Circular is the New Black

Abstract

The fashion industry's shift to a circular economy (CE) is vital to reducing its environmental impact. Currently responsible for 4% of global greenhouse gas emissions, more than aviation and shipping combined, the fashion industry's emissions are projected to rise by 2.7% annually without increased decarbonisation efforts. Circular-born start-ups (CBSs) are crucial in this transition by introducing circular innovations (CIs) that close, slow, or narrow resource loops. However, CBSs face challenges in market entry, and research on this topic is limited.

This study, using a multiple-case study design within the French fashion industry, explores how CBSs introduce their CIs. Data was collected from nine French CBSs through semi-structured interviews and primary sources, complemented by two expert interviews. The study found that CBSs use circular strategies and approaches like recycling and repair to position their CIs, communicating value propositions through tangible and intangible benefits. Collaborations with brands, suppliers, and research centers are essential for market entry, knowledge development, and resource mobilization. CBSs face challenges such as regulatory compliance and market perceptions, which they address through continuous R&D and pilot projects. The study identifies six inducement mechanisms (e.g., regulatory support) and six blocking mechanisms (e.g., data gaps) influencing CI introduction.

The research provides insights into the CE in the fashion industry, contextualizing CIs and offering empirical insights into CBS operations and interactions. It contributes to the Technological Innovation Systems (TIS) literature and has practical implications for enhancing CBS collaborations and supporting innovation in the industry.