New business models for a radical change in resource efficiency

•Principles of the circular economy are outlined and new business models are discussed.•Ecosystem services must be incorporated in business models.•The era of declining commodity prices is over.•Energy (exergy) will be an important factor in future business models.

Beginning with an analysis of the business constraints imposed by increasingly scarce resources, in this paper I make the case for a ‘circular economy’. The principles of this approach are outlined, as is the need for new business models. I also discuss incentives to stimulate enterprises to enter the circular economy.