From Circular Initiatives to Potential Business Model Reconfiguration: Sensing and Seizing Processes among SMEs in an Innovation Hub

Abstract

This thesis examines how small and medium-sized enterprises (SMEs) develop circular innovation initiatives through sensing and seizing processes toward potential business model reconfiguration in a collaborative innovation hub. While circular innovation is often associated with business model change, less is known about the early-stage development process through which firms move from broad circular ambitions to actionable initiatives before implementation takes place. This study employs a qualitative multiple-case design to analyse four SME cases and one expert/context case within a regional innovation hub. In the findings, it is shown that circular initiatives did not develop linearly from ideation to implementation. Instead, firms first recognised and reframed circular problems, then mobilised resources, partners, legitimacy, and pilot conditions to prepare for validation. This process was supported by the innovation hub which provided access to networks, external knowledge, student capacity, reflection, and legitimacy. However, the cases did not show completed business model reconfiguration. Rather, they demonstrated a pre-reconfiguration stage in which potential implications for value creation, value delivery, and value capture became visible but were not yet embedded in routines, structures, or revenue mechanisms. The thesis contributes to the dynamic capabilities literature by showing how sensing and seizing function as collaborative, early-stage development processes in circular innovation. It also contributes to practice by clarifying how innovation hubs can support SMEs before circular initiatives become fully implemented.