Chapter 5: Business Innovation and Change for Circular Economy

For organisations of any type to move towards circular economy (CE), business models are likely to require transformation based on creative thinking and innovation around technology and partnerships both within the supply chain and with end-users. This chapter explores the role of innovation and technology in a future CE-driven world and looks at some examples in the present that suggest an optimistic outlook.

If we stop and reflect for a moment on the transformation challenge for CE, we can get an insight as to the complexity of its implementation. Practitioners need to effect robust business models – they will need to take a much wider perspective in planning and implementing their business activities. Scoping endeavours in the CE will be a difficult but necessary ambition. Putting a partial plan in place for single aspects of a CE project could have serious negative repercussions and so a holistic mindset is required. Executives in these areas will need a concise vision of the whole system. This issue in itself may need a radical change in staff competences and capabilities as firms struggle to envision the bigger, more complex, business relationships that will emanate from their new working environments. Supply chain management will move from largely binary contracts towards multi-stakeholder negotiations; the control that many organisations had in the supply chain process may seem to disappear as decision-making becomes much more complex; plans that were being made for the immediate future must now be made for the longer term; supply chain management financial negotiations will dramatically change in the CE. Companies and suppliers currently have a reasonably clear idea of their contracts – many supplier contracts are for several years and a significant number are rolling. The parameters of partnership in supply chains will change, and exchange will not only concern finance and transaction but will involve reuse, recyclables, and the repurposing of resources, data, and materials, in particular, to reduce negative environmental impact and embrace circularity.