Circular Economy business model Innovation process
1. VTT TECHNICAL RESEARCH CENTRE OF FINLAND LTD
Circular Economy business model
innovation process – case study
Maria Antikainen, Anna Aminoff, Outi Kettunen and
Henna Sundqvist-Andberg
VTT Technical Research Center of Finland
Harri Paloheimo
Coreorient
KES-SDM 2017
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The aim of this study is to increase our understanding of the circular
business model innovation process.
Our research questions are:
1. What kind of value can be obtained by different methods in the
innovation process?
2. What are the challenges related to each method and how is it possible
to overcome those challenges?
As an outcome we offer a concept of circular business model innovation
process, including detailed information about the steps, tools,
perspectives and participants.
What?
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Why?
Companies need to find new collaboration partners
and reconsider the value offered for stakeholders.
To solve that, we need new innovation tools and processes to guide
businesses in their innovation journey resulting in novel business models in
a circular economy.
Our main focus is to explore what kind of mixed methods support
value creation in circular business model innovation and what
kind of challenges there are related to each method.
The paper highlights the importance of involving different
perspectives, stakeholders and using mixed methods during the
innovation process.
Companies need to consider how to close material loops,
reduce the resources needed and think more about how
materials and products are kept in the loop.
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Research needs on circular business model innovation
§ New literature streams have emerged on sustainable business models (SBM) and
sustainable business model innovation (SBMI). These include a consideration of
other forms of value for a broader range of stakeholders
§ Currently, many companies are dealing with the same question: How can their
business models be transformed into a circular form?
§ The adoption of CE-based business models has been rather slow.
§ Usually no business can be alone circular - circular business models are part of the
larger network that together closes the loop.
§ In this context open innovation and co-creation are essential .
§ Instead of concentrating on tools, it is also important to look at the whole process
including various steps, different perspectives, tools, methods and multiple
participants.
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A framework for innovation process
§A framework for sustainable circular business model innovation
(CBMI) (Antikainen & Valkokari 2017), having a holistic approach
including:
1. recognizing trends and drivers at the ecosystem level;
2. understanding the value to partners and stakeholders within a business;
3. evaluating the impact of sustainability and circularity.
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Case study
§ In our AARRE/TREASURE-project, exploring user-driven
circular economy business models, there is close
collaboration with multiple Finnish companies.
§ Our data for this study is derived from three companies.
1. A recycling and waste management company, interested in
focusing on consumer markets with their innovative products
made from recycled materials.
2. A startup focusing on digitalization of recycling centres.
3. A startup having multiple ideas related to crowdsourcing and
novel consumer services.
§ Researchers have participated and facilitated different
phases of the case companies’ innovation process from
ideation to implementation and adding also different tools
from business model innovation to foresight.
§ All the phases were not conducted with each company.
§ During the processes different stakeholder groups were
involved in the innovation process.
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More about the 5 steps
Steps Activities in the AARRE project
1. Understanding the future business
environment and its impact to the business
model innovation
• Meetings with company key persons, using
the framework for sustainable circular
business model innovation by Antikainen&
Valkokari
2. Scenario building exercise to understand
alternative CE futures.
• Literature review
• Workshops with companies and researchers
3. Understanding the future customers through
consumer discussions and online discussions.
• A consumer panel
• Online discussions using an online tool
Owela
4. Business scenario workshops to seek new
business models.
• The aim was to endorse proactive thinking,
and move the workshop participants beyond
the current situation and to facilitate new
business opportunity identification
• Two half day workshops in two companies
with their key persons
5. The implementation of the business idea
through rapid experiment or more complex
pilot.
• A rapid experiment for tool renting from an
intelligent container in city centre
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Conclusions: Challenges for the 5 steps of circular BMI
§ Challenges:
1. Lack of time and resources
2. Difficulties to link the scenario process with the short term business
model development which appeared to be more relevant for the case
companies
3. Integrating stakeholders better to the whole process.
4. Designing and implementing the pilot: lack of tools and including all
the perspectives (entrepreneur and researchers)
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Contribution
§ The paper creates understanding on circular business model innovation process
based on real cases.
§ Our main aim is to take a holistic viewpoint on the process. However, our knowledge and
insights are added with the short description of the used tools and methods in each step.
§ Contribution is also made by introducing our ideas on conducting rapid experiments and
pilots; a rather neglected area in business innovation literature.
§ The process is based on the idea of using co-creation and open innovation actively in
multiple stakeholder groups. As such, the study contributes to open innovation, co-
creation and business model innovation literature. The study also contributes to the
growing literature related to circular business and sustainable business models.
§ a strong practical orientation as it describes and analyses the innovation processes of
three different case companies and the gained benefits and challenges of the used
innovation process model.
§ Our next aim is to continue by providing more insightful data focused on each step
presented in this study.
