Disruptive innovation and circularity in start‐ups: A path to sustainable development

Abstract

AbstractStart‐ups are an increasingly important phenomenon in the Brazilian business ecosystem. Many such companies have been created over the past few years, illustrating the interest in and growth of such entrepreneurship. Emerging companies are more likely to be founded on sustainable business models. In many cases, such models incorporate the principles of the circular economy. Thus, this study reviewed the use of disruptive innovation and the circularity of resources in the business models of start‐ups. The study consisted of 50 semistructured interviews with start‐up owners and managers. We accessed the database of the Brazilian Start‐ups Association to map the organisations to be surveyed. Our results show that start‐ups are innovating in terms of the circularity of resources through a range of partially implemented initiatives. These initiatives allow start‐ups to manage their data and microdata, create artefact integration systems, generate connectivity, accelerate digitisation, stimulate partnerships and cooperation between parties in the supply chain, generate new market opportunities and develop efficient transition systems for the circularity of resources. Thus, there is ample evidence that disruptive innovation supports the circular economy in Brazilian start‐ups. This study makes two main contributions to the literature. First, it strengthens the existing understanding of the use of the circular economy in start‐ups, supported by disruptive innovation. Second, it identifies the levels of adoption of the circular economy in different market segments. Based on these findings, it identifies several opportunities to encourage further advances in this area.