The circular economy and the value hill

Imagine the life of a product as a journey up and down a hill, this is the essence of the so-called Value Hill model. At the base, we have raw materials. As we go up the hill, these materials are turned into products through manufacturing, assembly, and distribution. When a consumer finally gets their hands on the product, it is at its peak value.

But here is the catch: over time, as the product is used, it starts to lose value: functionally, economically, and materially. Traditionally, that is where the story ends: the product is discarded, and the value is lost. But in a circular economy, the story continues. Instead of sliding straight into waste, the product can loop back into the system, through reuse, repair, or upcycling, for example, and start the journey again.

 

Climbing back up: What is upcycling, really?

Upcycling is emerging as a critical component of the circular economy, offering a path to restore value to products and materials that have experienced degradation through use and time. According to the Evolutionary Design concept proposed by DIPSTOR (2019), upcycling represents an upward, spiral phase within the broader lifecycle of a product, one that focuses not only on the physical material but also on the regeneration of its economic and functional value.

The approach is closely aligned with the Value Hill model developed by Achterberg et al. (2016), which visualizes the rise and fall of a product’s value over time. The concept outlines how value is created during production and peaks during use, followed by decline. DIPSTOR (2025) has further developed this model by highlighting opportunities to re-enter the value cycle post-use, through circular strategies including upcycling.

In its 2025 update, DIPSTOR reinterprets the value hill to identify the full spectrum of stakeholders essential to enabling circularity. The journey begins with raw materials (RM) and progresses through production (P1), assembly (P2), and distribution (DI), culminating in the hands of the consumer (C), at which point the product reaches its peak value. As degradation occurs over time, the product begins its descent. However, circular interventions can interrupt this decline by reintroducing the product into the cycle through reuse, repair, refurbishment, or upcycling.

 

Figure 1: Value Hill model adapted by DIPSTOR to emphasise the role and placement of potential circular community builders (RM - raw material providers; P1, P2 – producers; DI – distributors, C – consumers/users). © DIPSTOR®

Figure 1: Value Hill model adapted by DIPSTOR to emphasise the role and placement of potential circular community builders (RM - raw material providers; P1, P2 – producers; DI – distributors, C – consumers/users). © DIPSTOR®

We describe upcycling as a climbing spiral on this lifecycle path. It’s not just about giving something a second life, it is about restoring or even elevating its value. When something is upcycled, we go beyond basic repairs. We might refurbish it in a way that brings it close to new or transform its components into something even better. 

But to make this happen, we need more than good intentions, we need the right actors taken the right roles along the way.

 

Who is involved? Circular economy is a kind of team exercise.

We reimagine the Value hill by adding a crucial layer: the stakeholders (as shown in Figure 1), that represent the foundation of a circular community. Circular community is in detail introduced and discussed in our next blogs. However, here is a simplified breakdown, corresponding with key stakeholders introduced in Figure 1 and emphasising some more, that come into play in further blogs about circular economy and circular community:

  • Raw Material Source (RM) – where it all starts
  • Producers & Assemblers (P1 & P2) – who make and assemble parts
  • Distributors (DI) – who get it to the customer
  • Consumers (C) – who use the product
  • Service providers (S) – who maintain, repair, and support (re)use
  • Producers and Developers (P & D) – who produce and who develop for production: essential for upcycling and innovation

Development can play the key role once the product’s value starts to drop, as it may not be just about fixing it, but rather about activating this entire circular community to rethink, redesign, and reclaim that lost value.

 

Three circular strategies: Retain, Recapture, Develop 

Rather than directing materials straight to waste, circular strategies introduce loops that preserve or enhance value. In this context, we classify circular strategies into three categories: retaining value strategies, recapturing value strategies, including upcycling, and downcycling, and development strategies, each involving specific roles for key stakeholders.

Retaining value strategies - such as reuse, repair (maintenance), and minor refurbishment - aim to extend product lifespan through continued service and user engagement. These actions delay degradation and help preserve both material integrity and economic value. – It is all about keeping products functional and desirable for as long as possible. Service providers are key players here.

Upcycling strategies become relevant when degradation surpasses the thresholds manageable by simple repairs. In these cases, comprehensive refurbishment, component extraction for remanufacturing, or creative repurposing allow for the recovery or even enhancement of value. These strategies often require deeper collaboration between production (P) and development (D) actors, as they rely on design innovation and advanced technical skills. When wear and tear go beyond a quick fix, upcycling steps in. Here, deeper transformations take place. Items may be disassembled, reimagined, and brought back to life as something completely new, preferably even better. - This stage heavily involves production and development teams, because innovation is needed to rethink what is possible with used materials, and how to store them in new products for next cyclical loops.

Downcycling strategies are applied when material degradation or market limitations prevent higher-value recovery. Recycling processes may still extract material, though typically of lower quality, representing a net loss in value. These strategies, while preferable to landfill disposal, are considered less desirable in terms of environmental impact and material efficiency. - Let’s face it, not everything can be saved. Sometimes materials are so degraded that recycling is the only option. But be warned: downcycling usually means losing some material quality and value along the way. It is better than a landfill, but it is the least ideal of the three paths.

 

Figure 2: R strategies and their grouping with linkage to circular community stakeholders as the key R-activity holders. © DIPSTOR®

Figure 2: R strategies and their grouping with linkage to circular community stakeholders as the key R-activity holders. © DIPSTOR®

DIPSTOR’s framework emphasizes the importance of Development-oriented strategies in creating the conditions necessary for circular practices, particularly upcycling. By advancing principles such as reduce, rethink, and refuse, development-related stakeholders are positioned as key enablers of sustainable circular communities.

Thus, our Evolutionary Design model, supported by this ongoing research, calls for systemic change: engaging all actors, from raw material providers to end users, to contribute to continuous value regeneration. As circular economy models gain traction, upcycling stands out not only as a method of waste reduction but as a strategic avenue for innovation, community engagement, and sustainable resource use.