Over the last decade, the concept of a circular economy, an industrial economy that is restorative or regenerative by intention and design, has gained increased attention of policy makers, industry and academics. Recently the number of innovation projects, set up by local governments, communities, non-governmental organizations and businesses, to experiment with new sustainable technologies for a circular city, has increased substantially. This paper aims to explore how in this emerging field different stakeholders collaboratively create value and develop a viable sustainable business model. We do so by building on business model literature and literature on innovation networks and combining these with insights on value outcomes and learning from strategic management. For this study we take a qualitative research approach, building on four innovation projects for a circular city, characterized by collaboration of a wide variety of stakeholders, each being initiated and coordinated by a different stakeholder type. The findings show an emphasis on technical and organizational learning, influencing expected and unexpected value outcomes. The main contribution of this paper is a conceptual framework to analyse value creation and capture within the context of open partnerships through different learning types. Learning proves to be an effective mechanism in innovation networks to create and capture more economic, environmental and social value then initially aimed for.
The circular economy (CE) is heralded as reducing material use and emissions while providing more jobs and growth. We explored this narrative in a series of expert workshops, basing ourselves on theories, methods and findings from science fields such as global environmental input-output analysis, business modelling, industrial organisation, innovation sciences and transition studies. Our findings indicate that this dominant narrative suffers from at least three inconvenient truths. First, CE can lead to loss of GDP. Each doubling of product lifetimes will halve the related industrial production, while the required design changes may cost little. Second, the same mechanism can create losses of production jobs. This may not be compensated by extra maintenance, repair or refurbishing activities. Finally, ‘Product-as-a-Service’ business models supported by platform technologies are crucial for a CE transition. But by transforming consumers from owners to users, they lose independence and do not share in any value enhancement of assets (e.g., houses). As shown by Uber and AirBNB, platforms tend to concentrate power and value with providers, dramatically affecting the distribution of wealth. The real win-win potential of circularity is that the same societal welfare may be achieved with less production and fewer working hours, resulting in more leisure time. But it is perfectly possible that powerful platform providers capture most added value and channel that to their elite owners, at the expense of the purchasing power of ordinary people working fewer hours. Similar undesirable distributional effects may occur at the global scale: the service economies in the Global North may benefit from the additional repair and refurbishment activities, while economies in the Global South that are more oriented towards primary production will see these activities shrink. It is essential that CE research comes to grips with such effects. Furthermore, governance approaches mitigating unfair distribution of power and value are hence essential for a successful circularity transition.
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Both research and practice acknowledge that an increasing number of business models are realized by multiple organizations in innovation ecosystems. Little research addresses how organizations develop these business models jointly over time and balance the tensions that occur from the divergent goals and interests of each actor. We propose that the concept of value valuation may be helpful in understanding this process. Value valuation is a balancing process that takes place between actors in an innovation ecosystem when collaborating around a business model for sustainability, making sure that the benefits of ecosystem membership outweighs its costs, leading to continuing support of the initiative. Based on four smart city projects for a circular economy we find that value is valuated along two dimensions: economic, environmental and social value; and mutual and individual value. Value valuation takes place in iterative cycles and is characterized by a number of mechanisms, including action-based experimenting. These findings open up a research agenda to study the dynamics of ecosystem-based business model development.
Due to the existing pressure for a more rational use of the water, many public managers and industries have to re-think/adapt their processes towards a more circular approach. Such pressure is even more critical in the Rio Doce region, Minas Gerais, due to the large environmental accident occurred in 2015. Cenibra (pulp mill) is an example of such industries due to the fact that it is situated in the river basin and that it has a water demanding process. The current proposal is meant as an academic and engineering study to propose possible solutions to decrease the total water consumption of the mill and, thus, decrease the total stress on the Rio Doce basin. The work will be divided in three working packages, namely: (i) evaluation (modelling) of the mill process and water balance (ii) application and operation of a pilot scale wastewater treatment plant (iii) analysis of the impacts caused by the improvement of the process. The second work package will also be conducted (in parallel) with a lab scale setup in The Netherlands to allow fast adjustments and broaden evaluation of the setup/process performance. The actions will focus on reducing the mill total water consumption in 20%.
In 2050 streven we naar een 100% circulaire economie. Maar wat betekent dat voor organisaties? Dit project ontwikkelt een meetinstrument om circulaire prestaties inzichtelijk en vergelijkbaar te maken. Met een langdurig onderzoek balanceren we continu tussen wetenschappelijke grondigheid en praktische toepasbaarheid, om organisaties gericht te ondersteunen op hun circulaire reis.
Collaborative networks for sustainability are emerging rapidly to address urgent societal challenges. By bringing together organizations with different knowledge bases, resources and capabilities, collaborative networks enhance information exchange, knowledge sharing and learning opportunities to address these complex problems that cannot be solved by organizations individually. Nowhere is this more apparent than in the apparel sector, where examples of collaborative networks for sustainability are plenty, for example Sustainable Apparel Coalition, Zero Discharge Hazardous Chemicals, and the Fair Wear Foundation. Companies like C&A and H&M but also smaller players join these networks to take their social responsibility. Collaborative networks are unlike traditional forms of organizations; they are loosely structured collectives of different, often competing organizations, with dynamic membership and usually lack legal status. However, they do not emerge or organize on their own; they need network orchestrators who manage the network in terms of activities and participants. But network orchestrators face many challenges. They have to balance the interests of diverse companies and deal with tensions that often arise between them, like sharing their innovative knowledge. Orchestrators also have to “sell” the value of the network to potential new participants, who make decisions about which networks to join based on the benefits they expect to get from participating. Network orchestrators often do not know the best way to maintain engagement, commitment and enthusiasm or how to ensure knowledge and resource sharing, especially when competitors are involved. Furthermore, collaborative networks receive funding from grants or subsidies, creating financial uncertainty about its continuity. Raising financing from the private sector is difficult and network orchestrators compete more and more for resources. When networks dissolve or dysfunction (due to a lack of value creation and capture for participants, a lack of financing or a non-functioning business model), the collective value that has been created and accrued over time may be lost. This is problematic given that industrial transformations towards sustainability take many years and durable organizational forms are required to ensure ongoing support for this change. Network orchestration is a new profession. There are no guidelines, handbooks or good practices for how to perform this role, nor is there professional education or a professional association that represents network orchestrators. This is urgently needed as network orchestrators struggle with their role in governing networks so that they create and capture value for participants and ultimately ensure better network performance and survival. This project aims to foster the professionalization of the network orchestrator role by: (a) generating knowledge, developing and testing collaborative network governance models, facilitation tools and collaborative business modeling tools to enable network orchestrators to improve the performance of collaborative networks in terms of collective value creation (network level) and private value capture (network participant level) (b) organizing platform activities for network orchestrators to exchange ideas, best practices and learn from each other, thereby facilitating the formation of a professional identity, standards and community of network orchestrators.
