How start-ups in emerging economies embrace circular business models and contribute towards a circular economy

Abstract

PurposeThe purpose of this paper is to investigate the practices that start-ups in emerging economies can implement to design circular economy business models and how they can create and capture value from a circular economy business model.Design/methodology/approachThe paper adopts a qualitative case method approach with semi-structured interviews with start-up founder promoters, its employees, its beneficiaries and its customers, conducted in two local Indian start-ups engaged in the manufacture of products and providing services that promote adoption of circular economy principles.FindingsAnalysis of the two business models reveals common patterns in building value proposition. The findings suggest that start-up ventures adopt an iterative approach to produce reusable and interlinked products and co-create with customers, vendors and local communities. They adopt mechanisms that can create, deliver and capture value while maintaining economic viability, and thus contribute towards micro- and macro-level benefits.Research limitations/implicationsThis study maximizes the depth of the phenomenon under investigation by leveraging case study methodology. Future research opportunities could be found in quantitative studies to increase the generalizability of the findings of this paper.Practical implicationsThe paper presents a theoretical model linking the circular business model design and deployment mechanisms that can be used by start-up entrepreneurs desirous of embracing circular economy principles and thus contribute towards environmental, economic and developmental goals in emerging economies.Social implicationsTo accelerate the transition of adoption of circularity principles in emerging markets, start-up ventures could adopt circular business models that contribute towards achieving positive behavioural change. This can be achieved by integrating with different stakeholders in the value network such that they play a vital role in the process of value creation and delivery and benefit from the value captured.Originality/valueAn interdisciplinary approach that integrates the research streams of circular economy, and business model design has been pursued to identify the design and deployment mechanisms adopted in the circular business models of start-ups in real-world emerging economies’ context.