Financing and Business Models for Scaling Up Sustainable Business Networks—Building a Circular Economy

Abstract

Transition towards a circular economy (CE) requires collaboration amongst stakeholders. Sustainable Business Networks bring together different organisations to learn and disseminate CE innovations. However, without proper financing models, networks struggle to survive and attain financial independence. In this paper, we explore the different models which are used by African networks to finance their activities. The methodological approach involved nine case studies from three African countries (Zimbabwe, Kenya and South Africa) and selected regional networks. Semi-structured interviews were undertaken with key informants of the networks, and a questionnaire was sent to each network. Content analysis of networks was undertaken, and documents were assessed for each network in order to evaluate network activities under different funding regimes. The main funding models that were observed include membership subscriptions, donor funding, conference fees for network events, consultancy services, crowdfunding and selling knowledge products. The challenge of low payments of subscriptions is common in all countries, and networks devised innovative ways of generating funds such as consultancy fees for services rendered by the network. We conclude that there is still a high level of involvement of donor agencies in financing Sustainable Business Networks. However, this donor-funded approach is failing to steer networks to sustainability beyond projects and programmes which involve networking. Based on the existing literature and the information collected during the interviews, it was possible to recommend a hybrid financing model that is based in two crucial elements, (i) on country specific actors and (ii) on ownership of the network at national level.