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The innovation game.

Fashion-as-a-Service

This article seeks to contribute to the literature on circular business model innovation in fashion retail. Our research question is which ‘model’—or combination of models—would be ideal as a business case crafting multiple value creation in small fashion retail. We focus on a qualitative, single in-depth case study—pop-up store KLEER—that we operated for a duration of three months in the Autumn of 2020. The shop served as a ‘testlab’ for action research to experiment with different business models around buying, swapping, and borrowing second-hand clothing. Adopting the Business Model Template (BMT) as a conceptual lens, we undertook a sensory ethnography which led to disclose three key strategies for circular business model innovation in fashion retail: Fashion-as-a-Service (F-a-a-S) instead of Product-as-a-Service (P-a-a-S) (1), Place-based value proposition (2) and Community as co-creator (3). Drawing on these findings, we reflect on ethnography in the context of a real pop-up store as methodological approach for business model experimentation. As a practical implication, we propose a tailor-made BMT for sustainable SME fashion retailers. Poldner K, Overdiek A, Evangelista A. Fashion-as-a-Service: Circular Business Model Innovation in Retail. Sustainability. 2022; 14(20):13273. https://doi.org/10.3390/su142013273

Heuristics in financial decision-making: the selection of SME financing by advisers in an increasingly diverse market

PurposeIn order to better understand how heuristics are used in practice, the authors explore what type of heuristics is used in the managerial domain of financial advisors to small and medium-sized enterprises (SMEs) and what influences the shaping of these heuristics. In doing so, the authors detect possible fast-and-frugal heuristics in day-to-day decision-making of independent financial advisers who help owners of SMEs to acquire capital (e.g. loans, factoring, leasing and equity).Design/methodology/approachThe authors inductively assessed the work of financial advisers of SMEs. Based on group discussions, the authors drew up a semi-structured interview-protocol with descriptive questions about how financial advisers come to a deal for their clients. The interviews of 19 professionals were analysed by relating them to the theory of fast-and-frugal heuristics.FindingsWithin their decision-making, advisers estimate the likelihood of acceptance by a few financial providers they know well in their personal network with a strong bias towards traditional banking products, although there are a large number of alternatives on the Dutch market. “Less is more” seems to be a relevant principle when defined as satisficing. Heuristics help advisers to deal with behavioural and economic limitations. Also, the authors have found that client interaction, previous working experience and the company the adviser is working for influences the shaping of the simple rules the adviser is using.Research limitations/implicationsThe study shows how difficult it is to understand the ecological rationality of a certain group of professionals and to understand the “less is more” principle. Financial advisers to SMEs use cognitive shortcuts and simple rules to advise SME-owners, based on previous experiences, but it is difficult to determine whether that leads to the same or even better solutions for them and their clients than using probability theory and financial optimisation models. Within heuristics, satisficing seems to be a dominant mechanism. Here, heuristics help advisers in recognising possibilities by searching for similarities between a current financing case and previous experiences. The data suggests that if “less is more” is defined as satisficing for one or more stakeholders involved, the principle dominates the decision making of financial advisers of SME's.Practical implicationsThe authors suggest the relevance of a behavioural approach to finance by assessing the day-to-day decisions of financial advisers of SMEs. Also, the authors suggest that financial advisers are guided by previous experiences, and they do not fully assess a wide range of options in their work but need shortcuts to fulfil the needs of their clients.Originality/valueThe study comes close to day-to-day decision-making in finance by assessing how professionals make decisions. The authors try to understand types of heuristics in relation with “ecological rationality” and the less is more principle. The authors assess financial advisers of SME-companies, a group that has gotten little research attention until now. The influence of client interaction and of the company the adviser is working for is remarkable in the shaping of the advisers' simple rules.

Heatwaves and vulnerable populations

This applied research project aims to generate a better understanding of the effects of heatwaves on vulnerable population groups in the municipality of The Hague, and suggests ways in which the municipality can help such groups to cope with these heatwaves. The research was performed as a cooperation between The Hague University of Applied Sciences (THUAS), the International Institute of Social Studies (ISS, Erasmus University Rotterdam) and the International Centre for Frugal Innovation (ICFI, Leiden-Delft-Erasmus Universities). Heatwaves constitute an important yet often overlooked part of climate change and their impacts qualify as disasters. According to the World Disasters Report 2020, the three heatwaves affecting Belgium, France, Germany, Italy, the Netherlands, Spain, Switzerland and the UK in the summer of 2019 caused 3,453 deaths.1 2020 was a new record year for the Netherlands because it was the first time that a heatwave included five days in a row during which the temperature reached 35 degrees or more. In addition, 40 degrees was measured for the first time, and periods of tropical days and nights are generally getting longer. Most importantly, this trend is accelerating faster than the climate change models are predicting.2 In addition, the COVID-19 pandemic is compounding the effect of heatwaves, as vulnerable individuals may be reluctant to seek cool spaces out of fear of infection. Already in 2006, the Netherlands ranked near the top of the global disaster index due to the number of excess deaths that could be attributed to the heatwave. In the same year, the EU published the first climate strategy in which heat is recognised as a priority. In 2008, the Netherlands developed its first national heat plan.4 The municipality of The Hague has a municipal climate adaptation strategy and has developed a draft local heat plan in the summer of 2021, which was published in February 2022 . This research was not meant to be and was not set up as an evaluation of the current heat plan, which has not yet been activated. At the level of municipalities and cities, the concept of urban resilience is key. It refers to “the capacity of individuals, communities, institutions, businesses, and systems within a city to survive, adapt, and grow no matter what kinds of chronic stresses and acute shocks they experience”. Heatwaves clearly constitute acute shocks which are rapidly developing into chronic stresses. In turn, heatwaves also exacerbate the chronic stresses that are already there, i.e. existing chronic stresses also lead to greater impact of a heatwave. In other words, there are negative interaction effects. Addressing these effects requires overcoming the silo approach to urban governance, in which different municipal departments as well as other stakeholders (such as the Red Cross, housing corporations, tenants’ associations, care organisations, entrepreneurs etc.) each address different parts of the problem, rather than doing so in an integrated and inclusive manner. The dataset for this study is archived in DANS Easy: https://doi.org/10.17026/dans-xeb-h8uk

Doing more with less

Pressure on natural resources, unsustainable production and consumption, inequality and a growing global population lie at the base of the big challenges that people face. This chapter investigates how businesses can take responsibility in dealing with these challenges by means of frugal business model innovation. The notion of ‘frugal innovation’ was first introduced in the context of emerging markets, giving non-affluent customers opportunities to consume affordable products and services suited to their needs. Business modelling with a frugal mindset opens up a path that provides significant value while minimizing the use of resources such as energy, capital and time. Business models require intentional design if they are to deliver aspired sustainability impacts. Diminish or simplify resources can be described as the means to remove or reduce features, resources, required activities and/or waste streams. Decompose can be described as the removal of resources from the commercial value proposition and replacing them with resources the user/consumer already can access or uses. This is an Accepted Manuscript of a book chapter published by Routledge/CRC Press in Circular Economy : Challenges and Opportunities for Ethical and Sustainable Business on 2021, available online: https://doi.org/10.4324/9780367816650

Design-thinking & Frugality

This full paper works towards merging ‘frugality’ and ‘design thinking’ into a simplified framework for a workshop routine as a stepping stone for SMEs in developed countries to create and capture value of frugal innovations. Innovations which are born out of the notion that we can do more with less, or for less. This framework is aimed at reaching a specific group of SMEs, in this paper called the peloton of SMEs, a large group of SMEs which generally have lower growth ambitions and growth potential in comparison to the frontrunners. This group is often overlooked by (regional) governmental innovation programmes due to a primary focus on the same industry’s frontrunners. The framework was first tested with students, discussed with experts and eventually tested with SMEs from the Agribusiness sector in the Netherlands. Frugal Elements added to the design thinking process are; (a.) a Frugal Lens (b.) Frugal Business Model Patternsfor BMI (c.) Frugal leadership development (d.) Frugal Validation of the solution (e.) Frugal Intervention (limited time, limited theory, vertical learning community, practical tools). Although the first Pilot has been a succes in terms of helping participating SMEs to create innovations, more research is necessary for the design of a final framework which is expected to contribute to the frameworks that are currently available to SMEs in frugal and sustainable business modelling.