Characterizing Circular and Open Business Models in a profit-driven environment through Business Model Patterns

Abstract

In recent years, multiple crises have shown the fragility of global supply chains. In particular, climate change sheds light on the never-ending waste of resources caused by the linear economic model. In response, circular economy emerges as a promising alternative. Companies must rethink and innovate their business models, product life cycles, and underlying mindsets for a systemic transition. Cross-sectoral collaboration in networks is necessary to redesign, reuse, recycle, and remanufacture products and close the loop of material flows. First, projects and research on the concepts of open source hardware, open innovation, and open design show that openness can be a game-changer for the circular economy and circular business models. Although there has been growing interest, there is still a lack of comprehensive research examining possible synergies of openness and circularity, as well as identifying patterns for integrating these concepts into business models. This paper explores possible ways, prerequisites, and obstacles of open source concepts enabling circular value creation in industry. We combine explorative data from a literature review and more than 10 interviews with open source and circular economy experts. Furthermore, a total of 38 case studies of circular or open or open & circular business models were identified and selected for analysis. The empirical results were triangulated with existing business model patterns from the literature. The study presents a framework to describe open and circular business models and four prototypical patterns. In an exploratory approach, we identify necessary lines of future research in order to facilitate open source movements toward a circular economy. The paper provides insights for academics and practitioners from production and supply chain management. It combines interdisciplinary perspectives to unlock the potential of open source concepts and collaboration for enabling a circular economy.