As circular economy and sustainability gain greater attention of governments, industry and academia, business model innovation for circularity and/or sustainability is becoming fundamental to sustain companies' competitive advantage. A variety of business model innovation approaches have been proposed to suit circular economy or sustainability principles. Although they largely have been addressed independently as two separate knowledge areas, there is an opportunity to seize synergies from the intersection of both streams. This paper provides a review of approaches for business model innovation for circular economy and/or sustainability, based on a systematic review of academic literature and practitioner-based methodologies. The systematic literature review identified 94 publications and 92 approaches (including conceptual models, methods or tools). The different approaches were categorized according to the business model innovation process, following a three stage dynamic capability view. Subsequently they were compared based on five characteristics (nature of data, boundaries of analysis, level of abstraction, time-based view, and representation style), to allow for a better understanding of how to use the approaches in research and practice. Based on the review, key findings outlining trends and a reflection about the interface of the scopes of circular economy-oriented and sustainability-oriented business model innovation are presented. Moreover, a number of gaps are identified and a framework that maps a future research agenda to simultaneously advance both streams is outlined.
Sustainability and circular economy (CE) are of growing interest for governments, investors, companies and the civil society. Sustainability envisions a balanced integration of economic performance, social inclusiveness, and environmental resilience, to the benefit of current and future generations (Geissdoerfer et al., 2017a). CE emerged as an umbrella concept in the 20100 s (Blomsma and Brennan, 2017), and envisions the achievement of a more resource effective and efficient economic system by intentionally narrowing, slowing and closing materials and energy flows (Bocken et al., 2016; EMF, 2015). CE is often seen as a means to achieving sustainability, but with a narrower focus on the economic and environmental dimensions (Geissdoerfer et al., 2017a). Nevertheless, not all systems (e.g. businesses, value chains) incorporating circular principles are intrinsically more sustainable (Geissdoerfer et al., 2018b).
Enhanced sustainability or circularity requires changes in the way companies generate value, understand and do business. Companies are compelled to interact within an ecosystem of actors, moving from a firm-centric to a network-centric operational logic. This transition requires rethinking their incumbent business models (BM), in order to enable a decoupling of value creation and resource consumption (Bocken et al., 2016). Hence, business model innovation (BMI) towards sustainability and circularity is a fundamental capability for companies.
This research aimed to identify and systematize CE-oriented and sustainability-oriented BMI approaches available in literature and practice, in order to provide a clear overview on this topic for scholars and practitioners.
Applying a three-stage (sensing, seizing, transforming) dynamic capabilities-based view as the backbone to represent the stages of BMI, this article systematically identified and compared 92 approaches e i.e. conceptual frameworks, methods and tools - for sustainability/CE-oriented BMI based on six characteristics: stages supported in the BMI process; nature of data; boundaries of analysis; level of abstraction; time-based view; and representation style.
Based on the analysis, key findings outlining trends of approaches were identified: approaches are becoming more heterogeneous and relying on multiple theories that deviate from the traditional view disseminated by the BM Canvas; the simultaneity of BMI approaches envisioning sustainability and CE principles is emerging timidly and deserves more exploration to flourish; a design-implementation gap might be associated to approaches focusing on single stages of BMI and also a negligence of humanbehavior aspects. Connected to our first key finding, we proposed an initial comparison for CE/sustainability-oriented BMI based on their scope or drivers for value generation. Moreover, a number of gaps and future research agenda to advance both fields simultaneously were outlined: (1) establishing consensual foundations and taking advantage of synergies, (2) addressing CE/sustainabilityoriented BMI as a continuous and holistic process, (3) adapting existing methods/tools or exploring new ones to fill in specific gaps, and (4) applying different research methods.