Rethinking service in a circular economy

The circular economy (CE) narrative promotes closed-loop systems to decouple economic activity from resource depletion. However, despite increasing scholarly interest, CE remains theoretically under-explored, often guided by practical issues and theories-in-use, that are implicitly embedded in the industrial paradigm of linear value chain thinking. There is a growing number of CE scholars calling for a ‘Great Reset’ of traditional economic frameworks, suggesting a departure from capitalism. Instead of a reset, this paper proposes a recalibration of assumptions foundational to traditional economic thought and suggests an alternative economic exchange model for CE—a service-dominant (S-D) logic. S-D logic offers a holistic framework of value cocreation and provides guidance to navigate change in complex service ecosystems. The paper demonstrates that S-D logic is not only compatible with the CE narrative but also reconciles the divergent strands of CE research. It concludes by offering strategic considerations to aid firms and entrepreneurs in navigating CE transitions.