Circular economy business models in developing economies: Lessons from India on reduce, recycle, and reuse paradigms

Abstract

According to the UN Sustainable Development Goals in 2016, the demand for resources will require natural resources equivalent to two and three planets by 2030 and 2050, respectively. The linear economic model driven by a "take-make-dispose" philosophy is unable to manage the demand and supply balance in consumption of natural resources. This imbalance is affecting the sustainability of the countries and enterprises as well as affecting the global supply chain leading to socioeconomic and environmental risks and volatility. Realizing the future resource scarcity challenge, the current linear economy model is giving way to the circular economy model. The circular economy model focuses on careful alignment and management of resource flows across the value chain by integrating reverse logistics, design innovation, collaborative ecosystem, and business model innovation. This article examines how circular model is pushing the companies in developing economies like India to design and implement business models that are based on reduce, reuse, and recycle paradigms. K E Y W O R D S business models,

Designing business models in circular economy: A systematic literature review and research agenda

“…The interplay between policymakers and companies is fundamental for allowing the transition at the firm level, as it can facilitate or hamper the development of circular business models by directly intervening into the industries through normative regulations (Levänen, Lyytinen, & Gatica, ). An example of this activity is represented by the European Union Circular Economy Action Plan of 2015 (Leipold & Petit‐Boix, ) or by the United Nation's Sustainable Development Goals of 2016 (Goyal, Esposito, & Kapoor, ), as well as by the emerging European Regulation Eco‐Management and Audit Scheme, which aims to support companies in implementing voluntary tools for managing the environmental aspects of their operations (Merli & Preziosi, ).…”

“…Among the main managerial practices for value capture, scholars have focused their attention on take‐back systems and product–service systems (PSSs). In a circular economy, implementing these practices means that producers maintain the ownership of products, as well as of their components, while customers become their users and pay for their use (Goyal et al, ; Pezzotta, Cavalieri, & Romero, ).…”

Barriers to effective circular supply chain management in a developing country context

“…By 2050, the developing countries will account for more than 90% of the world's people. The concentration of population in under developed countries poses a significant challenge and need for systemic intervention because the concept of circular economy is rather new for the developing countries as compared to the developed countries (Goyal et al, 2016). Waste management is important aspect in the world where majority of the problems is faced by most of the Asian countries.…”

Circular Economy Framework in Recycling Company: Exploratory study

“…The business transformation from the traditional model, linear economy, to the circular economy in the last few decades has become a global debated. This is due to a significant increase in attention from the government [1], NGOs [2,3] and scholars [4,5,6] towards environmentally friendly manufacturing policies. In supporting environmentally friendly business practices, the Ellen MacArthur Foundation [7] suggests that companies consider the circular economy model for their operational systems.…”