A New Framework for Enabling Circular Business Models in Europe

Shifting to a circular economy in Europe is highly dependent on reducing resource use, lengthening the lifespan of products as well as boosting their reuse and shared use. Repairing, remanufacturing, and recycling are also important elements. Circular business models are thus crucial: but, what type and how to successfully implement them? The ETC-WMGE report “Business Models in a Circular Economy” presents an analytical framework to study the successful implementation of circular business models.

Developing appropriate business models is a key enabler in implementing circular economy goals. The term circular business model has, however, become something of a buzzword, with many different interpretations being used by different actors in literature and the public debate. Most analyses and discussions are focused on defining and conceptualising circular business models. Much less attention is being paid to the dynamics that are needed to transform current business practices into circular business models.

“Thus, the driving question behind this report was what are these dynamics and what kind of enablers are needed (beyond the usual economic and policy frameworks) to transform existing practices into economically viable circular business models.”, says CSCP’s Francesca Grossi, co-author of the report. “The answer comes in the form of an analytical framework for studying the implementation of circular business models by identifying the needs in terms of business model innovation, technological innovation and social innovation. Policy enablers as well as behaviour and education enablers are also important”, states Grossi.

You can read the full report here.

The framework – designed by the CSCP – creates a new perspective on the possibilities and limitations of business model innovation in driving the transition to a circular economy. It makes clear which action is needed to mainstream a certain type of circular business model, but equally important, it also shows that different pathways can be useful, depending on the technical social and policy context.

For further questions, please contact Francesca Grossi.