*1.1. The Issue: Progress in Sustainable Product Innovation, and Circular Business Models*

There is a general concern about the increasing concentration of greenhouse gases in our atmosphere, materials scarcity, degradation of biodiversity, the plastic soup in the oceans, and many other pollutants like fine dust and NOx. As politicians set stricter targets (Kyoto protocol, Paris Agreement), and citizens become more and more aware of the severe consequences, business people realise that they should innovate their products and services. New business proposals must have a double objective: the new product must have a higher customer value, and at the same time a lower eco-burden. The higher customer value is needed to make the introduction of the product at the market a success, without the need for state subsidies.

The fact is that sustainable product innovation and introduction of circular business models is not easy. Although circular business models became a hype in Western Europe after the introduction of the Cradle-to-Cradle philosophy [1], and the business aspects of it [2,3], real successful implementations are rather limited [4–7] for many commercial business reasons. In addition, the environmental gains of circular business models are often much lower than it is suggested, especially with regard to the shift to services [8]. White et al. [9] (p. 1) writes about services: "*It is clear that the simplest and most optimistic*

*view—a service economy is inherently clean economy—is insu*ffi*cient and incorrect. Instead, the service economy is better characterized as a value-added layer resting upon a material-intensive, industrial economy*". Tukker [10] has drawn a similar conclusion on Product Service Systems (PSS) after the comprehensive SusProNet study: PSS did not bring the enormous change that was hoped for. PSS might *support* new business models, but are not the solution as such. White et al. conclude that, even though growth in services might be less environmentally damaging than growth in manufacturing: "*If services are to produce a greener economy, it will be because they change the ways in which products are made, used and disposed of—or because services, in some cases, supplant products altogether*" [8] (p. 1). Therefore, one of the crucial aspects of the innovative design of sustainable products or services is that people will buy it and use it (instead of unsustainable alternatives). That is why we focus in this paper on value creation in the fuzzy front end of the design process, since that is the moment where the real sustainable innovation can take place. It is the moment for designers to contemplate radically different product or service systems, e.g., identifying 'functional result' alternatives [9]. In user-centred design, value creation for the customer is the main aim [11]. In Ecodesign, sustainability is the main aim [12]. However, in sustainable product innovation we need a combination of both [13], where value creation and sustainability go hand in hand, and where the classical contradiction between ecology and economy is being reconciled in a clever way. Only LCA (Life Cycle Assessment) can reveal to what extent a new design of a product chain is better in terms of sustainability. A practical issue in design is that the classical LCA method is too laborious and complex to be doable in the early design stages. The result is that, especially in the early design stages, the aspect of sustainability is only dealt with on a qualitative 'gut feeling' basis, often leading to wrong conclusions. The LCA is then done (if at all) when the detailed design is ready. At that stage, however, it is too late for drastic changes, resulting in a product design that is far from the optimum. In eco-efficient value creation, this issue has been solved in a practical way by tools for 'Fast Track LCA', enabling the assessment of the environmental impacts of multiple design concepts in a quick way.
