A circular economy is one which conserves inputs. Waste is minimized and resources are reused rather than being treated as waste after their initial use. The term is used to explain what is necessary to create a sustainable society - i.e. a redesign of how society and business operate.
The current economy is a linear system: resources are taken out of the ground, made into something and later thrown away. Only with a circular economy is sustainability possible.
In 2013, people around the globe bought more than 1.8 billion mobile phones. But now, nearly half of them are most likely in landfills or at homes, sitting there without any use, as their owners upgrade to newer versions. Imagine, however, if these devices went back to the manufacturers once their lifespan came to an end in order to be turned into new mobile phones. How much would that save the manufacturer in terms of raw materials and time? Or what would be the result if these devices didn't have to be replaced because they were easily repairable and upgradable?
This is what could be called a "Circular Economy" approach, a new model of production and consumption that thinks of our impact on the environment and our society as a whole. Circular Economy takes us away from the linear take-make-dispose economy we are immersed in and encourages us to rethink waste and energy use. It's an invitation to change from product design, manufacturing processes and supply chains, to consumer perceptions and our lifestyles. 
Notes and references
- shareable.net, Mar 1, 2017
- Circular economy conserves inputs - The Science Show, ABC Radio National (Australian Broadcasting Corporation), 24 September 2011.