The current linear economy focuses on a ‘take-make-use-dispose’ paradigm, prioritizing ‘volume-over-value’. Significant planning and experimentation are needed to understand how to develop new business models that are not only ‘circular’, but also desirable for people, technically feasible and financially viable. More insight is needed into the practices of business experimentation to accelerate the transition to a circular economy. We investigate the following: What types of experimentation practices do companies adopt in the transition to a circular business model? Our analysis is based on action research with over 40 organizations. Based on this, we provide an overview of business experimentation practices inside a diverse range of organizations and possible tools, approaches and lessons learned. Recommendations focus on the practices, process, environmental impact assessment, partnering and management of complexity in future tools and methods. We also propose a framework for circular business experimentation and future research directions.

Circular oriented innovation aims to address sustainability problems such as resource scarcity, pollution and climate change by (re)designing industrial products, processes, business models, and value network configurations. Although the literature identifies collaboration as crucial for circular oriented innovation—due to the complexity, risk and uncertainties involved—few tools have been developed to support it. To address this gap, we develop and test a tool that helps companies ideate to identify partners and value within circular oriented innovation. The tool integrates decision-making principles from the entrepreneurship theory of effectuation within a design thinking approach to stimulate collaborative ideation of circular propositions. We demonstrate and test the tool through six workshops, and collect data via observations, field-notes, assessment forms and user discussions. Our results show that: 1) users are receptive to visualisation and effectuation-based questions to collaboratively ideate circular propositions; 2) expert facilitation helps to maintain a circularity focus to avoid ‘business-as-usual’ ideas; and 3) differences in the maturity and scope of projects may influence the usefulness of the tool. We contribute to theory by demonstrating the integration of effectuation, design thinking, and lean experimentation approaches into a tool to advance circular oriented innovation. We contribute to practice with the tool itself that supports early and quick ideation to identify partners and perceived value. This supports companies to collaborate and advance the design of circular propositions that bring circular business model ideas closer to implementation.

Access-based product-service systems (AB-PSS) are business models that can potentially decouple the satisfaction of consumer needs from environmental impacts. Hence, they have been promoted for the circular economy. Their sustainability potential has not yet been realised because consumer adoption is lagging. Although this challenge has been studied for two decades, knowledge to identify and address AB-PSS adoption barriers that matter to consumers is lacking. We hypothesise that the duration of use, the time a consumer obtains exclusive access to a specific product (short-term vs. long-term) and the type of product (bicycles vs. clothing) moderate the importance of AB-PSS adoption barriers to consumers. We compared several adoption barriers across four AB-PSS and found that the duration of use and the type of product significantly moderated the importance of some AB-PSS adoption barriers. More specifically, the Effort to access has a higher influence on consumer preference for short-term AB-PSS, whereas Product quality has a higher influence on consumer preference for long-term AB-PSS. We also found that Effort to access and Product characteristics were more important for bicycle AB-PSS, whereas Contamination and Product quality were more important for clothing AB-PSS. These insights help companies to identify and design out key AB-PSS consumer adoption barriers.

Circular oriented innovation commonly requires collaboration. Yet, to date, circular research lacks empirical investigation into collaborative processes. Collaborative processes are, however, highly researched within strategic management literature, thus offering valuable insights. The purpose of this paper is to investigate, identify and order the processes that companies undertake when designing and implementing collaborations for circular oriented innovation. Firstly, we integrate disparate strategic management literature to identify collaborative process ‘know-how’ and relevant ‘building blocks’. Secondly, we generate practice-based insights, via semi-structured interviews and desk-research, across three research cycles to understand how companies collaborate within circular oriented innovation. Theoretical contributions stem from the assessment and integration of strategic management collaborative process knowledge into the circular context. Managerial contributions derive from the process model that describes how to build collaborative circular oriented innovation. Furthermore, the principal result is the empirical investigation and identification of collaborative circular oriented innovation challenges. Challenges relate to how to; 1) formulate an initial ‘circular proposition’, 2) involve the ‘right’ people, 3) align upon a shared circular purpose, 4) develop circular oriented governance and decision-making, and 5) develop a circular oriented value capture model focused on collective outcomes. These form the basis for our proposed future research agenda. This research agenda aims to stimulate researchers and practitioners to further demystify collaborative processes to accelerate the transition towards a circular economy.

This study focuses on the boundary-spanning nature of sustainable business model innovation, studying multi-stakeholder engagement and alignment. Drawing on the concept of boundary work, we explore the different types of organizational boundary changes between focal companies and their external stakeholders, investigating specifically the process of exploring, negotiating, disrupting and realigning organizational boundaries. Based on an exploratory study of nine different sustainable business model initiatives from for-profit and non-profit organizations, our analysis shows how actors involved need to find alignment at normative, instrumental and strategic dimensions in order to achieve sustainable value creation. However, complexity for alignment emerges through different understandings of value, diverging interests, division of risks and responsibilities, and existing processes and activities that limits actors’ openness to align. Mutual boundary changes are thus necessary in the process of multi-stakeholder engagement in order to enhance organizations’ understanding of value and to capture the envisioned value. This paper functions as an agenda-setting paper, presenting first insights on how the boundary work lens can advance our understanding of alignment processes between focal organizations and their external stakeholders, required for sustainable business model innovation.

The circular economy may help firms to maximize the value of their material resources and minimize the overall resource use, waste, pollution and emissions of their business activities. Implementing a circular economy program requires radical changes in product, business model and ecosystem innovation. Most research on circular oriented innovation takes a product or business model perspective. Few publications have explored how to innovate in ecosystems: how a group of loosely coupled organizations can change how they interact with each other to achieve a collective outcome. This study proposes the Circularity Deck: a card deck-based tool that can help firms to analyze, ideate and develop the circularity potential of their innovation ecosystems. The tool is based on a literature review of circular oriented innovation principles, and of practical examples that show how these principles have been applied. The principles are organized according to the intended circular strategy outcome that they pursue (i.e., narrow, slow, close, regenerate and inform material and energy flows), and the extent of the innovation perspective that is needed to operationalize a principle (i.e., product, business model, or ecosystem innovation). This review and categorization process first produced a novel analysis of the circular economy innovation landscape, using an ecosystem perspective. Second, these results served to develop the Circularity Deck, which was further developed and tested for ease of use and perceived usefulness in 12 workshops with 136 participants from 62 different organizations. The Circularity Deck provides an approach for future research and practice to integrate new principles and examples that can help firms to analyze, ideate and develop circular innovation ecosystems.

Collaborative innovation is necessary to explore and implement circular economy strategies. Yet, empirical investigations into such collaborations are scarce. It is unclear whether the circular context creates differences or represents adaptions within how collaborative innovation is conducted. We draw upon strategic management and open innovation literature to highlight what is known about collaborative innovation and the types of innovation conducted. We use these insights to investigate explorative qualitative case research into how practitioners in the Netherlands have conducted collaborative circular oriented innovation. Our findings show that open innovation criteria can aid our understanding and analysis. Key managerial considerations relate to the incremental or systemic nature of the innovation pursued, which induce different collaborative projects and knowledge management structures. For incremental innovation, we observe phases of collaboration, whereas for more systemic innovation, we observe a more collaborative portfolio and layered approach. Furthermore, the more radical innovation pursuits that explore slowing or recovery strategies, especially beyond business-to-business arrangements, challenge companies. A crucial challenge remains related to how to develop and assess collaborative and system-oriented business models in the transition towards a circular economy. Finally, future research is needed to assess whether the current modes of collaborative innovation are sufficient to deliver a circular economy transition.

A circular economy maximizes the value of material resources and minimizes greenhouse gas emissions, resource use, waste and pollution. We will posit that circularity needs to be understood as a property of a system (e.g., the mobility system of a city), rather than a property of an individual product or service (e.g., a car or a car-sharing service). Hence, there is a need for more knowledge on how to innovate towards ‘circular ecosystems’. This study proposes a set of principles for ‘circular ecosystem innovation’, based on: 1) a concise literature review to retrieve recommended principles on how to successfully innovate in ecosystems, 2) a mobility case of circular ecosystem innovation to investigate how relevant and useful these principles are for circular oriented innovation. The case data include 20 interviews, workshop data and internal background documents. The identified principles can be categorized in three groups: 1) collaboration (i.e., how firms can interact with other organizations in their ecosystem to innovate towards circularity), 2) experimentation (i.e., how firms can organize a structured trial-and-error process to implement greater circularity) and 3) platformization (i.e., how firms can organize social and economic interactions via online platforms to achieve greater circularity). Future research may focus on identifying opportunities and barriers to applying these principles in different contexts than in the one that is investigated in the present study.

Next to the redesign of industrial products and processes, sustainable business model innovation is a strategic approach to integrate environmental and social concerns into the objectives and operations of organizations. One of the major challenges of this approach is that many promising business model ideas fail to reach the market, which is needed to achieve impact. In the literature, the issue is referred to as a “design-implementation gap.” This paper explores how that critical gap may be bridged. In doing so, we contribute to sustainable business model innovation theory and practice. We contribute to theory by connecting sustainable business model innovation with business experimentation and strategic design, two innovation approaches that leverage prototyping as a way to iteratively implement business ideas early on. Using a design science research methodology, we combine theoretical insights from these three literatures into a tool for setting up small-scale pilots of sustainable business models. We apply, evaluate, and improve our tool through a rigorous process by working with nine startups and one multinational company. As a result, we provide normative theory in terms of the sustainable business model innovation process, explaining that piloting a prototype forces organizations to simultaneously consider the desirability (i.e., what users want), feasibility (i.e., what is technically achievable), viability (i.e., what is financially possible), and sustainability (i.e., what is economically, socially and environmentally acceptable) of a new business model. Doing so early on is functional to bridge the design-implementation gap of sustainable business models. We contribute to practice with the tool itself, which organizations can use to translate sustainable business model ideas defined “on paper” into small-scale pilots as a first implementation step. We encourage future research building on the limitations of this exploratory study by working with a larger sample of companies through longitudinal case studies, to further explain how these pilots can be executed successfully.

Access-based product-service systems (AB-PSS) allow consumers to use products for a fee and might support the transition towards a circular economy. This type of business model could decrease negative impacts of consumption by reducing the number of products needed; either by extending products’ lifetimes or by intensifying the use of products. Many AB-PSS in consumer markets are highly digitalised; they utilise digital platforms, have sensors embedded in the products, and rely on users’ smartphones. To better understand how digitalisation impacts consumers’ attitudes and use experiences in mobility AB-PSS, we applied a mixed-methods approach consisting of a survey (n=47) and interviews (n=10). Our findings suggest that many short-term AB-PSS, such as bicycle sharing, owe their recent success to digitalisation. Further, consumers’ digital confidence influences their attitude towards short-term AB-PSS. During the use of AB-PSS, users value the convenience and flexibility enabled by the digital aspects. Digitalisation also made short-term mobility AB-PSS susceptible to disruptions because the AB-PSS rely on the functioning of many digital aspects. Users seem to dislike phoning customer service and increasingly depend on their smartphones. We also provide a brief outlook of what 5G mobile networks might imply for mobility AB-PSS. With this paper, we contribute a consumer perspective on the digitalisation of services. Our findings help service designers, user experience designers, and app developers to design digitalised AB-PSS for consumer markets.

The intensification of industrial activity within an unsustainable development paradigm caused an alarming environmental crisis intertwined with societal problems on a global scale. Sustainable design theory contains an extensive body of knowledge on how these environmental and societal issues can be addressed by rethinking industrial products, processes and, more broadly, how organizations operate in the context of a more sustainable socio-economic system. Nevertheless, evidence shows that implementing these ideas is a problematic yet under addressed aspect, resulting in a gap between abstract speculations and concrete action. In this study, we focus on this critical gap by looking at how existing theory of sustainable design is implemented in business practice. To this end, we conduct a literature review followed by interviews with twenty international experts, to uncover their knowledge related to relevant project experiences. The outcome is a framework that integrates existing sustainable design theory with important business concepts, clustering it into four literature streams:ecodesign, product service system design, sustainable business model design and collaborative ecosystem design. These streams correspond to four levels of design for sustainable innovation. The framework also encompasses a set of themes related to the implementation of sustainable design theory in business practice across the aforementioned four levels. Based on this, we outline our contributions to theory and practice, and pinpoint recommendations for academic researchers, industrial designers and business managers who want to leverage their professional position to play an active role in the transition toward sustainable development.

Circular business model experiments may help firms transition towards a circular economy. Little is known about how the participants of experimentation – entrepreneurs, intrapreneurs, innovation managers – develop and test their assumptions during the experimentation process to achieve more circular outcomes. Using a design-science approach, we investigate this process and develop principles to improve it. This is done during three workshops in different contexts: an innovation festival with 14 early-stage circular startups, a workshop with a health technology incumbent, and a workshop with six growth-oriented startups. We find that analyzing their available means – what they find important and prefer to happen (part of their identity), what they know (their skills and knowledge), and whom they know (their social network) – helps to understand how the participants develop and test their assumptions. We show how the mindset and awareness of the participants impact how much attention they pay to the circularity potential of their envisioned circular business models. Based on these insights, we propose a set of principles to prepare the innovation participants for experimentation, and to increase their ability to reflect on their circularity assumptions. Future research is needed to further grow our understanding of the types of principles that can guide meaningful experimentations towards a circular economy.

Online platforms have a growing influence on how people interact with the physical world. They organise data streams, economic interactions and social exchanges of their users. Competitive dynamics in this emerging ‘platform society’ revolve around the ability to attract users to a platform, and to collect and analyse data from their interactions to achieve network effects. This chapter is about the roles of online platforms in enabling a more sustainable and circular economy. It identifies and describes three potential roles: they can enable people and organisations to (1) market, (2) operate and (3) co-create products, components and material. The identified roles provide a playground for firms to experiment with online platforms to advance their digital transition towards a circular economy.

Sustainable business model innovation is about creating superior customer and firm value by addressing societal and environmental needs through the way business is done. Business models require intentional design if they are to deliver aspired sustainability impacts. Scant research has been done on ‘ecologies’ of different business models in order to understand and improve these and create positive impact on the environment, society, economy and other key stakeholders. Hence, in this paper a novel framework is presented to enable a systemic form of sustainable business model experimentation. The framework is based on the recognition of three key issues which have not yet been sufficiently incorporated in the literature on sustainable business models: construct clarity, boundary setting and uncertainty about outcomes. These concepts are discussed first. Building on earlier work, the resulting framework incorporates potential side-effects and boundary setting based on the concept of an ‘ecology of business models’. Second, an approach is proposed that could stimulate more profound forms of sustainable business model innovation: The Ecology of Business Models Experimentation map. Third, the approach is illustrated through two cases. The approach could help minimise symbiotic dependency on less sustainable business models; help destroy unsustainable business models by outcompeting them; and maximise contributions to favourable institutional infrastructures for more sustainable business models. This paper contributes to research on sustainable business model innovation, design and experimentation by providing a potential approach for ‘business model ecology redesign’.

We investigate why companies collaborate within the circular oriented innovation process. The purpose is to understand what motives trigger collaborative circular oriented innovation, as well as conditions, drivers and barriers. First, we define circular oriented innovation building on sustainable oriented innovation literature. Subsequently, we investigate 11 leading circular economy companies operating within the Netherlands, who developed collaborative circular oriented innovation activities. 'Hard' and 'soft' dimensions for innovation are identified and applied to delineate the drivers and barriers for collaborative circular oriented innovation. Our findings indicate that collaborations are conducted by entrepreneurially-minded actors through sharing a vision, enthusiasm, and crucially, a credible proposition for a circular economy. Furthermore, collaboration is sought early, to co-develop the problem and solution space and integrate disparate knowledge from across the value network, to mitigate increased complexity. Motives to collaborate vary between personal and organisational, and intrinsic and extrinsic levels. Collaborations start based on a relational basis between 'CE front-runners' to advance knowledge through experimentation. 'Soft' challenges to advance collaborations towards the competitive remain around culture, and the mindset to share rewards and risks. Without suitable solutions to these challenges, collaborative circular oriented innovation could remain underdeveloped within the transition towards the systemic level.

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The Circular Economy is viewed as an important driver for resolving resource issues and tackling sustainability issues more broadly. The fashion industry operates in a largely linear way and suffers from various environmental, societal and economic challenges. In a Circular Economy, first and foremost, products need to be retained at the highest level, thus slowing resource loops. Slowing resource loops goes against current fast fashion trends and therefore appears the most difficult approach to pursue. This paper investigates how a large established retailer aims to slow resource loops as part of a broader project targeted to significantly reduce textile waste to landfill. The retailer collaborated with a university partner to pursue circular business model experiments. This paper reports on the approach for a slowing resource loops experiment around building sewing capabilities. Suggestions for future research and practice on circular business model experimentation are included.

The circular economy (CE) requires companies to rethink their supply chains and business models. Several frameworks found in the academic and practitioner literature propose circular economy business models (CEBMs) to redefine how companies create value while adhering to CE principles. A review of these frameworks shows that some models are frequently discussed, some are framework specific, and some use a different wording to refer to similar CEBMs, pointing to the need to consolidate the current state of the art. We conduct a morphological analysis of 26 current CEBMs from the literature, which includes defining their major business model dimensions and identifying the specific characteristics of these dimensions. Based on this analysis, we identify a broad range of business model design options and propose six major CEBM patterns with the potential to support the closing of resource flows: repair and maintenance; reuse and redistribution; refurbishment and remanufacturing; recycling; cascading and repurposing; and organic feedstock business model patterns. We also discuss different design strategies to support the development of these CEBMs.

This paper aims to provide conceptual insight on ‘Circular business model experimentation’ by exploring the concept and potential approaches to pursue. The Circular Economy can be a successful driver for change by focusing efforts on economic and environmental issues while also addressing socio-economic challenges such as (un)employment. The business model of firms is viewed as a systematic driver for change in a company, bringing together the various elements of the way of doing business: the value proposition (what value is proposed and to whom); value creation and delivery (how this value is provided) and value capture (how money is made and other forms of value are captured). To develop and validate novel business models, experimentation is needed. While experimentation has been prominent in natural sciences, economics and transitions management literature, it has not yet mainstreamed as a potential business approach, despite the fact that it has been heralded as a key driver for competitiveness and sustainability success. This paper explores the concept of Circular Business Model Experimentation by addressing the following questions: What is Circular Business Model Experimentation? What approaches are available for business? Based on this, suggestions for future research and practice on circular business model experimentation are developed.