Why Do Companies Pursue Collaborative Circular Oriented Innovation?
Abstract
:1. Introduction
2. Literature Background
2.1. What Is Circular Oriented Innovation?
2.2. How Does Circular Oriented Innovation Fit within Sustainable Oriented Innovation?
2.3. Towards Understanding the Motives for Collaboration in Circular Oriented Innovation
2.4. Drivers and Barriers for Collaborative COI
3. Research Design
4. Results
4.1. Case Findings: Insights into Collaborative Circular Oriented Innovation
4.1.1. Collaborative COI Intensity and Excitement
4.1.2. Basis for Collaboration, Partner Selection and Balancing Informal Processes
4.1.3. Systemic, Connected and Collaborative Innovation
4.2. Collaborative Circular Oriented Innovation Drivers and Barriers
5. Discussion
5.1. Personal Motives of Actors to Collaborate
Capabilities of Actors to Build and Support Collaboration
5.2. Drivers and Barriers for CE Vision and the COI Strategy
5.2.1. Drivers and Barriers for COI the Increasing Focus upon Resources
5.2.2. Drivers and Barriers for COI Finding a Suitable Context to Test, Experiment and Pilot at Scale
5.2.3. Drivers and Barriers for COI to Operationalise the Circular Business Model
5.3. Proposed Conditions and Motives for Collaborative Circular Oriented Innovation
6. Conclusions
Author Contributions
Funding
Acknowledgments
Conflicts of Interest
Appendix A. Interview Topics and Sample Questions
Interview Topics | Sample Questions |
CE introduction | What does the term circular economy mean to you? |
CE Collaborative Innovation | Who or which organisation(s) were involved within the initial collaboration? Did this evolve over time? Why and how did this happen? How long were collaborative activities undertaken, and why did they develop? Who or which organisation did you collaborate most closely with to deliver the circular strategy? Please describe why and how you engaged with them. How would you describe the benefits/challenges you (and/or your organisation) experienced within the collaborative process? What were the results that you (and/or your organisation) experienced through the collaborative processes? Can you discuss any specific differences experienced between the collaborative processes when pursing circular strategies in comparison with linear/traditional? If in the future (15–20 years) CE is a more standard operation, do you think that collaboration between companies will be different at this point? |
Circular Strategies and Vision | What impact has the circular vision had upon your: role or department and organisation? Were there any specific skills, capabilities or knowledge missing to complete the required work, and if so, how were these overcome? Were there differences experienced compared to non-circular strategy-led projects? |
Appendix B. Iterative Codes Developed, and Explanation
Initial Code | Iterative Codes | Code Explanation |
Circular Economy Strategies | Motives | Specific intrinsic and extrinsic (personal/organisational) reasons to explore or act |
Vision/Strategy | What the company or individual anticipates or plans, and how they respond to CE recovery strategies | |
CE vs. Linear | Direct differences that are discussed in relation to motives, drivers/barriers and actions | |
Drivers and Barriers | Hard/soft—in relation to CE concept, vision or strategy and motives | |
Collaboration | Vision | Specific role of vision within the collaborative process discussed |
Motives | Specific intrinsic and extrinsic (personal/organisational) reasons to explore or act | |
Trust | Commitment, credibility or trust between collaborators is discussed | |
Partner selection | Process, reasons and actions for partner selection are discussed | |
Formal vs. Informal Project Management | Discussion of different ways of project/relationship management to support and enable collaboration | |
Collaboration vs. Competition | Instances of tensions discussed: collaborating with competitors, pre-competitive/competition or commercial gain | |
Drivers and Barriers | Hard/soft—in relation to collaborative vision, motives, and strategy | |
Circular Oriented Innovation | Business Model | Discussion of experimentation with or development of value proposition, creation, delivery or capture |
Network/Supply chain | Discussion of network or supply chain actions, skills or capabilities | |
Design | Explicit design changes, methods or actions are mentioned | |
Drivers and Barriers | Hard/soft—in relation to innovation actions or strategy |
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Product Focus | New Market Opportunities | Systemic Innovation | |
---|---|---|---|
Sustainable Oriented Innovation Approach | Operational optimization: Eco-design and efficiency | Organisational transformation: New market/sustainable opportunities | System Building: For positive societal change |
Objective of Innovation | Compliance & efficiency to do better | Novel products, services and business models to do good | Novel products, services and business models that are impossible to do alone |
Outcome of Innovation | Reduce harm | Create shared social, environmental and economic value | Derive new and shared net-positive value configurations to drive societal change |
Innovations relation to firm’s strategy | Incremental improvements to business as usual | Shift in the firm’s purpose—to do good and to create wider benefits | Extension of firm’s purpose—to be a part of society and to drive institutional change |
Design Approaches | Product level—e.g., Eco, emotionally durable or base of pyramid product design | Product-service, servitisation or closed-loop systems | Systemic design for innovation and transition, Circular product design and business models |
Organisational learning | Mobilising existing innovation capabilities—mainly firm level | Importance of leadership to engage value chain and stakeholder network to gain and generate knowledge | Novel (cross/multi-sector) collaborations generating dialogues, foresight and experimentation |
Dimension | Explanation | |
---|---|---|
Hard | Technical | Technology, technical knowledge and skills, data, supply network operations, infrastructure, material and product design |
Market | Business model, contracting and accounting processes, economic and financial assessment | |
Soft | Social/Cultural | Organisational, individual and societal—mindsets, ideas, customs, values, behaviours or norms |
Institutional/Regulatory | Legislative, taxation, regulations, policies |
Drivers | Ref. | Relates to | ||
---|---|---|---|---|
1 | 2 | |||
Hard | ||||
Technical | Increased availability of information and communication technology (ICT) facilitating resource optimisation for CE strategies | [50] | √ | |
Development of platforms for sharing/reusing solutions for products, materials and data | [50] | √ | √ | |
CE enthusiasm and pilots generating the desire to experiment, generating proof of concepts at scale | [55] | √ | √ | |
Markets | Anticipated cost reduction and financial profitability | [34,50,54,66,68] | √ | |
Material criticality. Increasing the desire for stable, resilient and sustainable purchasing | [34,50,54,66] | √ | √ | |
Recognition of awards or favourable treatment in government tenders linked to sustainability | [54] | √ | ||
Soft | ||||
Social/ Cultural | Increasing awareness and literacy from the demand side (customers). Brand reputation gains, and protecting the future right to operate | [34,50,54,69] | √ | |
Desire to be CE front-runners, successfully installing the environment and CE culture | [54,55] | √ | ||
CE front-runners joining like-minded networks for CE development | [54] | √ | ||
Institutional/ Regulatory | Awareness of new standards, and increased environmental and waste legislation and regulations | [34,50,66] | √ |
Barriers | Ref. | Relates to | ||
---|---|---|---|---|
1 | 2 | |||
Hard | ||||
Technical | Lack of CE technical knowledge and skills, e.g., product design | [50,54,55,67,68,69] | √ | |
Position within the value chain, coordination, contracting and existing distribution channel arrangements, creating lock-in | [34,54,55,66,67,69] | √ | √ | |
Take back/reverse logistics—quality, access and attractiveness of recovered products and materials. A lack of clear responsibility or ownership across the value chain | [34,55,66,67,69] | √ | √ | |
Lack of data reducing the assessment of CE impacts, decision making and the validation of environmental impact | [34,54,55] | √ | ||
Complexity to integrate technical innovations across the product, supply chain and BMs, creating technology gaps | [34,50,69] | √ | √ | |
Current limited proof for CE technology and business models | [55,66] | √ | ||
Markets | Lack of resources or access to capital for high up-front costs and administrative burdens, creating lock-in or a lack of ability to engage with CE | [34,50,55,66,68,69] | √ | √ |
Uncertain or misaligned returns and/or incentives for investments into CE across the value chain—reducing the willingness to change or collaborate | [34,50,55,66,67,69] | √ | ||
Financial assessment, accounting and return on investment (ROI) based on linear concepts of rapid returns—Circular business models not seen as profitable or generating split returns | [34,50,54,55,69] | √ | √ | |
CE contracting to share value across actors | [34,55,66] | √ | ||
Low virgin material or new products prices, creating unfair competition | [55,67] | √ | ||
Soft | ||||
Social/Cultural | Limited support/slow acceptance from the demand side (customers) for CBMs; e.g., the product as a service, and the supply side (supply chain), slow acceptance of lease agreements | [50,54,55,67,68,69] | √ | |
Company culture and a mindset for sustainability or CE value within the company and value chain | [34,54,55,68] | √ | √ | |
Risk aversion, inertia or conservatism (internally/across the supply chain). Preference for incremental over radical experimentation and innovation | [34,55,69] | √ | ||
Relationship power dynamics and costs, based upon the position within the value chain | [34,67] | √ | ||
Institutional/ Regulatory | Legislation, regulations and taxes favouring linear processes | [34,50,54,55,66,67,69] | √ | |
Lack of vision and consensus from governments for CE | [55,67] | √ | ||
Limited circular procurement | [55] | √ |
Case | Length of Interview | Interviewee Position | Industry/Sector | Product Category/Type | No. of Employees |
---|---|---|---|---|---|
A | 1 h 25 min | CSR Consultant, CO2 & Circularity | Energy | Infrastructure | >5500 |
B | 1 h | Director of Sustainability | Electronics | Household, consumer, healthcare and lighting products | >70,000 |
1 h | Senior Manager Sustainability | ||||
C | 1 h 15 min | Circular Economy Manager—Plastic Cycle | FMCG | Food, drink and health products | >100,000 |
D | 1 h | Lead—Global Centre Circular Economy | ICT | Hardware, software and consulting services | >350,000 |
E | 1 h | Supply Chain Manager | Furniture | Beds, mattresses and bedroom accessories | >200 |
F | 1 h 10 min | Director of EMEA Regulations & Standards, Environmental Affairs and Producer Responsibility | ICT | ICT hardware and IT services | >100,000 |
G | 1 h 20 min | Co-founder, Resource Efficiency Manager | Electronics | Smartphone | >75 |
H | 1 h | Circular Economy Specialist and Strategic Consultant | Real Estate | Consulting and development services for sustainable construction | >20 |
I | 1 h 30 min | Circular Economy Manager | Furniture | Office and workspace furniture | >150 |
J | 1 h 45 min | Director of Sustainability | Flooring | Carpet | >350 |
K | 1 h 30 min | Sustainability Marketer | Chemicals | Health, nutrition and materials (plastics and resins) | >21,000 |
Example Code | Illustrative Quotes from Cases | Explanation of Why the Quote Illustrates the Code | |
---|---|---|---|
Circular Economy Strategies | Motives | B “It is very important to find people who have internal drivers. Can be business driven or sustainability driven. Find people who have an intrinsic belief with what they want to do. Find your CE champions.” | The need to understand people’s internal motivations to act towards CE. |
E “Apart from being profitable and delivering value to the business … I am here, to be able to make a difference.” | Highlights both the personal and organisational reasons to explore CE | ||
G “It is also really important and linked to the motivation of individuals and how much they are willing to push certain objectives. | Highlights the process of engaging with a person’s motives to drive CE. Represents how the intrinsic and extrinsic are important | ||
K “It is sustainability in general but CE is developing in such a way that, I personally find it fascinating, that if you are just supplying the product you are have only done half of your job.” | Presents the personal engagement with CE due to interest/internal excitement to learn and a sense of responsibility | ||
H “So he (CEO) came to the realisation that if you are building tomorrow’s world, as a building/project developer, it should be better than the one we are currently in. Whereby you need to add more than you take out of the system. Otherwise your life has a negative result. If there is a purpose to existence it might just be that you do things better than people did before you or you leave the world with more in it than you took out. You add value.” | Presenting personal normative views of responsibility to pursue CE. This also shows how such normative values are involved within the development of the CE vision |
Drivers | Case | Relates to | ||
---|---|---|---|---|
1 | 2 | |||
Hard | ||||
Technical | Increasing proofs of concept, stimulating others actions to test assumptions, experiment and pilot at scale | A/B/D/E/F/I/J | √ | |
Accomplishing product improvements generated by CE innovation | A/B/D/E/I/K | √ | ||
Increasing material specifications, the exploration of new or altered functional needs for materials within CE innovation | B/C/F/G/H | √ | ||
Cross-sectoral or common societal challenges, e.g., ocean plastic | C/F/J | √ | √ | |
CE expertise outside core operations, e.g., CE recovery strategies or reverse logistics | C/D/G | √ | ||
Market | Innovation potential and the development of CE strategic capabilities and the knowledge for CBM | All | √ | |
Anticipation of financial return, new business opportunities and efficiency savings within circular strategies | All | √ | ||
Access to new market: sales channels, customers (B2B + B2C) or to forward or reverse integrate product offerings (B2B) | E/G/I/J/K | √ | ||
Pursuit of CE-oriented tendering or procurement processes | A/I | √ | ||
Soft | ||||
Social/Cultural | Enthusiasm and desire to be a CE front-runner to develop new knowledge, attract talent and to realise personal and company motivations | All | √ | |
Growing sense of urgency and need for networked innovation to develop CE/sustainable transitions: linked to increasingly internal sustainable decision models and processes | All | √ | √ | |
Search for and/or creation of credibility and acceptance via CE networks: Aim to find active companies pursuing CE to collaborate with | B/D/E/F/J/H/I | √ | ||
Increasing demands from customers (B2B) for sustainable products and experience | E/I | √ | ||
Institutional/ Regulatory | Increasing lobbying for CE legislation | A/C/E/H/J | √ | |
Need for/awareness of creation and the acceptance of cross-industry standards | D/H/K | √ |
Barriers | Case | Relates to | ||
---|---|---|---|---|
1 | 2 | |||
Hard | ||||
Technical | Lack of technical knowledge/skills for CE: Current linear dynamics, training and skills stopping CE development | A/B/C/D/E/F/H/I/J | √ | |
Legacy of linear products/material challenge identification for secondary materials | A/B/D/E/F/H/I/J | √ | √ | |
Sourcing materials: quantity, quality, fairly/environmentally produced for both virgin or recovered | A/B/C/F/G/H | √ | ||
Complexity to integrate CE knowledge | A/H/I/J | √ | ||
Sectorial differences in the specification and the variation of material requirements: impacting selection and reuse options | B/F/H/J | √ | ||
Position and power within the regional vs global supply network, and pre-existing contracts and distribution, creating lock-in | F/G/K | √ | ||
Alignment of skills, capabilities and resources to collaborate effectively | A/D/H | √ | ||
Market | Financial assessment and accounting based on linear concepts of rapid returns vs longer-term returns—CBMs challenged by short-term profitability or generating split incentives | A/B/C/D/E/H/J/K | √ | √ |
Contracting for collaborative actions to align incentives, risk vs reward across the value chain | A/B/D/E/G/H/J/K | √ | ||
Balance formal vs informal. Flexibility and adaptability within contracting and project management procedures | A/B/G/H/J | √ | ||
Reverse logistics costs for closed loops + low virgin material and product prices, creating unfair competition | B/C/F/J | √ | ||
Higher administrative costs and investment required. e.g., time, money and resources to collaborate | A/B/H/I | √ | ||
Soft | ||||
Social/Cultural | Balancing company culture, mindset and sustainable value internally or externally, for opening up to create the right environment for collaboration. | A/B/E/F/H/J/K | √ | |
Trust and transparency of information flows, motivations and goals to collaborate freely with partners—especially pre-competitive vs competitive collaboration with regards to knowledge sharing | A/B/F/G/H/J | √ | ||
Finding and selecting partners—how, where and who to start collaborations with that are feasible and scalable | A/D/E/H/I/J | √ | ||
Demand side (B2C) limited perception, education, the desire or access to information for sustainable or circular BMs | B/C/H/J/K | √ | ||
Lack of desire, fear of change or blocking activities by supply chain members to maintain the linear status quo or the preference for incremental changes | A/C/H/J/K | √ | ||
Lack of a common language across sectors/life cycle stages | A/B/D/E/I | √ | ||
Generating sufficient commitment to CE collaborative innovation | B/H/J/K | √ | ||
Common/shared understanding for CE vision across collaborating partners and internal motivations | A/B/J | √ | ||
Institutional/ Regulatory | Lack of certifications, standards, taxes regulation across life-cycle stages | A/D/H/J | √ |
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Brown, P.; Bocken, N.; Balkenende, R. Why Do Companies Pursue Collaborative Circular Oriented Innovation? Sustainability 2019, 11, 635. https://doi.org/10.3390/su11030635
Brown P, Bocken N, Balkenende R. Why Do Companies Pursue Collaborative Circular Oriented Innovation? Sustainability. 2019; 11(3):635. https://doi.org/10.3390/su11030635
Chicago/Turabian StyleBrown, Phil, Nancy Bocken, and Ruud Balkenende. 2019. "Why Do Companies Pursue Collaborative Circular Oriented Innovation?" Sustainability 11, no. 3: 635. https://doi.org/10.3390/su11030635