UNCERTAINTY MANAGEMENT IN CIRCULAR BUSINESS MODEL INNOVATION – THE CASE OF CIRCULAR PLASTICS

Abstract

AbstractThe transition towards circular economy means a radical systemic shift that requires re-design and innovation of business models. However, this radical systemic shift also creates high levels of uncertainty, which pose challenges to the circular business model innovation (CBMI) process. Using the transition towards circular plastics as a case context, this study aims to conceptualize different forms of uncertainty affecting CBMI, and to link them with approaches for managing these uncertainties. Based on interviews with incumbent manufacturing firms that have transitioned to circular plastics, or are in the process of doing so, we identified three domains of uncertainty: goal uncertainty, development uncertainty, and outcome uncertainty. We discuss the nature and sources of these uncertainties, and present different approaches chosen by manufacturers to manage these uncertainties in the context of their business. Our findings highlight the complex nature of uncertainty, and the importance of a nuanced consideration of uncertainty as a factor in the CBMI process. Moreover, our mapping of core uncertainties for CBMI and approaches to manage these uncertainties can guide practitioners in the innovation process.