Presentation of the results of the pilot study Business Models for the Circular Economy by Niels Faber Royal Auping nov 8 2016

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WELCOME
PRESENTATION RESULTS PILOT STUDY BUSINESS MODELS
FOR THE CIRCULAR ECONOMY.
08 NOVEMBER 2016, ROYAL AUPING (DEVENTER)
THE BMCE TEAM
NIELS FABER (HANZE UAS & RADBOUD UNIVERSITY)
JAN JONKER (INITIATIVE & RADBOUD UNIVERSITY)
IVO KOTHMAN (SAXION UAS & RADBOUD UNIVERSITY)
HANS STEGEMAN (CHIEF ECONOMIST RABOBANK)
TARA JANSSEN (RABOBANK)
... AND IN ADDITION PEOPLE THAT PRACTICE METHODOLOGY, MARKETING, PUBLICITY,
WEBSITE DESIGN, EDITING, ADMINISTRATION …
SPONSORED BY

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THE CIRCULAR ECONOMY IS ...
• Not a form of accelerated recycling 3.0;
• Implies that the production of goods will decrease;
• Demands revaluation of resources, semi-finished goods, and finished
goods;
• Creates new employment in organising and populating different forms
of high and low value cycles;
• Only flourishes as an organisational assignment between organisations
and other parties (companies, citizens, and government);
• Needs to be shaped in a new generation of business, organisation and
revenue models.
PRACTICE BECOMING
Much interest, a lot of talk;
Practice often relabelled eco-efficiency (WBCSD, 1994)
Core concepts: reuse, reduce, and recycle
Trying to be circular in a linear context
Search for real CE organisation models

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OUTLINE PILOT STUDY
Focus CE of companies in East-Netherlands
Spring 2016
Provinces Gelderland and Overijssel
Response: N = 543, N-valid = 250,
Interviews N = 39
Revealing cases N = 8
REVEALING CASES
ROOF2ROOF (construction)
VITENS (utilities)
FOENIX (recycling)
BENTHEM TRADE (trade)
EEKO GROUP (recycling)
ROELOFS (infrastructure)
BMA ERGONOMICS (office supplies)
DIJKHUIS AANNEMERSBEDRIJF (construction)

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BUILDING BLOCKS
1. ORGANISING CYCLES
2. REVENUE MODEL
3. VALUE CREATION
4. STRATEGY
1. ORGANISING CYCLES

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ELEMENTS OF THE CE
9.4%
10.9%
12.7%
19.3%
20.6%
0% 5% 10% 15% 20% 25%
Conscious about other business models
New revenue opportunities
Saving energy
Cautiously dealing with the
environment
Reduction consumption/use resources
9.4%
13.1%
13.4%
16.8%
17.6%
0% 5% 10% 15% 20%
re-design: redesign products for reuse
re-create: create sustainable solutions
for products and/or services
re-cycle: get resources and products
into use again
re-use: focus on the reuse of resources,
heat, etc.
re-duce: focus on the reduction of
waste, materials, etc.
FOCUS ACTIVITIES

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ORGANISING CYCLES
• FACT: ESSENCE OF CE IS RESOURCES AND ENVIRONMENTAL AWARENESS
• SIGNIFICANT: CYCLES INDEED PLAY AN IMPORTANT ROLE IN THE CE
• FUTURE: ORGANISE CYCLES FIRST WITHIN AND THEN OUTSIDE THE ORGANISATION
2. REVENUE MODELS

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REVENUE FROM CE ACTIVITIES
8.6%
10.9%
14.7%
15.9%
22.9%
0% 5% 10% 15% 20% 25%
Pay for use
Higher scrap value
Higher benefits from resources
Longer lifespan
Pay for product or service
SHARE CE IN TURNOVER: NOW AND IN 10 YEARS
45.5%
16.8%
8.2%
29.5%
15.6%
28.4%
14.2%
41.7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0 to 10 % 11 to 25 % 26 to 50 % over 50 %
Now
After 10 years

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REVENUE MODELS
• FACT: CLASSICAL SALES MOST IMPORTANT
• SIGNIFICANT: HIGHER BENEFITS FROM RESOURCES AND HIGHER SCRAP VALUE
• FUTURE: HIGH EXPECTATIONS FOR CE AND NEW REVENUE MODELS
3. VALUE CREATION

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WHAT VALUES ARE CREATED?
Other, namely ...
3.8%
Social
values
28.1%
Financial
values
30%
Ecological
values
38%
WITH WHOM IS VALUE CREATED?
11.6%
17.4%
17.7%
21.4%
25.5%
0% 5% 10% 15% 20% 25% 30%
Consultants
Knowledge institutes
Governments
Suppliers
Buyers/customers

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VALUE CREATION
• FACT: 3 P’S ALL MATTER FOR THE CE
• SIGNIFICANT: COOPERATION ESSENTIAL PART OF THE CE
• FUTURE: MORE INTEREST FOR OTHER VALUES AND MORE COOPERATION
4. STRATEGY

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WHY CE?
12.1%
13.7%
16.4%
17.6%
23.9%
0% 5% 10% 15% 20% 25% 30%
We see the financial advantage
We want to stay ahead of competition
The market changed into the direction of
the CE
Awareness of other business models
As a company we want to act responsibly
STRATEGY
• FACT: ACTING RESPONSIBLY AND NEW BUSINESS MODELS ARE STRATEGIC MOTIVES
• SIGNIFICANT: HIGH NEED FOR SUPPORT WHEN COOPERATING
• FUTURE: STRATEGY AIMED AT SUSTAINABLE ACTING AND COOPERATION

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BUILDING BLOCKS BMCE
1. CYCLES
2. VALUE CREATION
3. STRATEGY (5S)
4. ORGANISATION MODELS
5. REVENUE MODELS
FITTING ORGANISATION MODELS
• CLASSICAL: LTD, INC ETC.
• PARTICIPATIVE: FOUNDATION, UNION, CO-OPERATIVE ETC.
• SOCIAL ENTERPRISES: B-CORP (US), SOCIAL ENTERPRISE (UK),
COMMUNITY INTEREST COMPANY (CIC) ETC.
• HYBRID: MIX OF ABOVE FORMS OR …
• INTEGRALLY NEW FORMS OF ORGANISING?

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Citizen
Initiative(s)
Multiple
Constituents
Local
Orientation
Multiple
Value
Creation
New ways of
Organizing
Community
Development
Wicked
problems
HUBS
IN VOIDS BETWEEN ORGANISATIONS
AND OTHER ACTORS
NEXT: NATIONAL SURVEY
BUSINESS MODELS CIRCULAR
ECONOMY
HANS STEGEMAN AND JAN JONKER
PARTICIPATE?
HTTP://BIT.LY/2DSU9S8 (DUTCH)

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THE CIRCULAR ECONOMY
HAS JUST BEGUN ...