Innovative business models for a sustainable circular economy

Cooperating with other enterprises facilitates sustainable solutions that far exceed the options open to individual enterprises.

Incremental changes in our business processes and marginal efficiency gains are not sufficient to address modern-day challenges. Economic partnerships using business models suitable for a circular economy represent one viable way forward.

This means moving away from an isolated perspective of purchase and sale towards a systemic view under which business partners work together and gear their processes to closed resource loops. Doing so, the circular economy is an interplay of mutually complementary business models. By cooperating, enterprises can reduce resource dependencies, gain competitive advantages and provide their workforces with a source of intrinsic motivation.

Using the example of wear2wear™, the researchers show a way of designing, validating and implementing such business models. At the centre is a seven-stage process that operates in four dimensions. Two of these focus on closing material cycles in a way that takes account of environmental sustainability, while the others address the marketing of the solution.

As further support, companies receive a guide to designing a circular business model, including suggestions as to how the circle can be completed, sustainably improved and financially promoted.

The working paper “Circular ecosystems: business model innovation for a circular economy” by the “Laboratory for circular economy” project can be found on the University of St. Gallen’s Alexandria research platform.


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Fabian Takacs Universität St. Gallen