Schools of Thought

The circular economy concept has deep-rooted origins and cannot be traced back to one single date or author. Its practical applications to modern economic systems and industrial processes, however, have gained momentum since the late 1970s, led by a small number of academics, thought-leaders and businesses.

The generic concept has been refined and developed by the following schools of thought:

Performance economy

Walter Stahel, architect and industrial analyst, sketched in his 1976 research report to the European Commission 'The Potential for Substituting Manpower for Energy', co-authored with Genevieve Reday, the vision of an economy in loops (or circular economy) and its impact on job creation, economic competitiveness, resource savings, and waste prevention. Credited with having coined the expression “Cradle to Cradle” in the late 1970s, Stahel worked at developing a “closed loop” approach to production processes and created the Product Life Institute in Geneva more than 25 years ago. It pursues four main goals: product-life extension, long-life goods, reconditioning activities, and waste prevention. It also insists on the importance of selling services rather than products, an idea referred to as the ‘functional service economy’, now more widely subsumed into the notion of ‘performance economy’. Stahel argues that the circular economy should be considered a framework: as a generic notion, the circular economy draws on several more specific approaches that gravitate around a set of basic principles.

Watch the video below to listen to Stahel talk about the performance economy.

Walter Stahel on the performance economy

Walter Stahel is an alumni of ETH, the Swiss Federal Institute of Technology, in Zurich, where he received his diploma in architecture in 1971; Founder-director of The Product-Life Institute Geneva, since 1983. Vice-secretary general and director of risk management research of the Geneva Association (International Association for the Study of Insurance Economics), since 1987. Among his publications: the Performance Economy (2006) and The Limits to Certainty, facing risks in the new Service Economy (1989/92, with Orio Giarini).