“Smart city” is the term that has been mentioned in several papers, this might due to the fact that it is considered as an absolute solution to accomplish sustainable development and urbanization (Datta, 2015). Although there are several arguments for the real meaning of the smart city, there is no general agreement about the true meaning of the smart city as its actual benefits or a concept. However, there is one popularly used explanation which is given by Bakici, Almirall, and Wareham (2013) that smart cities are “cities that utilise information and communication technologies with the aim to increase the life quality of their inhabitants while providing sustainable development” (Bakici, Almirall, & Wareham, 2013, p. 137). From this explanation it can be spotted that information and communication technologies or ICT is one of influential variables to a transformation of a current city to a smart city. Considering ICT can be a useful tool for the modification; it may not play an important role in other definitions. Nevertheless, the definition that concerns the significance of ICT seems to be more appropriate to the citizen’s needs (Chourabi, et al., 2012). On the other hand, the city cannot remodel itself to be a smart city, it still needs several factors and other collaborations to make it possible. One of stakeholders that should be considered is a business part. Because of its impact to workforce and resources of a community, and its huge value towards city economy which can provide fund to support other factors in developing scale. Furthermore, this valuable participant, business, seems to be the most appropriate option to use circular economy model as a tool to organise suitable business for smart city. Since a present commonly used business model may not be able to provide enough efficiency, so some companies may not be able to adapt to smart cities innovation.
In present time, there are many business models or concepts that are used as tools for designing business strategy which can be applied differently depend on individually situations. However, the most common idea of every concept, current economy, is stand on the idea of linear model. Linear model can be described shortly as an industrial process and the routines that to take an advantage on resources to produce goods which finally finish in landfills or in incinerators, or in another phrase as “take-make-dispose”. From the intelligible concept of Linear model, it can be seen that there is hard to deliver any manufacture from one production time practice: generating, usage, and throwing away, to a manufacture which can reproduce and lead to a sustainable state. This acknowledgment was noticed by many scholars, practitioners and institutions, and it had led to the idea of a circular economy (Ellenmacarthurfoundation.org, 2017). Inspire of the fact that a circular economy has been developed for many years, its definitions seems to be unclear. However, there are a number of researchers who have been trying to give the description of this term. In the paper “Conceptualizing the circular economy: An analysis of 114 definitions” (Kirchherr⁎ J. et al, 2017) that analyses all of the definition of circular economy from 114 different papers, they concluded the developing of definitions by chronologically as shows in the next page (table 1). However, they noted that van Buren et al (2016) provides the most clarify definition which is going to be explained next. A circular economy implies much more than the decrease of waste through recycling, the following important ideas can describe it in more comprehensive ways:
1. decreasing the use of raw materials
2. eco-design: designing products in the way that they can easily be disassembled and reused
3. extending the lifetime of products through maintenance and fixing
4. the adaptation of recyclables in products and recovering raw materials from waste flows
A circular economy also has three aims which are clarified it objects for the creation of economic value (the economic value of materials or products increases), the creation of social value (minimization of social value destruction throughout the entire system, such as the prevention of unhealthy working conditions in the extraction of raw materials and reuse) as well as value creation in terms of the environment (resilience of natural resources).
Typical definitions of the circular economy.
Typical
Definition
(in sample) Full sample Before 2012 2012 or later Peer-reviewed Practitioner
Dimensions Reduce, reuse, recycle Systems perspective
Economic prosperity Reduce, reuse, recycle
Environmental quality
Economic prosperity Reduce, reuse, recycle
Systems perspective
Economic prosperity
Systems perspective Environmental quality
Economic prosperity Reduce, reuse, recycle
Economic prosperity
Example “CE is [a] closed loop material flow in the whole economic system […] in association with the so called 3R principles […] Taking into account economic aspects CE […] minimizes matter […] without restricting economic growth” (Lieder and Rashid 2016) “[CE] is a mode of economic development […], requires compliance with ecological laws […]. It is, essentially, an ecological economy that follows the principles of “reducing resource use, reusing, and recycling” (Zhijun and Nailing 2007) “CE is [a] closed loop material flow in the whole economic system […] in association with the so called 3R principles […] Taking into account economic aspects CE […] minimizes matter […] without restricting economic growth” (Lieder and Rashid 2016) “The core of CE [are] the ‘3R’ principles—reduction, reuse, and recycling of materials and energy. […] The approach is expected to achieve an efficient economy while discharging fewer pollutants. The strategy requires complete reform of the whole system of human activity” (Yuan et al., 2006, p.5) “[CE] is about decoupling growth from resource consumption […]. It’s about designing products [that] are easier to reuse or recycle. […] (Dupont-Inglis 2015)
Note: Most frequent 4R combination listed in ‘dimensions’. ‘Systems perspective’, ‘environmental quality’ and ‘economic prosperity’ listed in ‘dimensions’ if ≥40% in coding for at least one coder (as depicted in Tables 3 and 4). Example definitions
are abridged and thus stylized; full sample = All 114 definitions.
Table 1: the most frequent Circular Economy conceptualizations
found in the set of 114 definitions (Kirchherr⁎ et al, 2017, p.229)
Meanwhile, Ellen MacArthur Foundation also gives a quite clear picture of the concept and adaptation of a circular economy which can be summarise as following. In a circular economy, economic operation builds and rebuilds overall system condition. The concept of a circular economy recognises the emphasis of the economy demanding to work effectively at all scales – for major and minor businesses, for corporations and entrepreneurs, internationally and locally. Changing to a circular economy does not only aimed for decreasing the opposed effects of the linear economy. On the other hand, it signifies a systemic shift that shapes durable flexibility, creates economic and business opportunities, and delivers societal and environmental advantages. The ideal categorises between biological and technical cycles. Utilization occurs only in biological cycles, where nutrition and biologically-based resources (for examples cotton or wood) are created to draw back into the method through processes similar to anaerobic and composting digestion. These sets reinforce living systems, for instance soil, which provide renewable resources for the economy. Technical cycles improve and recover products, mechanisms, and supplies through tactics like reuse, repair, remanufacture or (in the last resort) recycling. Considering that the notion of circularity has great historical and metaphysical origins. The idea of response, of cycles in reality element, is not up to date and has resonances in various schools of philosophy. It enjoyed a revitalisation in industrialised nations after World War II when the arrival of computer-based studies of non-linear systems clearly publicised the complicated, interrelated, and hence uncertain nature of the world we live in – more chance to breakdown than a machine. With present innovations, digital technology has the authority to maintain the transition to a circular economy by completely growing virtualisation, transparency, de-materialisation, and feedback-driven intelligence. The circular economy model produces several key schools of thought. They include the blue economy systems approach described by Gunter Pauli; the biomimicry as articulated by Janine Benyus; the Cradle to Cradle design viewpoint of William McDonough and Michael Braungart; the industrial ecology of Reid Lifset and Thomas Graedel; natural capitalism by Amory and Hunter Lovins and Paul Hawken; and the practical service economy (performance economy) of Walter Stahel. (Ellenmacarthurfoundation.org, n.d.).
In consideration of the circular economy is a tool that can deliver an opportunity to improve resources consumption. Moreover, this concept can be reflected as another possible way to lead us to be more sustainable which is one of key characteristics that smart city should concern. However, in the present time, this chance still has got a big challenge to face with. Transitioning always need some effort to put on, in this situation we cannot deny that it also needs a huge support from every stakeholder, both money and effort. The circular economy is a new model for economy, city, and also a new idea for business strategy. This new idea can upgrade a company from an ordinary business to a sustainability enterprise which is a good chance for any business to maintain its life-cycle last long and shifting itself to be a part of smart cities. Nevertheless, this new model can cause a major change to any corporate: from business strategy to how organisation should work on operation and how commerce should design their product or service by consider from the very first beginning of using raw material to the latest of how their goods will be taking care. From this complex of change, many businesses decide to not be a participant of this great chance too soon. So, outsider have to take a role in the transition for gaining attention and awareness. We can have clearer picture of how this idea was applied through a case study of the European commission who is one of the leaders applied the circular economy in Europe. In 2012, the European commission stated in a document named Manifesto for a Resource Efficient Europe that "In a world with growing pressures on resources and the environment, the EU has no choice but to go for the transition to a resource-efficient and ultimately regenerative circular economy." Later in 2015, the European Commission announced a Circular Economy proposal which had involved “a ban on sending recyclable materials to landfill by 2025 and a target for EU states to recycle 70% of municipal waste by 2030”. However, this plan did not suitable as it supposed to be. A year later, the European Commission had to stepped back from its. The circular economy package was argued that “the package would inhibit the competitiveness of European businesses” and some critics gave opinions for the Guardian that the circular economy package could find some practical ways to embed circular thinking into the structure and support of their economies (Gould, 2015).