Circular Entrepreneurship

The world is changing rapidly with positive and negative aspects, both in socioeconomic life and in the planet’s evolution. Growing imbalances do appear. A sustainable future for humans and nature is at risk. We must learn again to live in tune with nature and with one another. Nature is characterized by the dominance of circular movements that create through interconnected ecological relationships a viable environment, a kind of “given for all.” Social life is not a “given,” it is a “construct” largely initiated by entrepreneurship. “Circular entrepreneurship” is becoming a new, promising reality, in the manner of needed radical paradigmatic change. This chapter delivers a global overview of inherent problems and solutions in a systems-approach governing business dynamics and circular economy. Focus is also put on entrepreneurial multifaceted responsibility.

This chapter is dedicated to a systematic investigation concerning entrepreneurial motivation to act in the present challenging context towards circular economy implementation. What must and should be done? Why? Observations on the field and literature analysis deliver useful answers. The common business objective of circular entrepreneurship can be defined as “value creation,” but this “value” takes various forms according to activities, enterprises and countries. Global, holistic, environmental considerations and the cultural background of the decision-makers appear as key factors of the paradigmatic change in progress. Three major features are investigated: natural capital preservation (value becoming dramatic actuality), resource productivity (value becoming a growing factor of competitiveness) and ethical values promotion (the future of humankind and peace at stake).

The circular economy represents a very promising creative endeavor for entrepreneurs to discover and create novel opportunities, to experiment with new models of doing business and new relationships with partners, customers and employees. This chapter focuses on the role of the business model and business model innovation in the practice of the circular economy. Innovating business models is an expression of entrepreneurship, design and implementation that embraces the circular economy and makes profit compatible with the environment.

The growth of the circular economy requires an increasing number of entrepreneurs, who can start new businesses or renovate existing ones, building on these premises. Which steps concretely should they follow in this process? This chapter suggests that first they should develop a circular value proposition, and then they should conceive and develop all the remaining building blocks of the business model, always in the light of circular economy principles. Finally, they have to give attention to all the factors that can enable or constrain effective implementation and development of the circular business model.

Chapters 4 and 5 discuss the empirical evidence from a number of case studies and introduce a distinction between born circular and growing circular firms, with the idea that they can cooperate and benefit from reciprocal cooperation. The firms which are “growing circular” are in a transition towards less impactful activities and towards the adoption of circularity principles. This chapter deals with born circular ventures, that is with circular entrepreneurship in small and young ventures, analyzed through a number of micro-cases, that is short stories of many born circular ventures. From their experience it is possible to extract some key findings about the role of the context in which they have been born and grown, the importance of the founders and leaders, and more generally the issue of human resources and talent attraction. Also differentiated corporate governance forms and issues are found and illustrated. The other key resources, beyond people, such as finance, are identified and discussed, as well as their value propositions and business models.

The transition of existing businesses towards the circular economy does not operate according to a unique kind of process: variety is correlated to numerous specific features. That makes the “real economy” interesting to discover while promising efficient, effective solution models. The first section is dedicated to large multinational companies, SUEZ and Saint-Gobain, forerunners in the circular economy, but following different evolutionary paths. SUEZ promotes a radical “resource revolution”; Saint-Gobain, founded in 1665, is opting for a continuous evolutionary innovation process. The second section focuses on two successful family-owned businesses: the Hager Group and Soprema, with different business cultural backgrounds. The third section looks at organizational problems for very large firms (like Engie) and small and agile ones (like EIM).

The last chapter aims at discussing a general model for circular entrepreneurship, as a context-specific phenomenon. The enabling conditions for the rise and growth of circular enterprises are considered, from internal factors, like resources and capabilities, to external conditions. External conditions refer to an enabling context and institutional factors that can support the growth of circular ventures. An integrative model for circular entrepreneurship is presented, which shows the entrepreneurial processes of exploration and exploitation of opportunities in the circular economy domain, in their co-evolution with their specific context. The model considers the different analytical levels: the individuals (entrepreneurs and leaders), the organization (circular enterprise), the inter-organizational ties (partnerships, networks and ecosystems) and the external context. The entrepreneurial processes generate different innovations, from technological to financial, corporate governance and business model innovations.