Circular Economy Business Modelling: Decoupling value creation from resource consumption within manufacturing companies

Abstract

Circular economy has rapidly gathered momentum within sustainable development initiatives due to its potential for decoupling economic development and growth from resource consumption. Manufacturing companies play a critical role in the implementation of circular economy at the industrial level. Success with this role requires a rethinking of the overall value generation logic and the redefinition of business success, by reconfiguring existing business models or creating new business models for circular economy. The transition of manufacturing companies’ business models to circular economy is still limited, with low market penetration across sectors. Among several external and internal barriers, manufacturing companies face shortcomings in capabilities and skills and require knowledge and scientific-based guidance for business modelling within the context of circular economy. So far, academic literature is unable to support companies adequately, due to a core gap related to the lack of systematised practices to provide guidance and advice to manufacturing companies during the design of business models for circular economy. Based on this gap, a design research methodology was applied in this research, with the objective of developing a systematised framework to provide guidance and advice for managers to design business models for circular economy within manufacturing companies. The methodology comprised four main studies based on the combination of a varied set of methods (e.g. systematic literature review, action research, case studies, expert validation) to prescribe and evaluate required support to fulfil the research objective. Moreover, seventeen manufacturing companies and seven academic experts were engaged in the co-creation and/or evaluation of the proposed supports for circular economy business modelling. Two main results are presented in this PhD thesis. First, an overview of the state-of-the-art literature about approaches for circular economy and sustainability business model innovation is provided, which includes the systematisation and comparison of more than 90 frameworks, methods and tools. Then, a systematised framework to support circular economy business modelling and cover identified gaps in literature and practice is presented. The framework comprises three main elements: (i) a holistic process model with recommended practices for circular economy business modelling; (ii) business model patterns to support focused ideation and specialised configuration of business models for circular economy within specific manufacturing sectors; and (iii) a high-fidelity prototype expert system to provide advice for circular economy business modelling to manufacturing companies. The in-depth evaluations within real business scenarios demonstrated that the application of the proposed framework and its elements was successful in supporting most manufacturing companies with the design of business models that can decouple economic value creation from resource consumption. Moreover, companies were able to start implementing and planning the scaling up of pilot projects.