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12 Jan 2016

The Circular Economy

In parallel with the article Why The Circular Economy Matters published in The European Business Review and co-authored with Terence Tse (ESCP) and Khaled Soufani (Cambridge Judge BS), Mark Esposito, professor of Economic Strategy at Grenoble Ecole de Management (GrenobleBusiness School), is a Guest Editor for an upcoming special issue of the California Management Review on The Circular Economy.

The business journal has issued a call for papers which will examine the circular economy phenomenon (which main idea is to boost sustainability through the reuse of resources with recycling and transformation.)

4 questions to Mark Esposito

1.    Could you define the circular economy ?

Circular Economy is a paradigm shift. It is the ability to look at every aspect of production, in a way in which every part of the supply chain does not incur into a cost of production which is higher than the ability for the same resource to get replenished. It is also one of the biggest economic opportunities of our times, able to mobilize a new economic infrastructure, worth trillion of dollars

2.    Is it different from the sharing economy ? And how ?

Circular economy includes the sharing economy as part of what we define “broadening the life expectancy” of a given product/service. If many products are a direct consequence of the planned obsolescence that has engineered the short life span of products today, sharing economy helps extending the usage of a product/service for a longer period of time, for the benefit of both fixed assets (which can be utilized several times) as well as consumers, who have access to affordable services. So we can say that the circular economy is the meta framework that contemplates the sharing economy as part of it.

3.    What are the economic benefits of the circular economy ?

Companies that shift their production to the circular economy can benefit from a lower cost of procurement of the resources but more importantly are less vulnerable/exposed to the fluctuations of markets prices, since they benefit from a closer grip on how costs are generated inside of the company. Circular economy activities have already opened up new job opportunities. For example, people can take on more work by signing up as drivers for Uber, a job that is previously non-existent. Moreover, study in the UK reveals that adapting a circular economy could bring 10,000 to 102,000 net jobs, offsetting 1% to 18% of predicted skill decline in skilled employment over the next decade. But this is just the beginning. The sharing economy, as one of the possible options for circularity, helps us diversify jobs by creating new streams of productive capacity, where there weren’t before.
It is the best single-handed opportunity to truly make our societies sustainable. It is up to us to live to its premise.

4.    How is your research involved with this domain ?

Since September 2015, most of my research efforts have been directed towards the study of the circular economy, from policy making to supply chains and consumers engagements. There are several articles that have been produced on a number of academic outlets, as well as op-eds and of course the special issue on California Management Review, which will attempt to collect the latest thinking in terms of Circular Economy, from a leading academic and practitioner group of contributors, worldwide