A Framework for Sustainable Circular Business Model Innovation

The circular economy is used as a concept to advance and push the green and sustainability transition process in businesses to a more circular, green, resource effective economy. However, it has turned out to be much more complex to innovate, develop, implement, operate and not least measure Circular and Sustainable business models for businesses – especially for SME’s and Startups – although the approach – by many – is emphasized as “easy” strategies and implementation. Achieving Circularity and Sustainability (environmentally, economically and socially parameters) – at the same time – related to business models has not yet been clearly defined, shown, proven and measured. Achieving environmental, economic and social goals – equal to sustainability – at the same time – the ”triple bottom line” approach – in a circular perspective is a great dilemma to many businesses because the parameters often conflict each other. Advanced sensor technologies, 5G and 6g technologies gives great hope to be able to make it more visual and transparent to what businesses are really doing and strategically want to do. Advanced technology could help to visualize the process and the dilemma – in close to real time. Advanced sensor, 5G, 6G technologies imbedded in Business Model’s (BM) and Circular Sustainable Multi Business Model Innovation and Development processes gives hopes for a new leadership and management era together with better measurement tools, practice, and approaches. It also gives hope to a higher speed on circular and sustainable transition – visualizing and thereby hopefully preventing greenwashing. The EU project Greenbizz II A and B’s vision is to speed up the Circular and Sustainable Multi Business Model Innovation and Development (CSMBMID) process in SME’s and Startups together with their business value network. The aim is to achieve and implement Scope 3 – but under the goal to also create at the same time effectiveness, efficiency and sociality in CSMBMID. By reengineering AS IS BM’s – and designing Circular and Sustainable Business Models (CSBM) – the vision of Greenbizz II A and B are however very complex by nature. It requires a manifold of activities, different network constellations and not least further research, innovation and development of sensors, 5G and 6G technologies, learning and traning and a CSMBMID Brain. Greenbizz II A and B build on top of EU Greenbizz 1 project, as Green, Economic and Social parameters are seeked measured and achieved together with circularity at the same time in a new “Circular Sustainable Triple Bottom Line” measurement framework. A new advanced monitoring smartboard using advanced sensors and wireless technologies prototyped in SMEs/Startups – and their business value networks – will be prototyped and tried to be implemented from 2024 – 2026 in 96 SME and Startup businesses. The paper discuss through 3 case examples in different Business Model ecosystems contexts, challenges to do CSMBMID and how advance sensor, 5G and 6G technologies is expected to help and support circular sustainable BM transition in businesses. It points to how CSBM’s can be innovated, developed and implemented supported by advance sensor, artificial intelligence, deep learning, persuasive technologies, Multi Business Model Innovation pattern analysis and libraries of BM archetypes.

Sustainable business model innovation is an all-round innovation of value proposition, value creation, value acquisition and value network guided by sustainable development, fully integrates the contribution of enterprises to sustainable development, the requirements of stakeholders and social responsibility, and finally creates comprehensive value and shared value covering economy, society and environment. From the perspectives of triple bottom line, stakeholders, enterprise strategy, organizational management and resource integration, this paper reveals the connotation deepening and extension of sustainable business model to traditional business model, and comprehensively combs the concept understanding, design scenarios, driving factors and implementation process of sustainable business model innovation. Among them, the social enterprise and benefit corporation organization scene focusing on organizational system, the bottom of pyramid （BoP） focusing on users, and the circular economy scenario focusing on products are the main scenarios for sustainable business model design. Sustainable entrepreneurship from the perspective of entrepreneurs, creation of shared value from the perspective of strategic competition tools, legitimacy construction and profit from the perspective of neo-institutionalism, and social pressure from the perspective of stakeholders are the important driving factors of sustainable business model innovation, while sustainable entrepreneurship, responsible digital technology innovation, and organizational paradigm innovation are the main ways to achieve sustainable business model innovation. We suggest that future research should focus on clarifying the basic theoretical framework and internal drivers of sustainable business model innovation, analyzing the mechanism of sustainable business model innovation on enterprise performance at different levels, and deepening the research on sustainable business model innovation in the new digital era.

As an approach to sustainable development, circular business models are increasingly being developed. However, many circular business models focus on environmental or technological contributions to sustainability rather than considering all dimensions of sustainability simultaneously. Based on existing sustainable business model archetypes, a hierarchical business model typology is developed that allows a stepwise exploration of sustainable business model innovation opportunities incorporating an environmental, social and economic dimension. An analysis of business model components generates a closer look on the six newly defined Sustainable Circular Business Models. Finally, a conceptual application for organic waste valorization technologies, supported by examples from literature, allows a practical view on the implementation of the business models in the bio-economy. The typology offers a guide toward sustainable business model design or innovation opportunities centered around technologies creating value from waste.

Anatomy of sustainable business model innovation

Contemporary research on sustainable business practices and business model innovation increasingly emphasises the need to identify new, inclusive pathways for circular enterprise development and sustainable business practices. There is growing interest in alternative knowledge systems for their potential to support innovative and inclusive business model development. Although widely acknowledged for their cultural significance, indigenous clothing traditions have not been sufficiently examined for their potential to contribute to contemporary business model innovation, particularly through adaptive reuse strategies. Most existing literature addresses cultural or aesthetic aspects, with limited empirical research investigating how traditional clothing systems can be transformed into viable, scalable, and sustainable enterprises, supported by both qualitative and quantitative evidence. A mixed-method research design was employed, integrating qualitative approaches with quantitative and descriptive analysis. Ethnographic fieldwork was conducted in Ziro, Arunachal Pradesh, the Apatanis’ homeland, where most community members have ancestral roots. Additionally, Itanagar, the capital city, was selected for its significant Apatani population, enabling comparative insights from both traditional and urban contexts. Consumer perspectives are incorporated to assess market relevance and adoption potential, particularly among younger demographics. A structured survey was administered to the target age group (18–55 years) using snowball sampling. The survey collected quantitative data on usage frequency, perceived barriers, sustainability awareness, and openness to contemporary adaptations. Data were analysed using thematic analysis supported by basic statistical techniques. This study demonstrates how indigenous clothing practices of the Apatani tribe of Arunachal Pradesh can contribute to the evolution of sustainable and circular business models within the fashion and creative industries and facilitate sustainable business model innovation through adaptive reuse, circular design strategies, and community-based value creation. The study conceptualises these practices as embedded knowledge systems that demonstrate resource efficiency, adaptive reuse of materials, and community-based production logic. The research presents an empirically grounded framework connecting cultural heritage to scalable and resource-efficient enterprise models. The resulting business model provides practical guidance for designers, entrepreneurs, and policymakers seeking to create heritage-driven circular enterprises while maintaining cultural integrity. These findings apply to other indigenous and craft-based contexts, supporting sustainable growth, innovation, and broader societal impact within the creative economy.

Sustainable business modeling: The need for innovative design thinking

PurposeThis study evaluates the important role of humane entrepreneurship (HE) on sustainable business advantage (SBA) and sustainable business performance (SBP) by exploring the mediating role of sustainable business model innovation (SBMI) under the influence of knowledge management (KM) in small and medium-sized enterprises (SMEs). Encouraging businesses to implement a combination of KM and HE facilitates the implementation of SBMI that brings value to businesses, communities and the environment in emerging economies.Design/methodology/approachThis study uses an empirical quantitative research method using primary information based on data collected by questionnaires. The study sample resulted in 424 valid responses (66.77% response rate). The target audience of the study is middle and senior managers in SMEs. This study aims to perform structural modeling analysis with the maximum likelihood estimates method to examine structural relationships.FindingsThis study found a positive relationship between KM and HE to SBMI. At the same time, SBMI plays an important role for businesses to achieve SBA and SBP. Similarly, a positive relationship was also found between HE to SBA and SBP. And SBA strongly promotes SMEs to achieve SBP. In addition, the mediating role of SBMI and SBA is clarified to have a positive impact between HE–SBP and SBMI–SBP. HE plays an important role in motivating businesses to innovate sustainable business models, making it easier to gain sustainable competitive advantages, thereby bringing sustainable business results.Practical implicationsThis research helps SMEs realize the importance of KM and HE in SBMI. At that time, SMEs take advantage of internal and external information sources and innovate their business models based on HE mechanisms. Applying HE mechanisms will allow businesses to innovate their business models by combining concerns between stakeholders and the social environment for sustainable development. Therefore, businesses will achieve their SBA toward SBP.Originality/valueThe present literature shows that there are few empirical studies on the mechanism mediating SBMI in the relationship between HE and SBP; and SBA in the link between SBMI and SBP. In addition, the impact of KM and HE on SBMI is also very important in the current context. The study's findings could have huge implications for entrepreneurs and senior managers in SMEs in emerging economies. Help them realize the importance of KM and HE for SBMI, thereby building strategic perspectives that help businesses achieve sustainable competitive advantages and increase SBP for businesses.

In times of increasing concerns and extensive political debates about social and environmental problems, incumbent firms are obliged to reduce their negative environmental impact by implementing sustainable business model innovation. Yet, realizing more sustainable business model variants entails several complexities and associated challenges that need to be overcome. To support this task, this article takes an entrepreneurship perspective on sustainable business model innovation and combines literature of business models and entrepreneurial lean thinking (ELT). In doing so, it derives a workshop design grounded in contemporary theory with state-of-the-art tools and methods. The workshop is framed as a stage-gate process facilitating the notions of ELT with iterative cycles of ‘create, test, and improve’ and spans the phases of opportunity identification, opportunity evaluation, opportunity development through sustainable business model design, and decision of opportunity exploitation. The article shows that ELT is an appropriate yet underutilized approach for sustainable business modeling. Further, it discusses how the workshop supports opportunities and mitigate pitfalls of ELT for sustainable business modeling. As such, the findings have theoretical implications for the intersection of sustainability and lean approaches in innovation research as well as implications for practitioners by providing a comprehensive framework to support sustainable business model innovation.

The need to develop sustainable business models, which have a positive effect on environment and society, has received increasing attention in research and practice in the last years. Describing the sustainability of these business models, however, often takes place without robust assessments and without consideration for the wider system within which they are embedded. Early in the innovation process, in particular, a lack of quantitative data, time, and competencies presents an issue. At the same time, Systems Thinking has long been described as necessary for innovating business models for sustainability, but it has not been made clear how exactly Systems Thinking can be used early in the innovation process to assess the sustainability of a business model innovation. This article develops guidelines for embedding Systems Thinking principles into tools for sustainability assessment for use in the early stages of sustainable business model (SBM) innovation. It does so by exemplifying Systems Thinking principles in the context of SBM innovation and analysing their integration in three selected tools for early-stage sustainability assessment. The article shows how, by embedding Systems Thinking into tools for the SBM innovation process, unintended consequences and negative trade-offs can be reduced and the sustainability of the innovation better understood. Eight design guidelines are proposed for effectively using Systems Thinking in tools for early-stage sustainability assessment of SBMs: (1) Define scope of application, (2) Design for collaboration, (3) Integrate the principles “Interconnections”, (4) “Causal relations & feedback loops”, and (5) “System change & adaptation”, (6) Consider sustainability dimensions, (7) Ensure flexibility of integration, and (8) Ensure compatibility with other assessment tools.

Objective: This study reviews the existing literature on sustainable business models for food waste management within the circular economy context. The findings aim to map the research landscape, highlight significant contributions, and suggest future research directions to inspire further studies in this domain. Theoretical Framework: Business model innovation is crucial for companies to remain competitive and sustainable, with a focus on integrating environmental considerations. The circular economy, emphasizing renewable and closed-loop product life cycles, offers a sustainable alternative to traditional economic models. In this topic, the main concepts and theories that underpin the research are presented. Method: Using bibliometric analysis and mapping, this study examines the intensity, influence, and key topics of research articles, journals, and authors from 2016 to January 2023 via Scopus. Keywords were selected based on prior studies, and a Prisma diagram was adapted. A descriptive approach is used for frequency analysis, while co-occurrence clustering reveals literature evolution, topic interlinkages, and research focus areas to guide future studies. Results and Discussion: This study highlights the critical role of business models in addressing food waste within the circular economy and sustainable production and consumption contexts. By mapping recent literature and research trends from 2016-2023, the study identifies essential concepts such as sustainable and circular business models, circular food systems, and food waste recovery methods, digitalization's role, alongside themes like zero waste, food sustainability, smart cities, urban recycling, and upcycling. Research Implications: To understand the research trends, orientations, concepts, and interrelations between these concepts, this study presented a literature review on food waste and business models for 2016-2023. The paper discusses some essential concepts surpassing all industries and waste types in the sustainability context: circular economy, sustainable business models, and circular business models. The study calls for further research and well-structured roadmaps to enhance the global impact of food waste business models and facilitate a shift toward circular economy frameworks. Originality/Value: This study contributes to the literature by revealing in the integration of food waste management with retail and supply chain dynamics, underscoring the need for collaborative solutions and sustainable packaging innovations. This analysis contribute to reflecting the accumulated knowledge landscape to the research and practice community and elaborating on the research gaps and possible research venues to guide future practices.

Despite the significant growth in research on the triad of Circular Economy (CE), Innovation, and Sustainable Business Models (SBMs), theoretical fragmentation persists due to the lack of holistic conceptual integration, resulting in a heterogeneous framework that is difficult to apply in practice. Given this scenario, this study aimed to identify, categorize, and systematize the state of the art of Circular Economy, Innovation, and Sustainable Business Models, aiming to increase conceptual clarity and strengthen the application of these concepts in theory and practice. At the same time, we sought to map emerging trends, opportunities, challenges, and future directions capable of supporting the work of academics, practitioners, and public policymakers. To this end, we conducted a systematic literature review based on the Scientific Procedures and Rationales for Systematic Literature Reviews (SPAR-4-SLR) and the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) protocols, resulting in the final selection of 60 publications extracted from the Scopus database. The results suggest that research in this field is emerging, rapidly expanding, and with increasing diversity of applications across different contexts and sectors, although still concentrated in developed countries and at an early stage of scientific maturity, marked by the predominance of systematic reviews and case studies. A thematic evolution was also observed, moving from a focus on climate change and energy efficiency to encompass design principles, cross-sector collaboration, and sectors such as the bioeconomy and recycling, in addition to the more recent incorporation of digital technologies and consumer-focused strategies. Based on the analysis, the concept of Circular and Sustainable Business Model Innovation (CSIBI) is proposed, integrating the triad and systematizing its conceptual basis. The future research agenda covers strategies and metrics for sustainable circularity, as well as the role of digital technologies, governance, and human factors, providing guidance to consolidate the field. This framework contributes to the advancement of new research, strengthens the adoption of business practices in the transition to more circular and sustainable business models, and provides input for public policymakers, integrating the principles of the circular economy, innovation, and sustainable business models.

Sustainable business model experimentation by understanding ecologies of business models

SMEs, including cultural and creative firms, are encountering increasingly difficult obstacles in today’s competitive landscape. In particular, during the COVID-19 pandemic, these SMEs had to confront significant challenges that endangered their survival, requiring a shift in their business model. Many successful firms responded to this crisis by adopting business model innovation (BMI) as a strategic solution. The pandemic also emphasised the importance of sustainable practices and the necessity to enhance readiness for and responsiveness to future challenges. This study proposes examining Sustainable Business Model Innovation in the light of the Theory of Planned Behavior. While some studies have explored BMI through the TPB framework, we expand the interpretative schema by introducing an additional predictor: the influence of open innovation ecosystem partnerships. From an open innovation perspective, the new construct proposes how peer professional organisations and technological clusters play a significant role in managers’ intentions to implement SBM. A purposive sample of 122 Spanish cultural and creative firm managers and business owners was surveyed and analysed using PLS-SEM. The data collected supports the model and supports the prominent role of open innovation environments as a mediation effect of the intention to implement a sustainable and innovative business model. The study adds new insights into the theoretical framework to better understand the implementation of sustainable business models’ innovation actions, with specific support for the role of open innovation ecosystems such as professional organisations and technological clusters. Practitioners and open innovation ecosystem promoters can gain new clues for initiatives to promote the diffusion of innovations among creative and cultural SMEs.

Addressing the design-implementation gap of sustainable business models by prototyping: A tool for planning and executing small-scale pilots

This study explores the cognitive impact of sustainable business model patterns on initiating design for sustainability, comparing them to traditional patterns. Utilizing a quasi-experimental design with four teams of Master's students in Innovation Management, we assessed how the type of business model pattern cards influences cognitive processes and idea generation during ideation. Our findings demonstrate that sustainable business model patterns significantly enhance cognitive stimulation, promoting a broader perspective on sustainability issues. They excel in integrating all three dimensions—economic, ecological, and social—of sustainable business model innovation within the context of idea generation. This research bridges interpretations of business models as (1) cognitive schemas and (2) formal representations, highlighting the pivotal role of specific visual tools in facilitating sustainable business model innovation. This includes challenging cognitive barriers and fostering a comprehensive approach to sustainable design.