1.2.1 Socioeconomic Evolution and Paradigmatic Change
Today it looks like a widely accepted fact: the world is changing rapidly. Population is growing, economy is developing and knowledge gains ground everywhere, with, however, widening inequalities. Technological revolutions do occur at a high pace; air, water and soil pollution is invasive; natural resources are over-exploited; common goods are under pressure of capitalistic commodification; Planet Earth is suffering; biodiversity is threatened; human life is full of unfair and growing imbalances. Philosophical conceptions of action, political thinking and its resulting social institutionsâ management, as well as current socioeconomic handling in public or private spheres seem no more able to shape the frame of life in its diversity and in a satisfactory manner for all. âSomethingâ looks wrong. In the high interconnected and complex environment we are living in, this condition does not seem easy to change rapidly. But a paradigmatic change appears urgently needed. Comments about this are numerous, just to cite a few: âWe need a holistic economic modelâ (Brown 2017); âThe new source of competitive differentiation may lie in the internal capacity to reconfigure resources in real time; driving co-created value through global networks â (Prahalad and Krishnan 2008); âA new ecolegal order is urgently needed.â âSustainability is not an individual property but a property of an entire web of relationships, and it always involves a whole communityâ (Capra and Mattei 2015); âThe breakaway from linear models obviously applies to tangible resources, but it must also include intangible resources such as knowledgeâ (Radjou 2017); âWe need better business principlesâ (Hamel 2012). With circular economy we are confronted with âa management revolution that requires a deep rethinking of our economic and managerial system, our lives, and what matters to us, what matters nowâ (Auerswald 2012).
It is becoming clear that we must learn to live in tune with nature and with one another, that we need a radical paradigmatic change, including sharing and solidarity practices. Application of circular principles may be considered as part of a holistic solution, of a global viable evolution; we try to understand why and how.
1.2.2 Circularity and Sustainability
The concept of circular economy is rooted in the observation of physical phenomena and natural cycles (Institut Montaigne 2016); it is an old story. As a famous saying attributed to the eighteenth-century French chemist Antoine Laurent de Lavoisier puts it, âNothing is lost, nothing is created, everything is transformed.â This expression was a reformulation of the idea expressed by the pre-Socratic Greek philosopher, Anaxagoras, who commented on nature (around 450 BC), âNothing comes into existence nor perishes, but is rather compounded or dissolved from things that are.â
However, later on, the concept of âcircularâ economy became grounded in more narrow terms: in its opposition to the âlinearâ economy. The latter, a product of the industrial revolution induced by the invention of the steam engine and its rapidly large utilization, relies on the following chain: extraction of raw materialsâtransformation into a productâconsumption of the productâproduction of waste, or in other words âtakeâmakeâuseâdiscard.â The viability of such a model, linked to enormous squandering (and in a context of growing population and limited natural resources) is not âsustainableâ in the long run. In some circumstances irreversible damage is done to the environment and its ecosystems. A famous alarm-whistle is the report published by the Club of Rome, 1972, written by Meadows, Donella et al. (1972, MIT), and often called the Meadows report. This scientific large data analysis defends the idea that infinite growth cannot be envisaged in a world of finite resources. Over- and mis-use of natural resources lead to dramatic depletion. Long before, a German administrator at the court of Saxony in charge of the mining industry and forest management, Hans Carl von Carlowitz, wrote a treaty, Sylvicultura oeconomica (1713), (printed again with annotations in 2013) in which he developed the rule that exploitation of natural resources like timber cannot exceed the quantity that nature is able to reproduce, in a given space of time. He argues that this rule is valid even if âgoodâ economic reasons, or even a decision to start a war, are alleged as dubious pretexts. Carlowitz is not well known outside of Germany, but he is considered the first to clearly formulate the concept of sustainability in forestry. Unfortunately, more than two centuries of carelessness followed.
Since the 1960s, in the field of environmental economics and management (Callan and Thomas 2015) both concepts of âsustainabilityâ and âcircular economyâ are gathering momentum (see for instance Geissdoerfer et al. 2017). These authors do link the two concepts in their recent research question, The Circular EconomyâA New Sustainable Paradigm? They state that for âacademia, industry and policymakers, the similarities and differences between both concepts remain ambiguous.â Geissdoerfer et al. make reference to several hundreds of definitions! Scott T. Young and K. Kathy Dhanda, in Sustainability: Essentials for Business (2013), a book offering immense understanding of the interaction between the needs of society versus the ecological limits on natural resources, listed more than 500 definitions of sustainability! Some of them are easy to remember, such as the term 3P, which stands for people, planet, and profits; it states that companies need to measure their impacts not only on the bottom line (profits) but also on the community (people) and the environment (planet). In that view, businessesâ responsibility extends to all stakeholders, in all domains of social life and in the long run. This global performance achievement is the core of sustainability, a very ambitious objective for entrepreneurship. Ambitious does not mean impossible. We do think that entrepreneurial initiatives are essential to tackle the huge problem of sustainability because enterprises haveâmore so than other organizations like international institutions or national statesâthe capacity to be reactive in a short time and the ability to introduce, in an autonomous way, radical change (at least in a free market economy).
Circular economy, in its classical acceptance, is linked to the idea that waste, once adequately treated, can become a resource again, through the creation of closed circular loops in the productionâconsumption chain. The diverse schools of thought, in the frame of that thinking (âcradle to cradle,â biomimicry, industrial ecology, blue economy, regenerative design, eco-design, and others) are identified in the well-known British Ellen MacArthur Foundation publications. This foundation goes further and lays out two essential elements of the circular economy: the regeneration and protection of natural capital on the one hand, and efficient use of natural resources on the other. Hence the challenge of the circular economy is to align our human production and consumption cycles with the natural regulatory functions that make up the rate of natural capital regeneration.