Circular Business Models : Developing a Sustainable Future

This book explores the need to develop business strategies, organise and fund transformation projects and manage the transformation programme in order to further a circular economy. __Circular Business Models__ outlines sustainable business models that can be used by companies to move transformation forward on a large scale. In addition to business models the book will cover and discuss a number of other factors necessary for a successful transformation, such as business and innovation strategy, entrepreneurship and change management. Including original interviews with circular economy practitioners, this book will be applicable to industries as diverse as manufacturing, food processing, transportation and mechanical engineering. Addressing the different challenges that meet circular economy visionaries, it outlines strategies and business models needed to gain momentum in these different sectors. Contents 5 List of Figures 11 1: Mankind vs. Reality 12 The Science of Problem Solving 14 References 16 Part I: Business and Organizational Aspects of Circular Economies 17 2: Development as a Process of Organization 18 The Organization of a Circular Economy 21 A Development Over a Century 23 References 27 3: The Author’s Journey 28 Earlier Thoughts on Sustainability, Circular Economy, and Transformation 30 Sustainability 30 Circular Economy 31 Technology Development, Business Transformation, and Peak Oil 32 References 34 4: The Circular Economy and Business Challenges 36 Understanding Innovation and Business Development 38 Imminent Threats 42 Carbon Dioxide and Global Warming vs. Resource Depletion 45 The Experience Curve 46 References 48 5: Complexity: The Tightly Woven Fabric of Society 49 Complexity in Modern Society 50 The Increasing Specialization in the Linear Economy 52 Increasing Specialization of the Circular Economy 55 Reference 56 6: Could Resource Shortages Cause Problems? 57 Complex Development 60 Driving Change 66 A Collaborative Effort 66 A Systems Perspective 67 References 69 7: Multiple-Helix Collaboration for the Development of a Circular Economy 70 A Multiple-Helix Innovation System 71 The Role of Governments 73 Research and Training 75 Non-government Organizations 76 Civic Society and the General Public 78 Company and Public Sector Procurement 79 References 82 8: Managing Change 83 Change Management 86 Early Phases of Transformation 89 The Savings Paradox 90 Dismantling Obsolete Systems 92 Mindset and Behaviour Change 94 Leading Through Change 94 References 101 Part II: Challenges by Industry and Business Sector 102 9: Local Production and Distribution Systems 103 The Current Situation 104 Transformation to Local Production and Distribution Systems 105 The Development of Local Markets 106 Efficient Systems for Local Production 108 Local Value Chains 109 Local Food Production 110 Volume Growth 111 Secondary Qualities 114 The Role of Large Firms 116 Customers Form Industries 116 Steps to Change 117 Step 1: Local Stand-Alone Concepts 117 Step 2: Local Production and Distribution Concepts 118 Step 3: Integrated Local Value Chains 119 Step 4: Volume Competition 120 Step 5: Local and Circular Concepts Dominate 121 Disruptive Aspects of Change 121 From Global to Local Production and Distribution 122 Procurement Strategies 123 A New Focus 124 Opportunities for Local Production Offered by Digitalization 125 Changing Customer Preferences 126 Step 1: Indifferent Majority 128 Step 2: Emerging Preferences 128 Step 3: Widespread Adoption and Volume Growth 128 Step 4: Circular Majority 129 Step 5: Preferences for Local and Circular Concepts Dominate 129 References 130 10: Sharing and Extended Use 131 The Present Situation 132 Sharing Models 132 Growth Opportunities and Patterns of Use 135 The Product as a Service 137 Inexpensive Alternatives 138 Potential Growth Areas 138 Integration 138 Flow 139 High Value 139 Genuinely Circular? 140 Steps to Change 141 Step 1: Pilot Sharing Models 142 Step 2: More Customers Prioritize Sharing 142 Step 3: Sharing Becomes the New Normal 143 Aspects of Disruptive Change 143 Extended Use 145 Services Targeted at Consumers 145 Business-to-Business 147 Steps to Product Life Extension 149 Step 1: Occasional Extended Use 150 Step 2: Behaviour Change and Systems in Place 150 Step 3: Extended Use Becomes a Priority 151 Step 4: Extended Use Becomes the Norm 152 Aspects of Disruptive Change 152 References 153 11: Standardization and Modularization 154 The Development and Growth of Lean Production 156 Design and Redesign 160 Step 1: Pilot Modularization 161 Step 2: Training and Research 161 Step 3: Widespread Adoption 162 Step 4: Legislation and Procurement Requirements 163 Step 5: Modularization Becomes the Norm 164 Aspects of Disruptive Change 164 References 164 12: Recycling and Upcycling 166 Corporate Remanufacturing 168 Materials Recycling 169 Materials Difficult to Recycle 170 Steps to Recycling and Upcycling 171 Step 1: Recycling and Incineration 171 Step 2: Increased Materials Recycling 172 Step 3: Increased Upcycling 172 Step 4: Increased Use of Biologically Based Materials 172 Aspects of Disruptive Change 172 References 173 13: Biologically Based Materials 174 Existing Value Chains 176 Transforming Plastics 177 Plastics from Wood 180 Competition with Food Production 180 The Volume Issue 181 Steps to New Materials 183 Step 1: Pilot Introduction 183 Step 2: Volume Growth 183 Step 3: Resource Constraints 184 Step 4: Reduction and Restructuring of Use of Materials 184 Aspects of Disruptive Change 184 References 186 14: Transportation Systems, Renewable Fuels, and Energy Efficiency 187 Scarcity and Climate Change 187 Reduced Dependence on Oil? 190 The Challenge of Transportation 192 A Web of Interrelationships 199 Saving Power in Existing Applications 201 Steps to the Transformation of Transport Systems 203 Step 1: Early Adopters and Innovators Buy 203 Step 2: Volume Growth 204 Step 3: Electric Car Dominance 205 Step 4: The Last of Petroleum Cars 206 Steps for Heavy Vehicles 207 Market Analysis and Programme Planning 209 References 216 15: Construction, Infrastructure, and Digital Technologies 217 Examples of Circular Models in Construction-­Related Areas 218 Healthy and Sustainable Buildings 219 Flooring 219 Digitalization 220 Examples of Circular Business Models Based on Digital Technologies 221 The Main Direction of Digital Development 221 Brief, but Important 222 References 223 16: Life-Sustaining Resources and Technologies 224 Health Care 225 Utilities 226 Work 227 Risk Management 228 References 229 17: Financial Innovations 230 Financial Risk Taking 232 Financial Innovations Support Circular Development 233 Crowd Funding 234 Complementary Monetary Systems 234 Cryptocurrencies 236 Reforming the Global Economy? 237 Aspects of Disruptive Change 239 References 241 18: General-Purpose Technologies as the Basis for Transformation 242 Is Rapid Transformation Possible? 248 The Transformation of US Industry to War Production 248 The Marshall Plan 249 The Apollo Programme 251 Venice and the Preparations for the Fourth Crusade 252 The Volume Issue Revisited 253 References 254 Part III: A Way Forward 255 19: Risks and Logical Fallacies 256 Great Expectations 258 The Paths of Peak Resources 262 Understanding and Prioritizing 265 Fallacies of Experts and Decision Makers 268 Failure to Realize That Society Is Vulnerable 269 Failure to Recognize the Scale and the Systemic Aspects 269 Failure to Understand Markets 270 Mistaking the Problem for the Solution 271 Mistaking a High-Level Description of the Solution for the Transformation Strategy and Plan 271 References 272 20: Planning the Way Forward and Reality Check 273 Steps to Circular Economic Flows 273 Step 1: Trying Out Circular Models on a Small Scale 273 Step 2: Evaluation of Progress and Simulation of Scale-Up 273 Step 3: Avoidance of Conclusions 274 Step 4: Prioritization 274 Step 5: Development of Strategies 275 Reality Check 275 Increasing Complexity Complicates Change 275 A Few Short-Term Incentives to Change 276 Little Experience of Resource Shortages 276 Focus on a Description of Energy and Fuel Resources as a Source of Pollution 277 It Takes Time to Calibrate World-Views and Resource Needs 277 Will Decisions Be Made in Time? 277 21: Paradigms, at Last 278 Scientific Revolutions 278 The Circular Economy as a Paradigm Shift 280 Merging Paradigms 282 References 284 Epilogue 285 Index 291 Front Matter ....Pages i-xi Mankind vs. Reality (Mats Larsson)....Pages 1-5 Front Matter ....Pages 7-7 Development as a Process of Organization (Mats Larsson)....Pages 9-18 The Author’s Journey (Mats Larsson)....Pages 19-26 The Circular Economy and Business Challenges (Mats Larsson)....Pages 27-39 Complexity: The Tightly Woven Fabric of Society (Mats Larsson)....Pages 41-48 Could Resource Shortages Cause Problems? (Mats Larsson)....Pages 49-61 Multiple-Helix Collaboration for the Development of a Circular Economy (Mats Larsson)....Pages 63-75 Managing Change (Mats Larsson)....Pages 77-95 Front Matter ....Pages 97-97 Local Production and Distribution Systems (Mats Larsson)....Pages 99-126 Sharing and Extended Use (Mats Larsson)....Pages 127-149 Standardization and Modularization (Mats Larsson)....Pages 151-162 Recycling and Upcycling (Mats Larsson)....Pages 163-170 Biologically Based Materials (Mats Larsson)....Pages 171-183 Transportation Systems, Renewable Fuels, and Energy Efficiency (Mats Larsson)....Pages 185-214 Construction, Infrastructure, and Digital Technologies (Mats Larsson)....Pages 215-221 Life-Sustaining Resources and Technologies (Mats Larsson)....Pages 223-228 Financial Innovations (Mats Larsson)....Pages 229-240 General-Purpose Technologies as the Basis for Transformation (Mats Larsson)....Pages 241-253 Front Matter ....Pages 255-255 Risks and Logical Fallacies (Mats Larsson)....Pages 257-273 Planning the Way Forward and Reality Check (Mats Larsson)....Pages 275-279 Paradigms, at Last (Mats Larsson)....Pages 281-287 Back Matter ....Pages 289-303 This book explores the need to develop business strategies, organize and fund transformation projects and manage the transformation programme in order to further a circular economy. Circular Business Models outlines sustainable business models that can be used by companies to move transformation forward on a large scale. In addition to business models the book will cover and discuss a number of other factors necessary for a successful transformation, such as business and innovation strategy, entrepreneurship and change management. Including original interviews with circular economy practitioners, this book will be applicable to industries as diverse as manufacturing, food processing, transportation and mechanical engineering. Addressing the different challenges that meet circular economy visionaries, it outlines strategies and business models needed to gain momentum in these different sectors Annotation This text explores the need to develop business strategies, organise and fund transformation projects and manage the transformation programme in order to further a circular economy. 'Circular Business Models' outlines sustainable business models that can be used by companies to move transformation forward on a large scale. In addition to business models the book covers and discusses a number of other factors necessary for a successful transformation, such as business and innovation strategy, entrepreneurship, and change management