History of the Circular Economy.

The
Historic Development of Circularity
and the Circular Economy
Walter R. Stahel

The Historic Development

Nature is built on circularity principles, with no waste and without time pressure
and financial constraints: witness the water and carbon cycles, the weather and
seasonal cycles. However, if mankind floods nature with waste, be it CO 2 in the
atmosphere, plastic objects in the oceans or objects in space, nature may take a
long time to absorb the ‘new food’, and the solution may not be to our liking:
when fish eat plastic molecules instead of plankton, people will eat plastic fish,
with unknown effects on human health.
Early man had to cope with whatever resources were available and could be
used as, or transformed into, shelter, food, products or tools. This was a circular
economy based on scarcity, as expressed in an old New England maxim: use it up,
wear it out, make it do or do without. Circularity was a necessity for most; only the
rich and mighty lived in relative comfort. This situation can still be found in less
industrialised countries.
More than two hundred years ago, the Industrial Revolution enabled society to
overcome scarcities of shelter, food and objects. Extensive iron ore and coal
mining led to the development of iron and steel, and steam engines became more
productive and powerful machines than horses. Hundred years later, electricity
enabled men to conquer the third dimension in mobility and to decentralise the use
of power; electric cables replaced transmissions. These new energies enabled mass
production of anything and turned scarcities first into plenty, then abundance and a
plethora of waste.

W. R. Stahel (B)
Product Life Institute, Geneva, Switzerland e-
mail: wrstahel2014@gmail.com
Circular Economy of the European Commission, Brussels, Belgium

© Springer Nature Switzerland AG 2020 7

8 W. R. Stahel

S. Eisenriegler (ed.), The Circular Economy in the European Union, https://doi.org/10.1007/978-

3-030-50239-3_2
But throughout this period, reuse and repair approaches of the circular economy
have remained omnipresent in society, silently and invisible. Next to the deafening
noise and visual attacks of the publicity of the linear industrial economy, people
are unaware that numerous small repair shops flourish as SMEs outside their fields
of interest, such as shoemakers and violinmakers, and that they are constantly
buying and selling used objects such as coins and banknotes, or trading goods with
others through garages sales and charity events in a circular economy simply
because it makes common sense. Economists focused their attention on
manufacturing and regarded activities related to the utilisation of goods as
unproductive and negligible services.

The Pioneering Phase of the CIE

The tide started to change in the early 1970s, at the end of the golden quarter
centuryofhigheconomicgrowth,whichfollowedtheSecondWorldWar.Amongthe
thinkers questioning mainstream economics was a group of American economists
(Hermann Daly, Fay Duchin, Roberto Costanza, Hazel Henderson and others,
many of which have been members of the Club of Rome), the Chilean Max Neef
(barefoot economics) and most visibly Donella H. and Dennis L. Meadows et al.
who wrote the 1972 report The Limits to Growth to the Club of Rome. European
cornerstones were economists like Nicolas Georgescu-Roegen (1973 The entropy
law and the economic problem) and Fritz Schumacher (1974 Small is beautiful—
economics as if people mattered). They laid the foundation for a new economic
thinking. In his 1974 book Zen and the art of motorcycle maintenance, Robert
Pirsig described caring in operation and maintenance as a key—non-economic—
quality necessary to succeed in the circular economy.
As the built environment is the chief sector of resource consumption and waste
production, architects and engineers started to research different aspects of the
CIE. Intrigued by the coincidence of high unemployment in Europe and exploding
oil prices worldwide—the oil price shock of 1973—Stahel and Reday analysed the
potential for substituting manpower for energy on a micro-economic and sectoral
level in shifting from a linear industrial economy (LIE) to a circular industrial
economy (CIE). Their 1976 research report to the Commission of the European
CommunitiesinBrusselsfirstdefinedaneconomyinloopsanditsimpactsonsociety; the
report clearly showed the economic superiority of reusing goods over recycling
materials—what they called the axiom of the smallest loop.
US architects and engineers also looked at the link between energy, labour,
waste
prevention,resourceconservationandmoney.In1976,BruceHannonetal.published
areportenergyuseforbuildingconstruction,asummaryofwhichwaspublished1978 in
Science under the title of Energy and Labor in the Construction Sector. In 1977,
W. David Conn, school of architecture and urban planning, University of
California, wrote a chapter Consumer product life extension in the context of
History of the Circular Economy. The Historic Development … 9

materials and energy flows, for a book on resource conservation: social and
economic dimensions of recycling; followed in 1978 by a study in support of
policy development for waste reduction, Factors affecting product lifetime, for the
National Science Foundation in Washington, DC., and in 1979 an article on
developing a tentative model of disposal decisions.
In 1978, the Commission of the European Communities circulated a case study
influence de la durabilité sur le bilan énergétique (impact of long product-life on
energy consumption), researched by CPR/RPA, a French consultancy. In 1979, the
Centre for Alternative Industrial & Technological Systems (CAITS) at the North
EastLondonPolytechnicpublishedareportEnergyOptionsandEmployment,which
also looked at technological upgrading of buildings to reduce energy consumption,
and John D. Davies of Loughborough Consultants (and the Schumacher circle in
London) made his report available on a long-life car project an assessment of
feasibility. Almost simultaneously, BMFT, the German Federal Ministry of
Research and Technology commissioned Porsche, the car manufacturer, to do a
similar study. Then, in 1980, Orio Giarini, an economist who first wrote about—
and taught at the Université de Genève—the Service Economy, published
Dialogue on Wealth and
Welfare.
In the 1980s, the interest for the CIE started to reach outside academia. The first
CIE publication by OECD Paris was published in 1982 Product durability and
product life extension, their contribution to solid waste management. This report
written by an English consultant was probably the first policy publication on this
subject in Europe. Also in 1982, the Mitchell Prize competition on the role of the
private sector in a sustainable society took place in The Woodlands, TX.,
sponsored by Cynthia and George Mitchell, a Texan business man involved in oil
exploration. Stahel was awarded a prize for a paper titled The Product-Life
Factor; other prizewinners included Amory and Hunter Lovins and Peter Senge.
Also addressed to the business sector was Robert T. Lund’s 1983 start-up
guidelines for the independent remanufacturer. Lund worked at the MIT in
Cambridge, Mass. and intensively researched the US remanufacturing industry,
publishing many more studies on this topic in the following years.
Attheendofthe1980s,theideaofafunctionalserviceeconomywasfirstproposed in
Europe. The 1987 report by Börlin and Stahel Wirtschaftliche Strategie der
Dauerhaftigkeit - Betrachtungen über die Verlängerung der Lebensdauer von
Produkten als Beitrag zur Vermeidung von Abfällen (economic strategy of
durability—evaluating the product-life extension of goods as a contribution for
waste prevention). The study analysed 30 Swiss companies living primarily from
service-life extension activities, included a first case study on selling goods as a
service (AGFA photocopiers) and was financed by a major Swiss bank. Two years
later, Giarini and Stahel published The Limits to Certainty, facing risks in the New
Service Economy (1989) providing the economic background of the functional
service economy. In 1991, Stahel researched three case studies for the Ministry of
Environment of BadenWürttemberg Langlebigkeit und Materialrecycling,
Strategien zur Vermeidung von Abfällen im Bereich der Produkte (long-life
products and material recycling, strategies to prevent waste in the use of products)
—the first study detailing the waste minimisationpotentialofservice-
10 W. R. Stahel

lifeextensionandthesustainabilityofsellinggoods as a service (clothes washing

machines in laundromats). A few years later, Germany enacted its first law of a
circular economy, which focused on recycling; reuse was considered to be
unrealistic.
In the early 1990s, the CIE gained increased attention in the USA. The National
Academy of Engineering and the National Academy of Sciences organised annual
conferences and workshops on a potential economic paradigm shift; and the
Industrial Designer Society of America (IDSA) published 1992 its 12 Principles of
EcoDesign. Companies became increasingly interested in the CIE and the
Functional Service Economy, culminating in 1994 with a first case study Xerox:
Design for the Environment of the Harvard Business School on this topic. Little
distinction was yet made between Design for the Environment, selling goods as a
service and the CIE,
exceptintheworkoftheNationalAcademyofSciences(Stahel1994,1997).Thisand the
number of reports analysing various industrial sectors by different researchers in
Europe (Davis, de Gregorio, Ruyssen) and the USA (Conn, Hannon, Lund)
suggest that the CIE is an example for the simultaneous and spontaneous
emergence of an idea the time of which had come. The distinction between the
CIE and the Functional Service Economy now becomes increasingly important to
develop successful business models and policies, as does the role of design for
environment versus designing sustainable solutions (Stahel 2001).
The CIE is focused on the use phase of objects; its objective is to manage stocks
(assets,capitals)andtomaintaintheirvalue.EconomicgrowthintheCIEismeasured as
an increase in quality and quantity of all stocks. And the CIE is holistic, including
all assets, be they natural, human, cultural, manufactured or financial assets. The
CIE is sustainable because it decouples wealth (value) creation from resource
consumption. The value of objects now depends on their use value, no longer on
newness and fashion; the development of new skills, such as operation and
maintenance, as well as the preservation of old skills to restore historic and
heritage objects is important; Eco-Design (called Design for Environment in the
USA) is a conscious corporate decision to minimise environmental impairment.
The Functional Service Economy, later called Performance Economy (PE), is
focused on the functioning of system. It integrates the approaches of the CIE, but
in addition maintains the ownership of objects. The PE is sustainable because it
internalisesallcostsofliability,risksandwaste.Itsellstheperformanceofobjects,for
example through rental or leasing contracts; its customers are users, not
consumers; designing sustainable solutions becomes a corporate strategy to
maximise long-term profits, the environmental advantages come automatically
with it.

A Caring Motivation and Industrialisation of Stock

Management Characterise the CIE

Thisnewpost-industrial‘economyinloops’,whichstartedtoappearinindustrialised
countriesinthe1970s,differsfromtheearliercirculareconomy intwoways:acaring
History of the Circular Economy. The Historic Development … 11

motivationandanindustrialisationofthemanagementofstocks.Becausethecircular
economy is no longer a necessity, based on scarcity or poverty, it needs the
personal motivation of economic actors and consumers who renounce
consumption in order to reduce environmental impairment both at the beginning
and at the end of pipe. Social
factorssuchasreligiousconvictionscanalsoplayarole,witnessthesufficiencyideals of
the Amish people in the USA and the modesty ideals of Buddhism in Asia. Caring
becomes a key factor of sustainability.
The industrialisation of managed stock goes beyond the circular economy of
reuse and repair services for individuals; it builds on new capabilities such as the
remanufacturing of components and goods, and the technological upgrading of
technical systems. A broad CIE emerges, based on saturated mass markets and in
direct competition with the LIE. Wijkman and Skanberg have shown in their 2016
research that also on a macro-economic level, the CIE is substantially reducing
carbon emissions—by about 65%—while simultaneously increasing national
employment—by about 4%—and improving the trade balance, substituting
manpower for energy in a regionalised economy.
It is important to understand this issue of discontinuity: less industrialised
countries are ruled by a circular economy of scarcity and poverty, by necessity. In
industrialised countries with saturated markets—when the number of new goods
coming to market is comparable to the number of similar goods going to waste—
the CIE is a conscious choice to cope with abundance and to reduce waste. The
missing link are strategies enabling societies to shift from a circular economy of
scarcity to one of abundance, without passing through a wasteful consumer society
based on fashion and emotions and the resulting waste problems.
China, India, Africa, South America are some of the major regions facing this
issue. India, for example, relied for decades on shared public transport and a car
industry based on two models, Ambassadors and Fiat 1100, which at the end of
their lives were returned to the factories for remanufacturing, technological
upgrading and remarketing. With the arrival of domestically produced modern
cars, emotions and fashion have replaced function and scarcity. The new car
manufacturers’
responsibilityendsatthepointofsale;nobodyisinchargeofoptimisingthesystemconsisti
ng of infrastructure, cars and human health. India is faced with constantly
increasing volumes of vehicles, air pollution and end-of-service-life car waste.
Hindustan Motors, the (re)manufacturer of the Ambassador in Calcutta, closed
down in 2016.

The ‘Inherent Locality’ and a Broad Set of External Trends

Are Driving the CIE

The unstoppable advance of the decentralised CIE is due to an ‘inherent locality’

and fuelled by a broad set of external trends. The resources of the CIE are endof-
service-life objects, locally dispersed where the clients are, their density is low,
roughly following population density, and they are of a huge diversity. By
12 W. R. Stahel

contrast, the natural resources of the LIE—ores in mines and oil in underground
deposits— are relatively homogeneous and concentrated in some geographic
regions, which are often distant from the LIE manufacturing sites and customers.
The most efficient activities of the CIE are thus local and small scale, near its
resources and customers. Concentrations of stock can only exceptionally be found,
for example in ageing infrastructure which needs to be remanufactured or
replaced.
Drivers of the CIE are also a set of external trends of techno-economic nature
related to intelligent decentralisation, longer-life technologies, reusability as a new
industrial quality, the growing Performance Economy (PE) and social autonomy
trends:

• the trend to intelligent decentralisation is visible in additive manufacturing (3-D

printing),micro-productioninmedicineandfood,teleworkingandmanufacturing
processes using local robots instead of the cheapest labour globally.
• the trend of longer-life technologies is exemplified by electric motors with a
technical life of hundred years, which are set to replace combustion engines
with a life of 30 years, and maintenance-free electronic equipment replacing
mechanical objects subject to wear and tear.
• the trend to reusable high-technology objects is led by SpaceX and its Falcon
rocketsandDragoncapsules,andtheUSAF’sunmannedX-378Bspaceplane,both of
which are cheaper to operate than similar single-use objects. Also concerned
are IT components based on nano-technology, for which reuse becomes the
only option to preserve resources because the components cannot be recycled
economically.
• the CIE grows because it is an integral part of the growing PE (Stahel 2010),
where manufacturers become fleet managers selling performance, function and
goods as a service instead of selling goods, retaining ownership and
internalising the liability and costs for risks and waste over the full service life
of objects.
• social trends of a ‘sharing society’ strengthen circularity: repair cafés, barter
tradesandotherself-helpformsofnon-monetarycircularityaregainingpopularity in
many countries. Profusers (profound-users), who maintain and operate their
physical objects, are replacing the Do-it-Yourself activities of the past, helped
by websites with repair knowledge and instructions, such as www.iFixit.com,
the free repair manual.
Intheearlytwenty-firstcentury,theCIEphilosophyhadprettymuchfallenasleep,
except for an attempt by Braungart and McDonough to structure and trademark the
CIE knowledge in order sell it to individual companies under their Cradle to
Cradle trademark. The German chemist Michael Braungart had been one of the
first to promote clean non-toxic production and recycling methods in Europe, the
US architect William McDonough joined him with his experience in the built
environment. From their original 2002 book Cradle to Cradle, their activity today
evolved into a ‘design framework for going beyond sustainability and designing
for abundance in a circular economy’.
History of the Circular Economy. The Historic Development … 13

In Europe, the broad breakthrough of the CIE is due to the famous sailor Ellen
MacArthur—Dame Ellen—who made the CIE the centre of activity of her
foundation,whichstartedin2010.Throughpublications,conferencesandthecreationoft
he CE100clubofeconomicactorsshesucceededinunitingmostoftheCIEthinkersand
within five years made the CIE a household name in Europe, lately also spreading
to India. On a European political level, the breakthrough of the CIE came in
December 2014 when the European Commission sent its European CE Package to
the European Parliament, naming reuse and waste prevention as number one
priorities. In 2017, the European Parliament sent a revised version back to the
European Commission; it is now in the process of being harmonised before the
European Parliament can pass it into law.
The breakthrough in Asia came in 2006 when China’s Nation Development and
Reform Commission (NRDC) presented the CIE as an alternative development
model, and the CIE was integrated as a central topic into the five-year plan of
economics social development, culminating in 2008 in the release of the Circular
Economy Promotion Law, which was endorsed in 2009, after a politico-economic
campaign led by Professor Zhu (2009) from Tongji University in Shanghai, today
chair professor of green economy at UNEP-Tongji Environment and Sustainability
Development Institute. In 2011, the China Association of Circular Economy
(CACE) was founded, which organises a yearly conference on the CIE.
Major obstacles to a rapid advancement of the CIE are biased framework
conditions and a lack of training and education. If nature is a self-organised system
of virtuouscycles,thentheeconomyisasystemdrivenbyentrepreneurship,regulations,
humandesiresandpolicymaking.ThecompetitivenessofmanagingstocksintheCIE
over managing flows in the linear industrial economy (LIE) has long been blurred
by subsidies on the production and consumption of natural resources, on transport
costs and waste elimination. Together with high taxes on labour, this punishes the
labour-intensive CIE which is local, consumes few resources and produces little
waste. Alternatives such as ‘sustainable taxation’ start to be discussed (Stahel
2013): in addition to not taxing labour, value-added tax (VAT) should—true to its
name— not be applied to the value preserving activities of the CIE; and carbon
credits should be given to the prevention of CO 2 emissions in the CIE to the same
degree as they are given to reductions in the LIE.
Political leadership will accelerate the transition from the present to the future
without jeopardising the economy. Sweden is leading Europe with its law reducing
VAT on repairs, allowing individuals to deduct the labour costs on repair from
their income. In the USA, eleven States already do not tax human labour; another
dozen US States are looking into this option.
The economic and technical knowledge and know-how of the circular economy
exists in SMEs and with fleet managers; the challenge is to transfer this wisdom
into all classrooms and boardrooms in order to speed up the transition from a
throughput to a CIE and PE. Countries which succeed in doing this rapidly will
take the lead in sustainable competitiveness. Industrial sectors which succeed in
combining the preservation of existing stocks with quantum leaps in technology
and science will become industrial leaders.
14 W. R. Stahel

The Future of the CIE

The objective of the CIE is resource preservation; the challenge therefore is

optimising the material, energy and water resources embodied in objects and
materials. The line of attack to achieve this is techno-commercial strategies in the
‘era of R’ for goods, and opportunities of scientific and technologic innovation in
the ‘era of D’ for materials.
The ‘era of R’ comprises techno-commercial strategies to reuse, repair, restore,
remarket, remanufacture and reprogramme objects as well as to re-refine and
recycle catalytic chemicals, such as lubrication oils. Also needed is related
innovation in marketing, policymaking and R-technologies: reuse options lead to
innovation in manufacturing as used banknotes or bottles, for instance, do not
come in identical batches and need tolerant equipment (Automated Teller
Machines (ATMs), bottling plants) to cope with the qualitative variations of reused
goods.
At some point, however, the options of the ‘era of R’ will be exhausted. A few
objects may become part of national heritage, but the majority will enter the ‘era of
D’ (Fig. 1).
The ‘era of D’ comprises technologies and policies to de-link assemblies,
depolymerise, de-alloy, de-laminate, de-vulcanise, de-coat materials in order to
recover atoms for reuse; and to de-construct infrastructure and high-rise buildings
in order to reuse materials, and related innovation in D-technologies.
Waste and secondary resources are a thing of the past if atoms or molecules can
be recycled to the quality and purity of virgin material, such as sr-PET (self-
reinforcing PET), which can be remelted and reused indefinitely.
Backcasting: View of a mature WinK

From old goods to

as-clean as new D-
raw materials Innovations innovative
(atoms) materials &
point of end Atoms components
of life of
goods
Production

Point of sale
of new goods

Product use

R-Inno- Economy in cycles WinK

vations maintains values, quality
and quantity of goods
17.11.2016 MPI Magdeburg 1

Fig. 1 The structure of a mature circular industrial economy (in German WinK, Wirtschaften in
Kreisläufen). Source Stahel (2016)
The highest competitiveness and profit potential of CIE innovation may lie in
the ‘Era of D’. Many new technologies and processes in chemical engineering and
materialsciencescanbepatented;corporateincomethencomesfromlicensingknowledg
e instead of selling materials. Mining countries are looking at these options—
whoever is first wins. The Ana Intercontinental hotel in Tokyo was the first high-
History of the Circular Economy. The Historic Development … 15

rise building to be sustainably deconstructed, disassembled top down in a turban-

like closed top with minimal noise and dust emissions. Bringing items down
efficiently from the top of a high-rise building enables recovering the energy spent
on hoisting them up in construction, making deconstruction a low carbon activity.
The biggest societal benefits potential of CIE innovation is the ‘era of R’—
reuse, repair and remanufacture offer ample techno-economic opportunities in a
skilledlabour-
intensiveregionaleconomy.Societythereforeneedspolicyinnovation:labour is the
only renewable resource, which in addition can be educated but will deteriorate
ifunused.Stoptaxinglabourandtaxthingsyoudonotwant:emissions,consumption of
non-renewable resources, waste.

The Performance Economy as the Peak of the CIE

A new trend emerged in highly industrialised countries when people around the
year 2000 started to give up car ownership in favour of car sharing and public
transport, swopping the emotions and fashion of the LIE for the function and
efficiency of the Performance Economy. What looked like a revolution to many
has existed for some time. By renting such objects as apartments, vehicles or
offices and by selling the use of such objects as hotel rooms, aircraft seats and
taxis, economic actors have for a long time been selling the performance of objects
in a system context, not the objects themselves.
In this sharing economy, the responsibility for use is shared between the
owners’ liability and the users’ stewardship for responsible use. Ownership and
liability become fuzzy when people share the use of such public objects as trains,
concert halls, swimming pools and libraries. The common dominator of all rental
and sharing businessmodelsiscaring—
theoppositeofvandalismandneglect;theultimatefailure is the Tragedy of the
Commons, witness air and water pollution, overfishing, plastic waste in oceans,
greenhouse gas emissions and space waste in the atmosphere.
The PE integrates the CIE, but in addition profitably exploits both sufficiency
and efficiency strategies as well as systems solutions. Lighthouses are a good
example for holistic systems solutions: they have contributed more to the safety of
shipping and the quality of life of sailors and the well-being of seagoing nations
than any technical improvement to ships. They are durable, functional, reliable and
have been adapted to technological progress for centuries. But if holistic or
systems solutions are the sustainable optimum, who is in charge of them? Our
society is organised in silos, focused on specialisation and scientific disciplines; in
business, academia and policymaking, decisions are taken in silos, not in holistic
contexts. We may need to fundamentally rethink policies and economics. This
formidable challenge, which society is facing in the shift towards a sustainable
future, is anticipated in the shift from a LIE to a PE.
In the last few years, the Internet of Things (IoT) has opened a vast new field of
applications of the PE. When profits come primarily from exploiting the function
and use of goods as well as the data created, manufacturing becomes a means. In
16 W. R. Stahel

the virtual world of Internet, social networks, smart phones, wearable IT and
ultimately the IoT, everyone has become a producer of data, e.g. through wearable
and driveable electronic devices, the data of which are gathered by global giants
like Google, Apple or Amazon and commercialised in the global ‘Big Data’
markets. Where are the dwarfs to contain the new Gulliver? Will users become the
losers in the Big Data race because regulators and legislators did not plan the
safety barriers on the data highways?

The Choice Between Throughput and Stock Management

Ownership, liability and control could become confused in the IoT if

manufacturers continue to sell objects such as smartphones in the business mode
of the LIE, but try to retain a digital control in order to prevent the remarketing of
the object or its components by third parties, which is the prerogative of retained
ownership in the PE. Apple, for instance, has developed a robot capable of
dismantling iPhones in order to reuse components in manufacturing, but still sells
the smartphones in order to maintain its revenue stream.
Economic actors cannot have the cake (stock ownership) and eat it (flow
revenue). LIE and PE are two business models which are worlds apart. Companies
that make a clean change will be the winners. Policymakers should make a clear
distinction between sharing economy (rent-a-good) and sharing society (public
spaces and ‘commons’) as ownership, liability and control greatly differ. Society
will need rules for sharing and for punishing abuse, finding a holistic path that
allows all to benefit from the digital revolution and democracy while integrating
Big Data and Artificial Intelligence.
I am an optimist; the future will be bright, because the champions of the circular
economy are numerous: there are hundreds of reuse champions, even if they are
not always recognised as being part of the circular economy, such as second-hand
markets, auction houses, such websites as eBay and antique dealers who ‘buy junk
andsellantiques’.InadditiontoinnumerableSMEsmaintainingequipment,vehicles,
goods,garments,infrastructureandbuildingsintheCIE,thereareincreasingnumbers of
self-help groups in the sharing society, such as hundreds of repair cafés and such
websites as www.ifixit.com who are society’s invisible circularity fabric.
The actors of the PE selling goods and molecules as a service are the champions
of the CIE. They include manufacturers active in the functional service economy
like Xerox, Rolls Royce and Caterpillar, chemical companies leasing their
chemicals, as well as fleet managers, such as airlines and shipping lines, armed
forces, taxis and
hotels.ThePEs’fieldsofactivitiesarebroaderandmorecompetitivethanthoseofthe CIE
because they embrace systems solutions and exploit prevention and sufficiency, in
addition to efficiency, strategies. This opens numerous new business models both
on the supply (such as Private Finance Initiatives and rent-a-molecule) and
demand side (such as sustainable public procurement of buying objects as a
service). The PE rapidly expanded with the growth of the Internet of Things (IoT).
History of the Circular Economy. The Historic Development … 17

As users now become prod-users, producers of personal data, policymakers are

challenged to redefine the protection of authorship (intellectual property rights).
Sharing and caring are the basis of a sustainable society; because caring is a
personal and cultural attitude which cannot be imposed by policymakers, abuse
may lead to developments that end in Tragedies of the Commons. This is the side
of a PE which technology and eco-design can hardly influence, and which could
thwart a rapid success of some of the sustainable business models discussed.

References
Hermann Daly, Fay Duchin, Roberto Costanza, Hazel Henderson and others, many of which
have been members of the Club of Rome.
Prof Dajian Zhu translated Stahel’s 2006 book The Performance Economy into Chinese and
published it in 2009.

Bibliography
This alphabetical bibliography lists the early publications on new aspects of the Circular
Industrial Economy as they developed. The fact that many names appear repeatedly is a sign
that a few pioneers led the development of the CIE especially until 2010, when the Ellen
MacArthur Foundation started to actively and successfully promote the CIE and PE. After
2010, the number of publications has grown exponentially both in print, video and e-books and
only a few lighthouse publications are still listed in this bibliography.
Börlin, M., & Stahel, W. R. (1987). Economic strategy of durability—valorisation of the
productlife of goods as a contribution to waste prevention (original title: Stratégie économique
de la durabilité - éléments d’une valorisation de la durée de vie des produits en tant que
contribution à la prévention des déchets); cahier SBS no. 32. Bâle: Société de Banque Suisse
(published in French and German). This report of 30 case studies of service-life extension and
selling goods as a service in Swiss industry identified the internalisation of all costs of risk and
of waste as the key advantage of the concept of selling goods as a service, giving economic
actors a strong incentive to prevent these costs in order to increase their competitiveness.
CAITS. (1979). Energy options and employment. Centre for Alternative Industrial &
Technological Systems at the North East London Polytechnic, March 1979.
Commission of the European Communities. (1978). Influence de la durabilité sur le bilan
énergétique (impact of long product-life on energy consumption), researched by CPR/RPA, a
French consultancy, May 1978.
Conn,W.D.(1977).Consumerproductlifeextensioninthecontextofmaterialsandenergyflows.In D.
W. Pearce & I. Walter (Eds.) (1978), Resource conservation: Social and economic dimensions
of recycling. New York and Longman, London: University Press.
Conn, W. D. (1978). Factors affecting product lifetime, a study in support of policy development
for waste reduction. Los Angeles, CA: University of California, prepared for the National
Science Foundation, Washington DC. NFS/RA 780219 final report.
Conn, W. D., & Warren, E. C. (1979). Developing a tentative model of disposal decisions.
Journal of Environmental Systems, 9(2), 129–144.
Davis,J.D.(1979).Along-lifecarproject—
Anassessmentoffeasibility.UK:LoughboroughConsultants. John Davis was a close collaborator
of Fritz Schumacher, the author of ‘Small is beautiful’, and member of the Intermediate
Technology Development Group in London.
18 W. R. Stahel

De Gregorio, G. (1982). Maintenance and repair activities. FAST Occasional Papers no. 32, DG
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