matrix of the strategic direction of the product with respect to the market, the Mckinsey matrix for evaluating the strength of the company with respect to the attractiveness of the sector, the BCG matrix of the stock market against the growth rate of the sector and the Kraljic portfolio matrix.[21]​.

• - Small touch monitors as substitutes for traditional menus in restaurants, reducing paper consumption and showing images of the dishes.[22]​.

• - Urban furniture converted into 24-hour information offices through smart screens, interacting with citizens and tourists and obtaining real-time data on the most visited content.[23]​.

Quite a few awards are given to projects that implement the circular economy as a main model:.

• - Young Global Leaders (The Circulars): company that qualifies sustainable projects based on the circular economy to secure their financing, make themselves known through the press and get more partners. It is sponsored by Dell and Ecolab.[24]​.

• - Golden Butler Award: This is a quality seal that recognizes a company as sustainable, awarded by the Foundation for the Circular Economy (private foundation).[25]​.

https://www.stephenjwright.com/circular-economy.

• - Portal:Economy. Content related to Economy.

• - Portal:Ecology. Content related to Ecology.

The term "circular economy" was first used in Western literature in 1980 (Pearce and Turner 1990) to describe a closed system of interactions between economy and environment.[6]​ The circular economy is part of the study of feedback from non-linear, living systems.[7]​ An important outcome of this is the idea of ​​optimizing systems rather than components, or the idea of ​​"custom design". As a generic idea it frames a number of more concrete approaches including cradle-to-cradle, biomimicry, industrial ecology, and the blue economy.[8] More often described as a framework for thinking, its followers claim that it is a more coherent model that has value as a response to the end of the era of cheap materials and fuels.

In Germany and Japan the interpretation of the circular economy is based on waste management[9]​ through the 3Rs (reduce, recycle, reuse). The underlying idea is that the current linear flow of materials (resource-product-waste) needs to be transformed into a circular flow (resource-product-recycled resource). The circular economy was approved by the Chinese Government in the 11th five-year plan as a development model for China.[6]​.

In January 2012, the Ellen MacArthur Foundation published a report developed by McKinsey & Company entitled Towards the Circular Economy: Economic and business rationality for an accelerated transition. The report highlighted the economic and business opportunity of a restorative circular model. Using product case studies and economic analysis, the report details the significant potential benefits for the European Union. It argues that a subset of the EU manufacturing sector could generate net material cost savings worth up to $630 billion p.Un. in 2025 — stimulating economic activity in the areas of product development, remanufacturing and repair. Towards the Circular Economy also identified the key decision-making blocks to transition to a circular economy, specifically in circular production and design skills, new business models, skills in building waterfalls and reverse cycles, and cross-cycles and collaboration between sectors.[10]​.

In some areas, such as the disposable packaging industry, the term is used as imagewashing, trying to maintain an unsustainable business model that barely manages to incorporate 2% of recycled materials in the manufacture of new packaging.[11]​.

There are Organizations and Projects to advise regarding the management of waste electrical and electronic equipment (WEEE).

On the other hand, in Latin America 50% of solid waste is organic matter, of which 90% is not used or goes to the trash. According to the Economic Commission for Latin America and the Caribbean, improving the efficiency and useful life of materials in our region would lead to the creation of five million jobs.

[12]​.

1. • Cost reduction: The circular economy contributes to the reduction of costs in companies due to its constant practice of recycling, avoiding the acquisition of new materials through the effective use of recently reused materials.

2. • Increase in competitiveness: The increase in competitiveness is reflected through the efficiency and optimization of resources that economic entities perform, adding that this new economic model has an advertising effect towards the consumer due to its sustainable cause.

3. • Job creation: Companies contemplating the new economic model of the circular economy increase their job offers more than generating a greater number of vacancies in the areas of quality control and production.

4. • Improves efficiency: Companies optimize their resources in a way that does not generate any environmental impact and supports its growth.

5. • Conservation of natural resources: This is done by lengthening the life cycle of materials and reducing the extraction of natural resources.

6. • New business development: The circular economy promotes the ideation of new businesses, contributing to sustainable economic growth.

7. • Innovation: This economic concept contributes to innovation, by devising new production methods, business strategies, recycling processes and consumption.[13]​.

The economy represents a sustainable option to the traditional linear model of "produce, use and dispose", seeking to greatly expand the reuse of resources and reduce waste as much as possible. Although its use faces various challenges:[14]​.

1. • Lack of economic incentives: Many companies and consumers do not find sufficient incentives to adopt circular practices. The absence of effective policies and regulations that promote recycling and reuse limits the motivation to invest in sustainable businesses.

2. • Resistance to change and ignorance: The evolution towards economic circularity requires a complete analysis of business practices and production models. However, persistent resistance to change and lack of knowledge about this concept hinders its adoption.

3. • Lack of infrastructure and technology: The lack of bases for the collection, classification and treatment of recyclable waste, as well as the need for contributions between collaborators in the supply chain, are important limitations for its operation.

4. • Regulatory limitations: The lack of support from the government and public institutions, such as financing, training and effective contribution policies, is mainly recognized as an important barrier in attracting environmental investments.[14]​.

According to Linder and Williander, a circular business model is "a business model in which the conceptual logic for value creation is based on the utilization of the economic value retained in products after use in the production of new offerings."[15]​.

Mateusz Lewandowski offers a proposal to address this need to design circular business models and presents a conceptualization of a theoretical framework called: CBMC. The CBMC consists of eleven building blocks, adapted from the Osterwalder" and Pigneur") Canvas, encompassing not only traditional components with minor modifications, but also material loops and adaptation factors. These building blocks allow the design of a business model in accordance with the principles of the circular economy, and consist of:[16]​.

1. • Value propositions offered by circular products that allow the extension of the product life, the product service system, virtualized services and collaborative consumption. Additionally, this component comprises incentives and benefits offered to customers for bringing back used products.

2. • Customer segments directly linked to the value proposition component. The value proposition design represents the fit between the value proposition and the customer segments.

3. • Possibly virtualized channels: by selling the virtualized value proposition and virtual delivery, selling non-virtualized value propositions through virtual channels and communicating with customers virtually.

4. • Customer relationships: the production underlying the order, what customers decide, social marketing strategies and relationships with community partners when recycling 2.0 is implemented.

5. • Income flows dependent on value propositions and comprising payments for a circular product or service, or payments for the availability, use or performance provided related to the service based on the product offered. Revenue can also refer to the value of resources obtained from material loops.

6. • Main resources: choose suppliers that offer better performing materials, virtualization of materials, resources that allow regenerating and restoring natural capital and resources obtained from clients or third parties intended to circulate in material loops (preferably closed).

7. • Key activities focused on increasing performance through good internal management, better process control, equipment modification and technological changes, sharing and virtualization, and improving product design, preparing it for material ties and becoming more environmentally friendly. Key activities could also include lobbying activities.

8. • Key partnerships based on choice and cooperation with partners, along the value chain and supply chain, that support the circular economy.

9. • Cost structure reflecting the financial changes made in other components of the CBM, including the value of incentives for clients. Special evaluation criteria and accounting principles must be applied to this component.

10. • Take-Back System: the design of the return management system including the channels and customer relationships related to this system.

11. • Adoption factors: The transition towards a circular business model must be supported by various organizational capabilities and external factors.

The EC does not intend to change the paradigm of maximum profit for companies. Rather, it suggests an alternative way of thinking about how to gain lasting competitive advantage while simultaneously addressing the environmental and socioeconomic concerns of the century. In fact, moving away from linear forms of production can often lead to the development of new distinctive skills along the value chain and, ultimately, superior profits that reduce expenses, improve efficiency, comply with stricter regulations and respond to the expectations of the most environmentally sensitive consumer. But, despite the numerous examples of companies in all sectors that have successfully adopted circular solutions and despite the large number of opportunities that still exist, decision-making on CE remains a very complex exercise that requires the clear definition of specific circular actions adaptable to the company's profile and objectives. The complexity and disorientation on the subject is still strongly felt by the majority of companies (especially SMEs), which perceive circular strategies as something that does not apply to them or that is too expensive and risky to implement.[17]​ This concern is today confirmed by the results of ongoing monitoring studies, such as the Circular Readiness Assessment.[18]​.

Business strategy is the scope of administration and management sciences that allows companies to carefully evaluate their CE-inspired options, but also to divide a company into its parts and investigate if/how/where seeds of circularity exist or can be implanted. The book Strategic Management and the Circular Economy defined for the first time a strategic decision-making process of the CE,[19]​ covering the analysis, formulation and planning phases. Each phase is supported by typical management consulting approaches and tools, such as Trees (graph theory), value chain, VRIO), Porter's 5 forces, PEST, SWOT,[20]​ the strategic clock or the Internationalization matrix – all reviewed in EC key, thus revealing new sets of questions and considerations. Although not yet fully verified, it is argued that the entire set of strategic thinking reference tools could, in fact, be calibrated with EC parameters. This argument has already been made with reference to the matrix of the strategic direction of the product with respect to the market, the Mckinsey matrix for evaluating the strength of the company with respect to the attractiveness of the sector, the BCG matrix of the stock market against the growth rate of the sector and the Kraljic portfolio matrix.[21]​.

• - Small touch monitors as substitutes for traditional menus in restaurants, reducing paper consumption and showing images of the dishes.[22]​.

• - Urban furniture converted into 24-hour information offices through smart screens, interacting with citizens and tourists and obtaining real-time data on the most visited content.[23]​.

Quite a few awards are given to projects that implement the circular economy as a main model:.

• - Young Global Leaders (The Circulars): company that qualifies sustainable projects based on the circular economy to secure their financing, make themselves known through the press and get more partners. It is sponsored by Dell and Ecolab.[24]​.

• - Golden Butler Award: This is a quality seal that recognizes a company as sustainable, awarded by the Foundation for the Circular Economy (private foundation).[25]​.

https://www.stephenjwright.com/circular-economy.

• - Portal:Economy. Content related to Economy.

• - Portal:Ecology. Content related to Ecology.