Designing the Business Models for Circular Economy—Towards the Conceptual Framework

Abstract

Switching from the current linear model of economy to a circular one has recently attracted increased attention from major global companies e.g., Google, Unilever, Renault, and policymakers attending the World Economic Forum. The reasons for this are the huge financial, social and environmental benefits. However, the global shift from one model of economy to another also concerns smaller companies on a micro-level. Thus, comprehensive knowledge on designing circular business models is needed to stimulate and foster implementation of the circular economy. Existing business models for the circular economy have limited transferability and there is no comprehensive framework supporting every kind of company in designing a circular business model. This study employs a literature review to identify and classify the circular economy characteristics according to a business model structure. The investigation in the eight sub-domains of research on circular business models was used to redefine the components of the business model canvas in the context of the circular economy. Two new components-the take-back system and adoption factors-have been identified, thereby leading to the conceptualization of an extended framework for the circular business model canvas. Additionally, the triple fit challenge has been recognized as an enabler of the transition towards a circular business model. Some directions for further research have been outlined, as well.

Institutional incentives in circular economy transition: The case of material use in the Dutch textile industry

“…Several existing conceptual frameworks explain why CE is the most effective way to go about material use (Murray et al, 2015;Lewandowski, 2016). However, there is no existing unified theory or conceptual approach on how CE can be implemented (Murray et al, 2015).…”

Conceptualizing the Circular Economy: An Analysis of 114 Definitions

“…Lewandowski (2016), claim that circular business models are widely seen at the core of CE. They are "the driving force in the shift towards [CE]" (EUKN, 2015).…”

“…These can blur the concept since they frequently operate in significantly different worlds of thought (Gladek, 2017;de Vries and Petersen, 2009). Blurriness has been raised as a criticism against concepts such as the green economy one (Loiseau et al, 2016) and it has also been raised against CE in various CE review articles we identified (Ghisellini et al, 2016;Lieder and Rashid 2016;Blomsma and Brennan, 2017;Sauvé et al, 2016;Murray et al, 2017;Geissdoerfer et al, 2017;Lewandowski, 2016; further details in Table 1) and beyond. For instance, Lieder and Rashid (2016, p.37) point out that "there are various possibilities for defining [CE]", while Yuan et al (2008, p.5) write that "there is no commonly accepted definition of [CE]".…”

Routines, Rigidity and Real Estate: Organisational Innovations in the Workplace

“…Also, the embodied carbon emissions of the materials used to construct the building are not being optimised if a large portion of the building is consistently unused. As a consequence, desk-sharing has even been cited as a good example of the circular economy in the built environment [29]. Underutilised buildings can even contribute to urban sprawl and an example of this is the construction of new buildings on the edge of cities while many spaces that are already constructed remain unused.…”