Business Models for the Circular Economy: Towards an updated library of building blocks and a CEBM typology
Keywords
Loading...
Authors
Issue Date
2017-03-08
Language
en
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Current linear economy in Europe is merely concerned with financial flow, without considering to preserve balance of societal or natural ecosystems welfare. The structure of the linear economy can be conceptualized within the so-called ‘take-make-dispose’ manner in which industrial systems convert raw materials into finished products that consumers buy and dispose at ‘end-of-life’ (Mathews and Tan, 2011). This linear model has two profound implications on the environment and society. First the creation of accumulated waste, that usually ends up in landfills and oceans and second it creates a societal dichotomy (i.e. producers and consumers) which disconcerts society from taking a collective approach towards effective resource utilization.
This dissociation of economy with society and the environment has stimulated the development of Circular Economy (CE) as a potential concept for enabling economic activity while minimizing environmental impact and increasing societal welfare. The concept in a nutshell enables a systemic transformation by closing technical material flows and designing ecological cycles that allow bio-based products to be returned in the natural world (GEO5, 2012; EMF, 2015). Nevertheless the implementation of CE entails a re-evaluation of societal values since almost by definition, its underlying philosophy is ‘collaboration’. Therefore this paper, focuses particularly on value creation. Aligned with the theory of multiple-values of Jonker (2012) this study explores how the concept of CE can enable the creation of environmental, social and economic values simultaneously.
More specifically the study focuses on organizational value creation and incorporates the concept of the ‘business model’ as the unit of analysis for the process of value creation. Academics and practitioners that concentrate in CE have urged the need of a new breed of circular business models (CEBMs) that would incorporate the new logic of value creation of the CE. Within this context, a variation of sources including grey literature and academic articles have provided CEBM typologies that describe several categories of CEBM archetypes and operational practices – building blocks that emerged in CE. Nevertheless, concerning these archetypes and building blocks, two aspects were uncertain. First information about these building blocks and archetypes were spread between a variety of publications and their content (i.e. archetypes and building blocks) was mixed and often overlapping. Second it was unclear what is their function and value creating logic.
This research was aimed to address these issues. The study attempted to gather data from a limited number of typologies and business documents, in order to gain an inside of how CEBM archetypes and building blocks can enable the creation of multiple values. The results provide an inventory of nine CEBM archetypes and 25 building blocks that are classified and evaluated based on their potential to generate environmental, social and economic development. Moreover the study illustrates how different configurations of building blocks can enable organizations arrange the creation of multiple values in a collective manner.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen