The circular economy: a conceptual exploration of value creation through value preservation

This chapter addresses the historical, conceptual, and theoretical development of the concept of the circular economycircular economy (CE). The essence of the CE is value preservationvaluepreservation as the economic basis of value creationvaluecreation, organised in material loops. The CE is no stand-alone economic development, but emerges amidst a series of related social economic trends, including the functional economyeconomyfunctionalfunctional economyfunctional economy, the sharing economysharing economy, and the bio-based economybio-based economy. The CE may be seen as a further elaboration of these adjacent trends, enabling them to take interrelated positions. In this chapter the concepts of value creationvaluecreation and preservation are explored and debated from the economic perspective of the CE. Additionally, we discuss the implicit promise that the CE enables a sustainable economy and society, particularly to the extent this promise holds. Against the backdrop of this conceptual exploration of the CE concept, we showcase practical developments by introducing a number of empirical cases. We apply the lens of business modelsbusiness models, and circular business models circular business modelsin particular to conceptualise value creationvaluecreation. In particular, we focus on how value creation valuecreationunfolds according to the principle of value preservationvaluepreservation. This elaboration follows a recently developed classification of circular business models. circular business modelsSubsequently, we discuss the impact of future developments of the CE as a transformational and transitional challenge on the realisation of a sustainable society. We consider the CE to be a paradigm shift in economic thought and practice, leading to a fundamental turnaround of the concept of value creationvaluecreation. Given that the CE has gradually taken shape in the past decade, yet remains in its infancy, we end by providing an agenda addressing both fundamental and applied research.