Circular Economy and Societal Implications

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Executive Summary

Sustainable development and the circular economy are among the most relevant topics in current science. The purpose of this paper is to analyze the circular economy as a phenomenon, as well as its social consequences. Literature reviews, statistical data, academic articles, and SWOT models were used for this research. A detailed analysis was carried out with the conclusion on the interaction of the circular economy with various spheres of human life. Studies show that this type of economy allows moving from resource consumption to environmentally friendly production. It should be focused on reusing and reducing energy losses. The introduction of a cyclical economy will allow reforming society and draw people’s attention to environmental problems. With the simultaneous cooperation of community and technology, a change can be brought to the current ecological situation and the concept of hyperconsumption. Therefore, despite the difficulties in implementing such an approach, it is necessary to develop strategies for the transition to this type of economy and educate people about its benefits.

Introduction

Sustainability is one of the most studied terms among academic circles and entrepreneurs. This concept is addressed in the context of mutually beneficial coexistence. The idea of sustainability permeates management, manifesting itself in green movements for a cleaner environment (Genovese et al., 2017, p. 344). The result of the penetration of this theory into the economic sphere is the emergence of such a term as a circular economy. This type of economy means a new approach to the use of resources, combined with the reuse of materials. It is a regenerative system in which the contribution of funds is minimized through long-term design (Geissdoerfer et al., 2017, p. 766). The purpose of the paper is a detailed study of this administration and an analysis of its relationship with society.

Relevant Models

A circular economy has several models that reflect its essence and features. It can be most clearly expressed in comparison with a linear economy, consisting of three basic principles: “take, make, dispose of” (Esposito, Tse, and Soufani, 2018, p. 5). The circular economy can be expressed in the following words: “make, use, reuse, remake, recycle.” Thus, the basis of the model is the principle of recovery, the maximum use of the invested material (Hopkinson et al., 2018, p. 72). They consist of many components since there is no uniform model. However, there are five essential features: design out waste, build resilience through diversity, work toward energy from renewable sources, think in systems and cascades (Esposito, Tse, and Soufani, 2018, p. 7). When designing various business models, the main emphasis is made on precisely these factors.

Methodology

In this work, a qualitative analysis of the literature on the relevant topic was used as the primary research method. These writings included academic articles on the definition of a circular financial system and its relationship with the concept of sustainable development. Besides, studies were conducted on various business models with an evaluation of their relevance, their relationship with the idea of sustainability, and their impact on society. Finally, articles were examined, considering specific cases related to the circular economy from SWOT analysis models. After a thorough study of the literature, an analysis was made of the results by comparing all the information received and generating the corresponding conclusions. The data presented in this paper are statistical information from models taken from relevant sources.

Research Ethics

This work is written by the careful observance of all the principles of research ethics. The data reflected in the text is adequately cited and is an accurate display of the results without falsification. The analysis was carried out objectively, and there is no plagiarism in this paper since all materials used are cited following the Harvard citation style guidelines. The text of the research work is devoid of any discrimination and complies with all ethical and moral standards.

Literature Review

The subject of circular economics is widely covered in academic articles that focus on multiple aspects of the issue. Most researchers recognize this financial system as rapidly developing and of great interest to both public decision-makers and scientists (Merli, Preziosi and Acampora, 2018, p. 719). Part of the works considered in the course of this article defines the type of economy. First of all, a comparison is made with the current linear, unidirectional economy. Society currently lives according to its principles, without worrying about supplies (Esposito, Tse, and Soufani, 2018, p. 5). As humanity is steadily depleting the resources of the planet, a new, sustainable approach is needed. The concept of a circular economy is directly related to sustainability since it is aimed at the coexistence of nature and man. A circular financial system can be seen as part of the overall concept of sustainability, which is the balanced integration of economic indicators (Geissdoerfer et al., 2017, p. 766). Therefore, this type of economy is not just a measure to protect the environment but a way to create long-term, self-sustaining structures (Genovese et al., 2017, p. 344). Ultimately, these systems must support and influence not only the financial management and biosphere but also society.

The main problem of the current economy is the spread of consumer attitudes toward purchased products and nature in general. The circular management has a large-scale task consisting of the reorganization of public consciousness and the transition from the principle of hyperconsumption to careful attitude to each other (Hobson and Lynch, 2016, p. 22). Undoubtedly, there are opponents of this type of economy, who uphold the principle of entropy. Their main argument is that industrialization gave the massive stimulus to the financial system that brought society to the current level (Giampietro, 2019, p. 154). However, one can argue with an entropic approach to economics by studying the proposed business models. The circular economy is not a new idea and has been successfully developed for over 30 years by the members of the European Union (Hopkinson et al., 2018, p. 71). As mentioned above, this theory is associated with finances and society as it involves the introduction and rethinking of some social values.

Many economic models of the circular economy include factors aimed at taking into account the desires of the consumer. An even more important feature is the focus on partnerships and cooperation between companies and people (Lüdeke‐Freund, Gold and Bocken, 2018, p. 56). The goal of a circular economy is not only saving resources but also shifting the focus of attention to the interaction of people, preserving supplies, and caring for nature.

Findings

The literature analysis allows us to evaluate the circular economy not only as a financial model but also as a theory closely related to society. This type of management’s primary goal is the transition from a consumer attitude to nature to the processing of resources and reduction of waste. Thus, it is aimed at improving the environmental situation in individual regions and throughout the world, following the concept of sustainable development and mutually beneficial coexistence. This administration focuses on the maximum use of resources, for which almost every stage is connected with the previous ones to ensure non-waste production. This approach has successfully established itself as a utilization model both in practice and in theory. According to mathematical models, the introduction of a circular economy can reduce the consumption of new materials and resources by 53 percent in 2050 (Esposito, Tse, and Soufani, 2018, p. 5). Therefore, the circular financial system has a positive effect on the consumption of human resources.

However, the concept of this economy extends beyond the financial sphere, linking with society. This is necessary for the most effective operation of the economy since it is not enough to process production under more environmentally friendly standards. It is essential to change people’s minds and make them move away from hyper-consumption (Hobson and Lynch, 2016, p. 22). There is a possibility not only to achieve reduced resource waste and avoid environmental pollution but also to reform society, shifting its values towards caring for nature and each other.

SWOT Models

The concept of a circular economy is also considered in terms of academic SWOT models, which allows strategic planning of this initiative and its strengths and weaknesses, coupled with opportunities and threats. The question is often raised about the transition from a linear economy to a circular paradigm. However, studies show that there are more threats and weaknesses than opportunities that open up in implementing this theory. The risks are the lack of long-term plans for government agencies and the question of how these changes can be adopted in society. At the same time, there is the problem of the lack of suitable infrastructure and technologies, combined with the excessive bureaucracy of such processes. Thus, out of the five most influential factors, four are negative, which is a marker that the implementation of this technology will be complicated (Falcone, 2019, p. 216). Many researchers believe that the circular economy is, without a doubt, a somewhat useful tool. Still, the transition to it is a very radical solution that cannot be made without additional research (Paes et al., 2019, p. 9). Therefore, although this type of economy is valid, it requires further study.

Recommendations

The main recommendations on the circular economy’s topic are the further study of its practical application in society on a global scale. Although elements of this theory can be applied in current production, the full implementation of such a concept is hindered by many obstacles. Thus, there is a need for a detailed analysis of the situation in the modern world and the development of special measures. It is also necessary to create long-term plans, thinking through all possible options. Finally, society should be actively educated about the importance of preserving the environment and its resources. Such actions will allow not only painlessly making the transition to this type of economy in the future, but also change people’s minds from hyperconsumption towards the rational use of funds and materials.

Conclusions

The circular economy is not a new theory, but it is becoming increasingly important in current society. At the moment, humanity urgently needs a change in approach to the expenditure of natural resources. This type of economy will allow humanity to move from simple consumption of products to reusing to preserve the environment. However, for this, it is necessary not only to create a technological base but also to prepare the society accordingly, replacing the concept of hyperconsumption with caring. Ultimately, a circular economy can bring huge benefits, both financially and socially. Therefore, despite all the difficulties and obstacles, the development of programs for its implementation is vital and should become an essential technological, financial, and social area of activity.

Reference List

  1. Esposito, M., Tse, T. and Soufani, K. (2018) ‘Introducing a circular economy: new thinking with new managerial and policy implications’, California Management Review, 60(3), pp.5-19.
  2. Falcone, P.M., (2019) ‘Tourism-based circular economy in Salento (South Italy): A SWOT-ANP analysis’, Social Sciences, 8(7), p.216.
  3. Geissdoerfer, M. et al. (2017) ‘The circular economy – a new sustainability paradigm?’, Journal of cleaner production, 143, pp.757-768.
  4. Genovese, A. et al. (2017) ‘Sustainable supply chain management and the transition towards a circular economy: evidence and some applications’, Omega, 66, pp.344-357.
  5. Giampietro, M. (2019) ‘On the circular bioeconomy and decoupling: implications for sustainable growth’, Ecological economics, 162, pp.143-156.
  6. Hobson, K. and Lynch, N. (2016) ‘Diversifying and de-growing the circular economy: Radical social transformation in a resource-scarce world’, Futures, 82, pp.15-25.
  7. Hopkinson, P. et al. (2018) ‘Managing a complex global circular economy business model: opportunities and challenges’, California Management Review, 60(3), pp.71-94.
  8. Lüdeke‐Freund, F., Gold, S. and Bocken, N. (2019) ‘A review and typology of circular economy business model patterns’, Journal of Industrial Ecology, 23(1), pp.36-61.
  9. Merli, R., Preziosi, M. and Acampora, A. (2018) ‘How do scholars approach the circular economy? A systematic literature review’, Journal of Cleaner Production, 178, pp.703-722.
  10. Paes, L. et al. (2019) ‘Organic solid waste management in a circular economy perspective – a systematic review and SWOT analysis’, Journal of Cleaner Production, 239(118086), pp.1-12

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