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Circular Economy business model Innovation process



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Circular Economy business model Innovation process

  1. 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
  2. 2. 205/10/2017 2 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?
  3. 3. 305/10/2017 3 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.
  4. 4. 405/10/2017 4 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.
  5. 5. 505/10/2017 5 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.
  6. 6. 605/10/2017 6 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.
  7. 7. 7 Business model innovation process in AARRE-project
  8. 8. 805/10/2017 8 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
  9. 9. 905/10/2017 9 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)
  10. 10. 1005/10/2017 10 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.
  11. 11. Thank you! Aarre-project @AarreResearch