The circular economy makes both environmental and business sense. In the circular economy, growth no longer requires an increasing extraction and consumption of resources, energy, water and primary raw materials. There is less waste, and products and resources maintain their value in the economy for as long as possible. The circular economy needs more than traditional R&D or a piecemeal approach to technologies: it needs changes in entire systems and joint efforts by researchers, technology centres, industry and SMEs, the primary sector, entrepreneurs, users, governments and civil society. It needs enabling regulatory frameworks, and additional public and private investments, in terms of innovation.
How can companies incorporate circular economy principles into their R&D operations?
Nowadays, firms need new corporate strategies and models to safeguard profitability and competitiveness as well as the heritage of natural resources. Indeed, firms can respond to sustainability challenges in a different way, either proactively or defensively, according to the business models and priorities. Some firms promote green and circular initiatives to pursue “ethical leadership” and generate positive impacts on the corporate’s image, but other firms mainly target cost reduction through better usage of raw materials while other firms focus on energy consumption and savings.
How can innovation management look like in regards to a circular economy?
The realisation of the circular economy implies several changes. For example, i) behavioural changes by consumers, who need to embrace different lifestyles and consumption modes and; ii) regulatory changes, involving, for example, the introduction of public incentives or new regulations to address end-of-life products and secondary raw materials. Therefore innovation, strictly intended as “technological innovation” is not the only driver, but in specific cases is a key enabler. Three types of Circular Economy changes with regard to the use of technology in the products’ value chain are the following:
- Products/services representing a completely new solution, relying heavily on technology and less on specific consumers’ behaviours. Biodegradable plastics are an example of this class, that have already taken some market shares;
- Products/services where technology is of minor importance, but where consumers’ behaviour is fundamental, and adaptation to a different consumption style is a key success factor. The example brought in the previously- mentioned publication is the spreading of packaging-free shops;
- Products/services where consumers’ style is fundamental and where the technology is the key enabler. Examples of this kind are sharing economy services (e.g., bikes, cars and even dishwashers), where the use of digital platforms facilitate the implementation of the business model.
How can companies utilize stakeholder cooperation and industry networks to drive the development of new circular economy technologies? A perspective that is close enough to know the needs of companies and broad enough to see the possibilities for crossovers and cooperation, contacting directly with a good knowledge of the industrial sector(s) and region(s), in terms of innovation. A good way to create awareness and to inspire is to show good practices and successful examples. The role of increasing awareness and inspiring stakeholders seems more suited for organisations than for regional authorities, most probably because cluster organisations are closer to the stakeholders and use the same manner of speaking.