Circular Business Model Innovation Research Articles

Circular business model innovation and cognitive framing: Addressing the “missing micro”

Circular business model innovation and cognitive framing: Addressing the “missing micro”

Cradle-to-cradle business model tool: Innovating circular business models for startups

Born circular startups play a pivotal role in implementing high-level circularity to fight resource depletion and address climate change. In developing circular business model innovation, circular startups face the challenge of lacking legitimacy, which can be approached by certifications provided by concepts like Cradle-to-Cradle. As there is currently no supporting tool to develop such business models, this paper employs a design science research approach and proposes a Cradle-to-Cradle (C2C) Business Model Tool. The tool is developed based on a literature review, feedback from 42 users in six demonstration workshops and is finally tested with eight startups. It succeeds in aiding born circular startups in navigating the venturing process with a focus on high-level circularity. In this paper, C2C principles developed for the product level are theoretically linked to the business model level. The tool addresses elements such as partnerships, communication, and action-taking, thereby contributing to the literature on circular business model innovation and serving as a practical resource for born circular startups.

Biofuel supply chain planning and circular business model innovation at wastewater treatment plants: The case of biomethane production

Advanced biofuels, such as biomethane, could contribute to environmental sustainability in increasingly interrelated sectors, such as energy and waste management. Accordingly, innovative biomethane production technologies are argued to be the enablers of circular and waste-to-energy concepts, for example, at wastewater treatment plants (WWTPs). Nevertheless, their integration into biofuel supply chain (BSC) research is overlooked from a circular business model innovation (BMI) perspective. This study aims to address this research gap by focusing on an innovative biomethane production approach (power-to-gas, P2G) and related circular business model innovation opportunities in the context of WWTPs. We carried out lab-scale research and a case study at a mid-sized European WWTP to establish an empirical basis for large-scale techno-economic calculations. Despite the explored technological opportunity to increase advanced biofuel supply and decrease carbon dioxide emissions at WWTPs, current market risk levels challenge the economic prospects of the system concept. These empirical results demonstrate the necessity of policy interventions in different combinations (e.g., investment support, favourable taxation, feed-in tariffs). This study is one of the first to combine technological and business modelling aspects to support BSC planning, and supplement optimization-focused BSC research with explorative techno-economic analyses based on empirical data.

Towards a Circular Solar Power Sector: Experience with a Support Framework for Business Model Innovation

AbstractThe rapid expansion of the global solar photovoltaic (PV) market as part of the transition to a low-carbon energy future will increase both demand for raw materials used in PV product manufacturing as well as future PV panel waste volumes. There is an urgent need for solar industry businesses to adopt circular business models, and to support this process through targeted tools and methods that can facilitate the innovation process of such models. This paper employs an action-oriented case study methodology, drawing on insights garnered from five demonstrator cases that have applied and validated a Circular Business Model Innovation (CBMI) framework within the PV sector. Results show how this framework was applied in practice during the ideation, design, experimentation, and scaling phases of the innovation process. Specifically, results show how an experimental and iterative approach was found critical to assess viability, desirability, and feasibility of circular business strategies. The study’s empirical testing of tools with the context of a Circular Economy complements earlier theoretical conceptualizations of business model innovation processes. It illustrates how using multiple tools can provide firms with complementary insights in each stage of ideation, design, testing, and scaling of business models. It is recommended that policy makers and business leaders endorse such co-creative and experimental approaches to foster learning and business model innovation, thereby catalysing the transformation of an entire renewable energy industry sector towards Circular Economy.

Implementing a circular business model for reusable packaging: Multidisciplinary learnings from reusable pizza packaging

This article explores practical challenges in developing and implementing circular business models in the context of reusable takeaway food packaging from a transdisciplinary perspective. It touches upon the desirability, feasibility, viability, and sustainability dimensions of a reusable pizza packaging circular business model. First, a literature review is conducted to highlight current knowledge and gaps around circular business models for reusable packaging and the key factors addressing the desirability, feasibility, viability, and sustainability. Second, a case study approach is taken for an in-depth exploration of these factors and their effect on the successful implementation of a reusable packaging business model. A real-life pilot is structured and implemented; questionnaire, workshops and semi-structured interviews with consumers and key stakeholders of the novel business model as well as technical laboratory tests of used packaging are used as key data sources in the case study. This study contributes to research and practice with a novel framework for circular business model innovation in the context of reusable packaging highlighting the need to iteratively address packaging as well as system conditions affecting the desirability, feasibility, sustainability, and viability of such ecosystem-based business models. Future research should inherently take a systemic perspective to address interconnections between these four dimensions and explore in which steps and order experimentations should be developed to balance trade-offs between feasibility and desirability while ensuring sustainability and viability of the business model.

Green Innovation Ecosystem Establishment through Strategizing the Business Model in Public Sector

Objective: This study aims at investigating the relationship between internal control systems (ICS) and accounting data analytics (ADA). This study also examines the ways in which ICS and ADA influence green innovation ecosystem (GIE). Furthermore, it endeavors to explore the digital circular business model innovation (DCBMI) mediation mechanism in the connection between ICS, ADA, and GIE. Theoretical Framework: Drawing on the practice-based view theory, this study focuses on several constructs and their interconnections namely ICS, ADA, GIE, and DCBMI. Method: The hypothetico-deductive approach was utilized in this study. The study utilized structural equation modeling to examine the proposed model, which was based on statistical data obtained from a cross-sectional survey of 523 accountants employed in public sector organizations (PSOs). Results and Discussion: The result substantiated the markedly positive interconnection between ICS and ADA. Also, GIE was verified to be affected by ICS and ADA. Simultaneously, these interconnections were partially mediated by DCBMI. Research Implications: These observations served as a guide for the leaders of PSOs to identify and capitalize on opportunities to become effective in the digital transformation journey, as well as to develop robust strategies to effectively direct their green innovation process. Originality/Value: It also enlarges the body literature on GIE through producing empirical evidences concerning the influences of ICS and ADA on GIE within PSOs in developing country. Strikingly, the originality of this investigation lied in studying the mediating effect of DCBMI on the interlinks between ICS and GIE as well as ADA and GIE.

Circular Business Model Frameworks: A Review

The circular business model (CBM) concepts are vast, interconnected, and emerging. Research to date has been somewhat fragmented, and there would be value in focusing on the systemic identification of the connectivity of the topics around CBM. Furthermore, the business model innovation (BMI) process and business model implementation were identified as two separate spectra of research that should be seen collectively and added to the literature. This article reviewed 256 articles (solely focusing on “CBM frameworks”) published between 2007 and mid-2022, collected from the Scopus database, and analyzed using the content analysis method to identify the research gap/s. Results showed that under circular business model innovation (CBMI), the innovation process and their associated process modeling, archetypes, tools, experimentation, digitalization, and innovation via the inclusion of circular economy (CE) principles and sustainability in BMI were highlighted. From the CBM adoption/implementation perspectives, business ecosystem, technological innovation, product lifecycle management, CBM value dimensions (e.g., value proposition, value creation, and delivery), organizational capabilities, and dynamics were investigated. Topics around sustainability and circularity principles, strategies and organizational performance, CBM value streams, digitalization, and product-service systems were topical issues of the circular supply chain (CSC). A conceptual framework for gaining circular competencies integrating all elemental issues throughout the CBM development process (e.g., innovation, adoption within CSC) has been progressed. Based on the review, this article defined a circular business model as a business model that fundamentally applies one or more of the principles of CE at various product/service/material lifecycle stages, for which sustainability-focused technological innovation, collaboration among business ecosystem partners, and enhanced dynamic capabilities of any organization are prerequisites. Several research gaps were identified with potential avenues for future research directions, which will be helpful for policymakers, business organizations, and researchers.

Insight into how digital forensic accounting and metaverse circular business model innovation contribute to accelerated internationalization: evidence from Vietnam-based SMEs

Insight into how digital forensic accounting and metaverse circular business model innovation contribute to accelerated internationalization: evidence from Vietnam-based SMEs

Neutrosophic bipolar fuzzy decision-based approach for developing sustainable circular business model innovation tools

The circular economy (CE) has been identified as a possible catalyst for sustainable development by business, academics, and policymakers. To aid company developers in creating and improving business models that incorporate circularity, a variety of tools for circular business model innovation (CBMI) have been proposed. Nevertheless, the existing tools failed to consider sustainability or CE in their advancements. Currently, there is no research that has presented a complete dataset including all potential tools that may be created based on the CE’ sustainability performance attributes. Moreover, there has been a dearth of research conducted to assess and model these tools in order to determine the most efficient ones, which has resulted in a research gap. This paper constructs a decision matrix of CBMI tools by intersecting 100 CBMI tools with 10 CE’ sustainability performance attributes. The modeling of CBMI tools falls under Multiple Attribute Decision Making (MADM) due to the presence of many attributes, varying importance levels of these attributes, and the and variation in data. Thus, the fuzzy weighted with zero inconsistency (FWZIC) method is reformulated under neutrosophic bipolar fuzzy sets (NBFS) to determine the weight of CE's sustainability performance attributes. The matrix that has been constructed and the resulting weight values are fed into the CODAS method in order to model CBMI tools and identify the most sustainable tool. The results indicate that the NBFS-FWZIC method gave a weight value of 0.1031 to A7, which is the greatest weight value. On the other hand, A3 had the lowest weight value of 0.0944. The CODAS method modeled the 100 CBMI tools, with Tool39 being identified as the most sustainable tool and Tool26 as the least sustainable tool. The robustness and durability of the proposed method are evaluated using a sensitivity analysis, Spearman's rank correlation test, and comparison analysis.

Circular Business Model Innovation – Literature Review

A business model is a primary entity that cannot be separated from a company. It starts from a linear one that only considers raw materials to finished goods to a circular business model that considers waste treatment and extends the product life cycle to the maximum. This shift was triggered by the innovation process rooted in environmental problems (climate change, global warming, and others) that made companies slowly opt for a circular economy because of limited resources. The business model is a strategic tool to implement the circular economy in companies and increase the company’s value. This paper aims to identify the relationship between the circular business model and the circular economy in theory and practice. The literature review study was taken from the two largest journal sources, namely Scopus and World of Science (WoS), and then processed with VosViewer to analyze the relationship of the topic between existing papers. The results show a positive relationship between the circular business model and the circular economy and provide literature recommendations to readers regarding the theory and implementation of the circular business model.

Let's go thrift shopping: Exploring circular business model innovation in fashion retail

The circular economy offers promising opportunities for the fashion industry to decouple revenue streams from resource use. To take advantage of these opportunities, this research study investigates circular business model innovation and advances knowledge on what drives such innovation and how this process can be accelerated. In a collaborative setting, we developed and validated a circular business model that supports clothing reuse. Inspired by design science and supported by business model theory, the research reveals that consumer centricity drives circular business model innovation, and logistics services act as a catalyst accelerating this process. These findings provide foresight to support retail transformation toward the circular economy. Thirteen business model-oriented propositions are put forward to elaborate theory.

Artificial intelligence enabling circular business model innovation in digital servitization: Conceptualizing dynamic capabilities, AI capacities, business models and effects

This study explores the potential of AI to enable circular business model innovation (CBMI) for industrial manufacturers and the corresponding AI capacities and dynamic capabilities required for their commercialization. Employing an analysis of six leading B2B firms engaged in digital servitization, we conceptualize the perceptive, predictive, and prescriptive capacities of AI, which enhance resource efficiency by automating and augmenting data-driven analysis and decision making. We further identify two innovative classes of AI-enabled CBMs – augmentation (e.g., optimization solutions) and automation (e.g., autonomous solutions) business models – and their main circular value drivers. Finally, our research reveals novel dynamic capabilities underpinning the innovation of AI-enabled business models – value discovery, value realization, and value optimization capabilities – which enable manufacturers to make economic and sustainable values come to life in collaborating with customers and ecosystem partners. This study represents an important step in our understanding of how AI can drive circularity and sustainable innovation in industrial digital servitization. Overall, our study contributes to practice and the academic literature on AI, circular business models, and digital servitization by highlighting the potential of AI to empower CBMs for industrial manufacturers and the underlying processes of this digital transformation.

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

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.

The Role of Consumers in Business Model Innovations for a Sustainable Circular Bioeconomy

Over the last decade, various governments and supranational bodies have promoted the development of a circular bioeconomy (CBE) as a response to sustainability challenges. The transition towards a CBE requires the collaboration of different actors in the innovation (eco)system. With this conceptual paper, we apply a circular business model lens to address the research question: “What are the archetypical roles of consumers in business model innovations for a sustainable CBE?” We use a combination of complementary theories from the circular economy and bioeconomy literature, evolutionary innovation economics, sustainability transitions research, the business model literature, and the work on active consumers. Considering consumers’ agency as a continuum between the manufacturer-active paradigm and the consumer-active paradigm, we propose: (i) consumers in the manufacturer-active paradigm can actively influence circular business models with their purchase decision; (ii) consumers can act as lobbyists and influencers for circular business model innovation; (iii) in their different roles as customer, user, repairer, and reseller, consumers can incentivize organizations to adapt their business models to their needs; (iv) consumers can become key partners in the process of defining the normative orientation of the innovation paradigm for a CBE; (v) consumers can actively co-create value by means of co-ownership (e.g., through platform cooperatives).

Exploring the role of dynamic capabilities in digital circular business model innovation: Results from a grounded systematic inductive analysis of 7 case studies

There is already extensive literature that focuses on the leading role of digital technologies in fostering circular business model innovation. However, little attention has been paid so far to the dynamic capabilities involved in the digitally enabled transition from linear to circular. We contribute to reducing this gap by proposing an empirically grounded theoretical framework on the role of dynamic capabilities in digital circular business model innovation. Our contribution is grounded on the systemic inductive analysis based on the Gioia methodology of 7 in-depth semi-structured interviews with managers in charge of digital circular business model innovation. Companies were selected for their SASB materiality index and levels of technological intensity. Our findings highlight the role of dynamic capability in sensing and seizing digital circular business model innovation and, in particular, supply chain collaboration, lean methodologies, and project management.

Drivers and barriers for circular business model innovation

AbstractThe circular economy concept is gaining traction in academia, industry and policymaking as a strategy to reduce resource depletion, waste and emissions. Many authors see business model innovation as a critical lever for the concept's implementation on the organisational level. Despite the importance of the topic, the drivers and barriers to different types of circular business model innovation remain unclear. We address this gap by comparing drivers and barriers for four generic circular business model innovation types: start‐up, diversification, transformation and acquisition. Relying on a structured comparative literature review using cross‐reference searches, we develop a theoretical framework of drivers and barriers that we apply to a multi‐case study of 21 organisations covering three of the four types, with some additional insights on the fourth. We identify 25 barriers and 10 drivers, clustered into seven categories, and outline how they distinctively affect the innovation types. Start‐ups and diversifications are more commonly driven by market and financial factors, while transformations are led by market and organisational factors. These three types are highly affected by legal and financial barriers; however, while start‐ups are more prone to face value chain challenges, incumbents are more susceptible to market and organisational barriers. Our study provides novel empirical data that validate and complement previous research and offers an additional analysis perspective in the transition towards a more sustainable and circular economy.

The Circular Experimentation Workbench – a Lean and Effectual Process

Circular economy has become an important goal for companies to address climate change and pressing resource issues. Yet, the process of circular business experimentation is highly uncertain. While the lean startup has been applied to the circular experimentation process, the concept of effectuation has only been used to a limited extent, despite its potential. We investigate the following question: To what extent can lean startup and effectual thinking be combined to support the circular business model innovation process? We conducted 10 workshops where we combined these concepts with circular economy thinking. A novel process – the Circular Experimentation Workbench – was developed and evaluated to inspire participants to start experimenting with the circular economy. We found that lean startup and effectuation principles are highly complementary. Effectual questions can support the development of successful circular experiments. Our results were potentially limited by constraints related to the workshop format and action research method. Future research could build on the complementary perspectives of lean startup and effectuation to help accelerate the circular economy transition.

Fashion-as-a-Service: Circular Business Model Innovation in Retail

This article seeks to contribute to the literature on circular business model innovation in fashion retail. Our research question is which ‘model’—or combination of models—would be ideal as a business case crafting multiple value creation in small fashion retail. We focus on a qualitative, single in-depth case study—pop-up store KLEER—that we operated for a duration of three months in the Autumn of 2020. The shop served as a ‘testlab’ for action research to experiment with different business models around buying, swapping, and borrowing second-hand clothing. Adopting the Business Model Template (BMT) as a conceptual lens, we undertook a sensory ethnography which led to disclose three key strategies for circular business model innovation in fashion retail: Fashion-as-a-Service (F-a-a-S) instead of Product-as-a-Service (P-a-a-S) (1), Place-based value proposition (2) and Community as co-creator (3). Drawing on these findings, we reflect on ethnography in the context of a real pop-up store as methodological approach for business model experimentation. As a practical implication, we propose a tailor-made BMT for sustainable SME fashion retailers.

Circular business model innovation in consumer-facing corporations

Consumer-facing corporations have started setting ambitious circular economy goals. However, it is unclear what innovators in corporations do to help meet these targets. The literature on circular business model innovation (CBMI) has focused on business-to-business contexts, efficiency, and recycling, but lacks insight into the innovation activities within consumer-facing corporations to pursue higher strategies in the waste hierarchy such as repair and reuse. Because of the size and potential impact of such organizations, it is important to better understand these activities. The aim of this study is to investigate the essential activities innovators in consumer-facing corporations carry out as part of CBMI. We use a dynamic capabilities lens to review the literature on innovation activities according to the CBMI stages of visioning, sensing, seizing and transforming. The following research question is investigated: What practices and tools help corporations build dynamic capabilities during the CBMI process? We conduct in-depth interviews with key informants dealing with CBMI in three corporations (H&M, IKEA, and Philips), and use thematic analysis to analyze and map the data to the four stages. We thereby add a range of CBMI innovation activities to the current literature and provide additional guidance for practitioners in large corporations.

The Circular Sprint: Circular business model innovation through design thinking

The process of developing sustainable and circular business models is quite complex and thus hinders their wider implementation in the market. Further understanding and guidelines for firms are needed. Design thinking is a promising problem solving approach capable of facilitating the innovation process. However, design thinking does not necessarily include sustainability considerations, and it has not been sufficiently explored for application in business model innovation. Given the additional challenges posed by the need for time-efficiency and a digital environment, we have therefore developed a design thinking-based framework to guide the early development of circular business models in an online and efficient manner. We propose a new process framework called the Circular Sprint. This encompasses seven phases and contains twelve purposefully adapted activities. The framework development follows an Action Design Research approach, iteratively combining four streams of literature, feedback from sixteen experts and six workshops, and involved a total of 107 participants working in fourteen teams. The present paper describes the framework and its activities, together with evaluations of its usefulness and ease-of-use. The research shows that, while challenging, embedding sustainability, circularity and business model innovation within a design thinking process is indeed possible. We offer a flexible framework and a set of context-adaptable activities that can support innovators and practitioners in the complex process of circular business model innovation. These tools can also be used for training and educational purposes. We invite future researchers to build upon and modify our framework and its activities by adapting it to their required scenarios and purposes. A detailed step-by-step user guide is provided in the supplementary material.