Abstract
The circular economy (CE) has become one of the prominent topics in both natural science and management literature over the last few decades. CE is a dual-loop regenerative system that focuses on the effective and efficient utilization of resources in the ecosystem, which is beneficial to environmental and economic performance optimization. Dual CE initiatives allow firms to increased resource eco-efficiency, as well as resource effectiveness. CE has profound consequences for economic and operational advantage. This reinforces the need for reflection on the definition that may provide guidelines to assess and advance the depth and diversity of the field. We aim to provide a definitional analysis of the CE and suggest future research streams to advance the existing literature. For this purpose, we employed a systematic literature review to collect related publications in the CE. As a result of this, a total of 91 papers were selected, studied, and analyzed. We proposed a sound definition of a circular economy that includes the main identified elements, organizational planning processes, customers and society, utilization of the ecosystem, and economic resource flows. Moreover, future direction agenda, in CE research, is suggested considering three research streams: (1) circular design as value creation and capture, (2) antecedents of key activities, and (3) consequences of key processes. There is limited empirical research conducted on CE, and much of the existing research focuses on theoretical, conceptual, and normative. A few empirical research studies are mainly cross-sectional in their focus and are confined to developing and emerging economies. We hope this study’s findings will extend the field of CE, in which some of the most influential information regarding CE literature is provided. This study suggests that the development of CE initiatives plays an important role in the growing digital transformation in the value chain. There have been limited research studies in the interface of circular economy and Industry 4.0. Future research studies may investigate the extent to which digital transformation can increase the implementation of CE, and their influence on digital performance management.
Highlights
We defined circular economy (CE) is the set of organizational planning processes for creating, delivering products, components, and materials at their highest utility for customers and society through effective and efficient utilization of ecosystem, economic and product cycles by closing loops for all the related resource flows
CE is the set of organizational planning processes for creating, delivering products, components, and materials at their highest utility for customers and society through effective and efficient utilization of ecosystem, economic, and product cycles by closing loops for all the related resource flows
Our analysis shows that the circular economy definition varied in their coverage and no comprehensive definition was identified capturing the system approach
Summary
The circular economy (CE) has been the focus of attention from practitioners and academics. CE set out “pathways to provide opportunities for the dematerialization of resources throughout the product physical life cycle” [1]. The interface of the CE and the promotion of a resilient infrastructure have interested scholars for years [1]. According to Awan et al [2], “CE is an industrial system that could be seen as a system that integrates economy with ecological design considerations and proposes a completely different way of resource utilization” A variety of conceptualizations have emerged to explain and understand CE, but none of them is unchallenged [3]. A CE is understood as the “realization of closed-loop material flow in the whole economic system” [4]
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