A Transitions Perspective on Circular Business Models: Towards a Conceptual Framework

Abstract

The concepts ‘circular business models’ and ‘transitions towards a circular economy’ became modern-day buzzwords. Yet, an understanding of the interplay between these two concepts remains rather uncertain. This paper proposes a conceptual framework that illustrates the innovation processes of circular business models emerging within the structural context of transitions towards a circular economy. The paper follows a three-step methodology. First, a priori definitions of the core concepts are given. Second, a deductive conceptualization is proposed by adopting theoretical insights from transition studies, specifically from perspectives of technological innovation systems and strategic niche management. Third, a systematic literature review is employed. The review scrutinizes and synthesizes the selected literature to illustrate if and how the proposed conceptualization was reflected within the previously published research. Finally, based on the integration of deductive reasoning and systematic literature review, a conceptual framework is proposed. This framework proposes future lines of research to illustrate its plausibility. Moreover, it offers prescriptive help to managers, entrepreneurs, and policymakers, and other social actors enabling them to make informed decisions about and take innovative actions for circular business models.