The current linear economy focuses on a ‘take-make-use-dispose’ paradigm, prioritizing ‘volume-over-value’. Significant planning and experimentation are needed to understand how to develop new business models that are not only ‘circular’, but also desirable for people, technically feasible and financially viable. More insight is needed into the practices of business experimentation to accelerate the transition to a circular economy. We investigate the following: What types of experimentation practices do companies adopt in the transition to a circular business model? Our analysis is based on action research with over 40 organizations. Based on this, we provide an overview of business experimentation practices inside a diverse range of organizations and possible tools, approaches and lessons learned. Recommendations focus on the practices, process, environmental impact assessment, partnering and management of complexity in future tools and methods. We also propose a framework for circular business experimentation and future research directions.

Circular oriented innovation aims to address sustainability problems such as resource scarcity, pollution and climate change by (re)designing industrial products, processes, business models, and value network configurations. Although the literature identifies collaboration as crucial for circular oriented innovation—due to the complexity, risk and uncertainties involved—few tools have been developed to support it. To address this gap, we develop and test a tool that helps companies ideate to identify partners and value within circular oriented innovation. The tool integrates decision-making principles from the entrepreneurship theory of effectuation within a design thinking approach to stimulate collaborative ideation of circular propositions. We demonstrate and test the tool through six workshops, and collect data via observations, field-notes, assessment forms and user discussions. Our results show that: 1) users are receptive to visualisation and effectuation-based questions to collaboratively ideate circular propositions; 2) expert facilitation helps to maintain a circularity focus to avoid ‘business-as-usual’ ideas; and 3) differences in the maturity and scope of projects may influence the usefulness of the tool. We contribute to theory by demonstrating the integration of effectuation, design thinking, and lean experimentation approaches into a tool to advance circular oriented innovation. We contribute to practice with the tool itself that supports early and quick ideation to identify partners and perceived value. This supports companies to collaborate and advance the design of circular propositions that bring circular business model ideas closer to implementation.

The circular economy may help firms to maximize the value of their material resources and minimize the overall resource use, waste, pollution and emissions of their business activities. Implementing a circular economy program requires radical changes in product, business model and ecosystem innovation. Most research on circular oriented innovation takes a product or business model perspective. Few publications have explored how to innovate in ecosystems: how a group of loosely coupled organizations can change how they interact with each other to achieve a collective outcome. This study proposes the Circularity Deck: a card deck-based tool that can help firms to analyze, ideate and develop the circularity potential of their innovation ecosystems. The tool is based on a literature review of circular oriented innovation principles, and of practical examples that show how these principles have been applied. The principles are organized according to the intended circular strategy outcome that they pursue (i.e., narrow, slow, close, regenerate and inform material and energy flows), and the extent of the innovation perspective that is needed to operationalize a principle (i.e., product, business model, or ecosystem innovation). This review and categorization process first produced a novel analysis of the circular economy innovation landscape, using an ecosystem perspective. Second, these results served to develop the Circularity Deck, which was further developed and tested for ease of use and perceived usefulness in 12 workshops with 136 participants from 62 different organizations. The Circularity Deck provides an approach for future research and practice to integrate new principles and examples that can help firms to analyze, ideate and develop circular innovation ecosystems.

Circular business model experiments may help firms transition towards a circular economy. Little is known about how the participants of experimentation – entrepreneurs, intrapreneurs, innovation managers – develop and test their assumptions during the experimentation process to achieve more circular outcomes. Using a design-science approach, we investigate this process and develop principles to improve it. This is done during three workshops in different contexts: an innovation festival with 14 early-stage circular startups, a workshop with a health technology incumbent, and a workshop with six growth-oriented startups. We find that analyzing their available means – what they find important and prefer to happen (part of their identity), what they know (their skills and knowledge), and whom they know (their social network) – helps to understand how the participants develop and test their assumptions. We show how the mindset and awareness of the participants impact how much attention they pay to the circularity potential of their envisioned circular business models. Based on these insights, we propose a set of principles to prepare the innovation participants for experimentation, and to increase their ability to reflect on their circularity assumptions. Future research is needed to further grow our understanding of the types of principles that can guide meaningful experimentations towards a circular economy.

Next to the redesign of industrial products and processes, sustainable business model innovation is a strategic approach to integrate environmental and social concerns into the objectives and operations of organizations. One of the major challenges of this approach is that many promising business model ideas fail to reach the market, which is needed to achieve impact. In the literature, the issue is referred to as a “design-implementation gap.” This paper explores how that critical gap may be bridged. In doing so, we contribute to sustainable business model innovation theory and practice. We contribute to theory by connecting sustainable business model innovation with business experimentation and strategic design, two innovation approaches that leverage prototyping as a way to iteratively implement business ideas early on. Using a design science research methodology, we combine theoretical insights from these three literatures into a tool for setting up small-scale pilots of sustainable business models. We apply, evaluate, and improve our tool through a rigorous process by working with nine startups and one multinational company. As a result, we provide normative theory in terms of the sustainable business model innovation process, explaining that piloting a prototype forces organizations to simultaneously consider the desirability (i.e., what users want), feasibility (i.e., what is technically achievable), viability (i.e., what is financially possible), and sustainability (i.e., what is economically, socially and environmentally acceptable) of a new business model. Doing so early on is functional to bridge the design-implementation gap of sustainable business models. We contribute to practice with the tool itself, which organizations can use to translate sustainable business model ideas defined “on paper” into small-scale pilots as a first implementation step. We encourage future research building on the limitations of this exploratory study by working with a larger sample of companies through longitudinal case studies, to further explain how these pilots can be executed successfully.

A circular economy maximizes the value of material resources and minimizes greenhouse gas emissions, resource use, waste and pollution. We will posit that circularity needs to be understood as a property of a system (e.g., the mobility system of a city), rather than a property of an individual product or service (e.g., a car or a car-sharing service). Hence, there is a need for more knowledge on how to innovate towards ‘circular ecosystems’. This study proposes a set of principles for ‘circular ecosystem innovation’, based on: 1) a concise literature review to retrieve recommended principles on how to successfully innovate in ecosystems, 2) a mobility case of circular ecosystem innovation to investigate how relevant and useful these principles are for circular oriented innovation. The case data include 20 interviews, workshop data and internal background documents. The identified principles can be categorized in three groups: 1) collaboration (i.e., how firms can interact with other organizations in their ecosystem to innovate towards circularity), 2) experimentation (i.e., how firms can organize a structured trial-and-error process to implement greater circularity) and 3) platformization (i.e., how firms can organize social and economic interactions via online platforms to achieve greater circularity). Future research may focus on identifying opportunities and barriers to applying these principles in different contexts than in the one that is investigated in the present study.

Online platforms have a growing influence on how people interact with the physical world. They organise data streams, economic interactions and social exchanges of their users. Competitive dynamics in this emerging ‘platform society’ revolve around the ability to attract users to a platform, and to collect and analyse data from their interactions to achieve network effects. This chapter is about the roles of online platforms in enabling a more sustainable and circular economy. It identifies and describes three potential roles: they can enable people and organisations to (1) market, (2) operate and (3) co-create products, components and material. The identified roles provide a playground for firms to experiment with online platforms to advance their digital transition towards a circular economy.