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Article
Publication date: 8 June 2021

Phuc Hong Huynh

Digital innovation and circular business model innovation are two critical enablers of a circular economy. A wide variety of digital technologies such as blockchain, 3D…

Abstract

Purpose

Digital innovation and circular business model innovation are two critical enablers of a circular economy. A wide variety of digital technologies such as blockchain, 3D printing, cyber-physical systems, or big data also diverges the applications of digital technologies in circular business models. Given heterogeneous attributes of circular business models and digital technologies, the selections of digital technologies and circular business models might be highly distinctive within and between sectorial contexts. This paper examines digital circular business models in the context of the fashion industry and its multiple actors. This industry as the world’s second polluting industry requires an urgent circular economy (CE) transition with less resource consumption, lower waste emissions and a more stable economy.

Design/methodology/approach

An inductive, exploratory multiple-case study method is employed to investigate the ten cases of different sized fashion companies (i.e. large, small medium-sized firm (SME) and startup firms). The comparison across cases is conducted to understand fashion firms' distinct behaviours in adopting various digital circular economy strategies.

Findings

The paper presents three archetypes of digital-based circular business models in the fashion industry: the blockchain-based supply chain model, the service-based model and the pull demand-driven model. Besides incremental innovations, the radical business model and digital innovations as presented in the pull demand-driven model may be crucial to the fashion circular economy transition. The pull demand–driven model may shift the economy from scales to scopes, change the whole process of how the fashion items are forecasted, produced, and used, and reform consumer behaviours. The paths of adopting digital fashion circular business models are also different among large, SMEs and startup fashion firms.

Practical implications

The study provides business managers with empirical insights on how circular business models (CBMs) should be chosen according to intrinsic business capacities, technological competences and CE strategies. The emerging trends of new fashion markets (e.g. rental, subscription) and consumers' sustainable awareness should be not be neglected. Moreover, besides adopting recycling and reuse strategies, large fashion incumbents consider collaborating with other technology suppliers and startup companies to incubate more radical innovations.

Social implications

Appropriate policies and regulations should be enacted to enable the digital CE transition. Market patterns and consumer acceptances are considered highly challenging to these digital fashion models. A balanced policy on both the demand and supply sides are suggested. The one-side policy may fail CBMs that entail an upside-down collaboration of both producers and consumers. Moreover, it is perhaps time to rethink how to reduce unnecessary new demand rather than repeatedly producing and recycling.

Originality/value

The pace of CE research is lagging far behind the accelerating environmental contamination by the fashion industry. The study aims to narrow the gap between theory and practice to harmonise fashion firms' orchestration and accelerate the transition of the fashion industry towards the CE. This study examines diverse types of digital technologies in different circular business models in a homogeneous context of the fashion industry with heterogeneous firm types.

Details

International Journal of Productivity and Performance Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 13 April 2021

Karel Diéguez-Santana, Giselle Rodríguez Rudi, Ana Julia Acevedo Urquiaga, Emanuel Muñoz and Neyfe Sablón-Cossio

In this paper, the authors adopt the theory of the circular economy to study the transitions that take place in three case studies in Mexico and Ecuador. The work is aimed…

Abstract

Purpose

In this paper, the authors adopt the theory of the circular economy to study the transitions that take place in three case studies in Mexico and Ecuador. The work is aimed to systematize a circular economy assessment tool that fosters opportunities for improvement in business practices.

Design/methodology/approach

The methodology is based on a descriptive quantitative analysis, where a checklist is made with 91 items and nine study variables. This is from the study of the bibliography and business practice. Furthermore, the neural network method is used in a case study to predict the level of circular economy and the importance of each variable according to the sensitivity by the Lek’s profile method.

Findings

It is based on a descriptive quantitative analysis, where a checklist with 91 items and nine study variables is made, defined from a bibliographic study and business practice. Furthermore, the neural network method is used in a case study to predict the level of circular economy and the importance of each variable based on sensitivity.

Research limitations/implications

The application of the tool requires prior knowledge of the circular economy approach, which is why specialized personnel are needed for its application. This makes research more expensive in time and human resources.

Practical implications

The practical and methodological contribution of this work lies in the feasibility of the tool that favors the definition of improvement actions for the implementation contribution to the circular economy in business practices.

Social implications

The social contribution is framed in the gradual transition to circular economy approaches in underdeveloped countries.

Originality/value

The use of the neural network method to predict the level of circular economy in a case study allows making decisions in a predictive way. This encourages the development of the circular economy according to the context needs.

Objetivo

En este trabajo adoptamos la teoría de la economía circular para estudiar las transiciones que ocurren en tres casos de estudio en México y Ecuador. El trabajo tiene como objetivo sistematizar una herramienta de evaluación de la economía circular que fomente oportunidades de mejora en las prácticas empresariales.

Diseño / metodología / enfoque

La metodología se basa en un análisis cuantitativo descriptivo, donde se elabora un checklist con 91 ítems y nueve variables de estudio. Esto a partir del estudio de la bibliografía y la práctica empresarial. Además, el método de la red neuronal se utiliza en un estudio de caso para predecir el nivel de economía circular y la importancia de cada variable según la sensibilidad utilizando el método Lekprofile.

Hallazgos

Los resultados muestran que la herramienta es aplicable a diferentes contextos y simultáneamente permite la evaluación de la economía circular de forma holística. Además, la herramienta se puede vincular a técnicas predictivas, como el método de red neuronal. Esto se demostró en un estudio de caso.

Originalidad

en el uso del método de redes neuronales para predecir el nivel de economía circular en un caso de estudio. Esto permite la capacidad de tomar decisiones de forma predictiva y esto incentiva el desarrollo de la economía circular según la necesidad del contexto.

Limitaciones / implicaciones de la investigación

Las limitaciones se centran en la necesidad de conocer el tema de la economía circular para la aplicación de la herramienta. Por lo tanto, se necesita capacitación antes de comenzar un nuevo estudio. Esto encarece la investigación en tiempo y recursos humanos.

Implicaciones prácticas

El aporte práctico y metodológico de este trabajo radica en la viabilidad de la herramienta que favorece la definición de acciones de mejora para la contribución de la implementación a la economía circular en las prácticas empresariales.

Implicaciones sociales

La contribución social es parte de la transición gradual a enfoques de economía circular en países subdesarrollados.

Details

Academia Revista Latinoamericana de Administración, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1012-8255

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Article
Publication date: 19 March 2021

Simone Sehnem, Ana Beatriz Lopes de Sousa Jabbour, Diogo Amarildo da Conceição, Darciana Weber and Dulcimar José Julkovski

There is no literature that sought the revision and integration of ecological modernization of theory (EMT) and circular economy (CE). This article aims to answer the…

Abstract

Purpose

There is no literature that sought the revision and integration of ecological modernization of theory (EMT) and circular economy (CE). This article aims to answer the questions: How have companies developed circular economy practices within their operations? Why have companies invested in circular economy practices? Based on the answers to these questions, it would be possible to understand how the assumptions of EMT explain the adoption of CE practices.

Design/methodology/approach

The research method is based on multiple case studies with Brazilian craft brewery companies.

Findings

Companies studied have pursed the adoption of circular economy practices, but the full potential of the use of biological cycles within their processes of production has been hampered by the lack of external policies and clear governance toward circular economy. Thus, pollution prevention policies may be an important driver for organizations be able to advance in circular economy practices.

Research limitations/implications

Research limitations are coverage only of organizations located in an emerging country. A second limitation is that the data saturation was partially achieved in some of the analyzed cases, especially by the limitation of the time period surveyed (transversal research). The longitudinal evaluation is timely for circular economy surveys.

Practical implications

The formulation of a regulatory framework through a participative, interactive and decentralized process, capable of delegating responsibilities and incentives to all entities, to contemplate a tax restructuring for the alcoholic beverage sector, could corroborate to create a new standard of action for the sector.

Social implications

This document highlights how the principles of ecological modernization can contribute to the advancement of the circular economy. The understanding can help in the design of processes that provide circular and sustainable operations as a social good in a effective value.

Originality/value

The principles from EMT, such as the development of an institutional environment towards corporate environmental proactive, could enhance the adoption of circular economy practices within the brewery sector. Despite of the class association of the brewery sector has supported the companies studied to move forward in other matters, a clear governance is necessary to guide organizations towards circular economy practices.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

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Book part
Publication date: 13 September 2018

Martin Shanahan

This chapter focusses on the links between economic ideas, sustainability and the circular economy. Economics begins with the view that all resources are scarce and…

Abstract

This chapter focusses on the links between economic ideas, sustainability and the circular economy. Economics begins with the view that all resources are scarce and careful and informed choices must be made to ensure resources are used efficiently and not wasted. Given the fundamental importance of markets to human resource allocation decisions, unless economic concepts, especially markets and prices, are used to help transition towards the circular economy, a sustainable economic growth process is unlikely to be achieved. Economists have long grappled with the problems of resource depletion, unsustainable growth and intergenerational equity. Their ideas and views about the interconnection between markets, the environment and resource use have been in existence for several centuries. While frequently overlooked, some of these ideas have important insights for sustainable development and the implementation of a circular economy. The chapter will consider how economic concepts could be used to help society transition to a circular economy. It will also argue that difficulties with the implementation of a circular economy lie less with the application of economic instruments, and more with the political and institutional constraints that reduce our ability to think creatively and innovatively about ‘cradle-to-cradle’ processes.

Details

Unmaking Waste in Production and Consumption: Towards the Circular Economy
Type: Book
ISBN: 978-1-78714-620-4

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Book part
Publication date: 13 September 2018

Jen Ballie and Mel Woods

Fashion/textile small- to medium-sized enterprises (SMEs) are currently adding value to previously discarded textile waste by applying practical skills, knowledge and…

Abstract

Fashion/textile small- to medium-sized enterprises (SMEs) are currently adding value to previously discarded textile waste by applying practical skills, knowledge and expertise to rework and reuse this material. As a result, sustainable design strategies such as zero-waste pattern-cutting, design for disassembly and upcycling are beginning to emerge. However, the scope for redesign will always be limited and the complete lifecycle of the material used needs to be considered at the front-end of the innovation process, to optimise material lifespans and reduce consumer waste. Further work is also required to inspire and educate the next generation of designers to the creative potential of reuse, and help the industry to understand its viability, scalability and role in the future. This chapter explores how the principals of the circular economy might support business model innovation within fashion and textiles. To this end, an exploratory canvas tool for SMEs, ‘Circular by Design’, was devised to aid SMEs to embrace closed-loop systems and to identify the most appropriate sustainable design strategies for their business.

Details

Unmaking Waste in Production and Consumption: Towards the Circular Economy
Type: Book
ISBN: 978-1-78714-620-4

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Article
Publication date: 8 February 2021

Nancy Bocken and Paavo Ritala

Circular business models can improve resource use in a financially and environmentally feasible way. However, companies struggle to choose among the vast variety of ways…

Abstract

Purpose

Circular business models can improve resource use in a financially and environmentally feasible way. However, companies struggle to choose among the vast variety of ways to achieve circularity within a business model. The purpose of this paper is to offer a pragmatic guide for making strategic decisions on circular business models.

Design/methodology/approach

This paper develops a conceptual model of six different strategic approaches to circular business models and provides examples to business cases and practice to illustrate these.

Findings

This study identifies two critical strategy choices companies should make. First, an innovation strategy addresses the extent to which circularity is achieved with internal or external stakeholders. Second, a resource strategy addresses how companies achieve circularity by narrowing, slowing or closing resource loops. Using examples from business practice, this study illustrates how the combinations of these two strategies can be used to design competitive circular business models. Key managerial questions are also identified to help decide upon a feasible strategy for circular business model innovation.

Originality/value

While different types of circular business models have been described, it is less clear what the strategic choices are that companies need to make to find feasible business cases for circularity in terms of value proposition, value creation and delivery and value capture. This study outlines these through a “circular business model strategy framework”.

Details

Journal of Business Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0275-6668

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Book part
Publication date: 12 March 2020

Martin H. Kunc, Federico Barnabè and Maria Cleofe Giorgino

The study aims to contribute to the debate on how to identify and manage an organization’s sustainability-related resources and processes by understanding the impact of…

Abstract

The study aims to contribute to the debate on how to identify and manage an organization’s sustainability-related resources and processes by understanding the impact of business activities on the environment and evaluating actions to ameliorate their impacts. Within this debate, and specifically taking into consideration the opportunity to support circular economy actions and initiatives, the study focuses on integrated reporting (IR) practices. In detail, this study advocates the joint use of IR principles with the dynamic resource-based view (DRBV) of the firm, adopting their representation of resources and impact of the business activities to identify environmental friendly “hot spots” in organizations. The framework is illustrated through two exploratory case studies.

Details

Non-Financial Disclosure and Integrated Reporting: Practices and Critical Issues
Type: Book
ISBN: 978-1-83867-964-4

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Book part
Publication date: 6 November 2018

Aleksei V. Bogoviz and Bruno S. Sergi

This chapter elaborates the peculiarities for the formation of the circular economy, substantiates its current contribution and future potential as to economic growth, and…

Abstract

This chapter elaborates the peculiarities for the formation of the circular economy, substantiates its current contribution and future potential as to economic growth, and elaborates the concept and the implementation of the circular economy in Russia. Russian projects in the sphere of sustainable development and “ecologization” (reduction in energy, resource consumption, and polluting emissions) of industrial productions, mitigation, and processing of waste, protection of water resources, and restoration of forests are built into the linear model of production. The performed calculations on the basis of the existing statistical data allow evaluating the scale of the circular economy in Russia at $ 755.05 billion (as GDP in current market prices is 30.97% provided by the volume of used and decontaminated waste of production and consumption). In future, it is highly probable that the scale of the circular economy in Russia will reach 50% of GDP – $ 950.95 billion (as of 2018). To accelerate the rate and quality of economic growth, positive results from the implementation of these projects must be achieved. Complete transition to the model of the circular economy can provide new possibilities for long-term growth and the development of the Russian economy.

Details

Exploring the Future of Russia’s Economy and Markets
Type: Book
ISBN: 978-1-78769-397-5

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Article
Publication date: 11 November 2020

Boleslaw Rok and Monika Kulik

The purpose of this paper is to explore how circular start-ups design and implement innovation into their business models to increase their positive impact.

Abstract

Purpose

The purpose of this paper is to explore how circular start-ups design and implement innovation into their business models to increase their positive impact.

Design/methodology/approach

This qualitative study is based on an exploratory multiple-case study involving six circular start-ups with positive impact in Poland. Data gathering took place via in-depth interviews with start-up founders.

Findings

The analysis demonstrates that three factors, which are strongly interconnected, can significantly influence the development of a circular start-up. The first is the purpose-led motivation for circularity as a solution, mostly concentrated on the environmental education of different market actors. The second factor is built on the aim to increase the positive impact by addressing the most pressing social and environmental problems. It determines the impact on society as well as on the environment and the extent to which its model can be scaled up. The third factor is driven by the understanding of the purpose of the innovation, concentrated on the business model innovation regarding circularity.

Practical implications

This paper demonstrates the benefits for diverse stakeholders and the importance of using circular business models in start-up development. Circularity can be perceived as a main part of the new approach to improve sustainability.

Originality/value

Circular start-ups represent a new phenomenon in the entrepreneurial market. While the structure and logic of the circular business model in start-ups are significantly unexplored in the management literature, this model is viewed as a crucial step in the direction of increasing the positive impact of start-ups. From a theoretical and practical perspective, it is important to understand the differences and similarities in this area within different markets.

Details

Corporate Governance: The International Journal of Business in Society, vol. 21 no. 2
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 18 December 2020

Andreas Beckmann, Uthayasankar Sivarajah and Zahir Irani

Circular economy is presented as an approach to economic growth that is in line with sustainable development. However, the recent literature has highlighted the limits of…

Abstract

Purpose

Circular economy is presented as an approach to economic growth that is in line with sustainable development. However, the recent literature has highlighted the limits of the concept in terms of environmental sustainability. The study examines the relationship between circular economy and conservation of ecosystems, using a case study on the implications of a circular economy for Slovak forests and forest sector.

Design/methodology/approach

This study adopts a qualitative methodology through a focused review of the relevant literature on circular economy and sustainable development and primary data gathered through semi-structured interviews with 15 experts and practitioners in the forest sector, forest conservation and circular economy context, both from within as well as outside of Slovakia.

Findings

The study finds that the forestry sector has an important role to play in a shift to a circular economy in Slovakia, with significant opportunities for improved efficiency as well as substitution of wood for non-renewable resources. There is also growing potential for ecosystem stewardship and restoration. However, the increased application of biomass could crowd out other needs, including for biodiversity. Safeguarding these services depends ultimately on good governance.

Originality/value

The study highlights that circular economy taken in a narrow focus on resource efficiency is insufficient to ensure environmental sustainability but rather needs to be set within the broader environmental and social context.

Details

Journal of Enterprise Information Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0398

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