Strategies for sustainable and circular ecosystems
Environmental sustainability and the circular economy are regularly spoken of as paradigms that can help address grand societal challenges such as the depletion of natural resources, climate change, emissions abatement, environmental degradation, biodiversity loss, and biophysical resource-growth coupling. However, advancing a sustainable circular economy is a ‘wicked problem’: it is complex, difficult to fully anticipate, and requires adaptive strategies by multiple actors across different economic, social, and policy domains. It requires a reshaping of the logic of value creation at multiple levels, including product, consumers, individual firms, value chains, and institutional and policy environments. The transition to a sustainable and circular economy requires collaborative business models that leverage ecosystems able to support sustainability and circularity, and a range of scientific, technological, and digital enablers to open new sources of value and accelerate a business-society-environment paradigm shift. Rigorous scholarly work is needed to help uncover and design effective strategies for sustainable and circular ecosystems and meaningfully measure ecosystem impacts. This Special Issue invites both empirical and theoretical work in this area.
Guest editors:
Backgrounds of Guest Editors
Professor Leena Aarikka-Stenroos is a Professor of Industrial Management at Tampere University, Hervanta Campus, Finland. Her expertise is in innovation and technology business, particularly in the Circular Economy, collaboration for innovation and interplay between technology developers and stakeholders in the market, and networks and ecosystems in innovative technology businesses. She holds a doctoral degree in Marketing, but her work is at the intersection of business, engineering, and innovation. She is a consortium leader of extensive strategic CE project CICAT2025 (5,6 M€) and collaborates actively with diverse stakeholders (companies and government ministries) for the CE transition. Her research articles on technology-based business and value creation are published, for example, in Industrial Marketing Management, Journal for Cleaner Production, Journal of Business Research, and Resources, Conservation and Recycling.
Professor Erkko Autio is Chair in Technology Venturing and Entrepreneurship in the Management and Entrepreneurship Department at Imperial College Business School. Erkko is co-founder of the Global Entrepreneurship and Development Institute, co-author of the Global Entrepreneurship and Development Index, and a founding team member of the Global Entrepreneurship Monitor GEM initiative. He is or has been an editorial board member in AMJ, JIBS, SEJ, JBV, ETP and JMS. He has edited Special Issues for Strategic Entrepreneurship Journal (on entrepreneurial ecosystems), Research Policy (on entrepreneurial innovation) and Small Business Economics (on institutions and entrepreneurship). His research interests are in digitalization, entrepreneurship and entrepreneurial ecosystems, innovation ecosystems, business model innovation, and sustainability.
Professor Peter Hopkinson is the Professor of Circular Economy and co-director of the Exeter Centre for Circular Economy, which he established in 2018. He is also Co-Director of the, £30M National UKRI CE research hub launched in January 2020. As an early strategic partner of the Ellen MacArthur Foundation (EMF), Peter brings over 10 years of research expertise and application nationally, internationally and across multiple sectors, to this project. Peter has led multiple projects as PI (£10M+) including the application of Circular Economy to plastics, construction, infrastructure, and medical technology. Back in 2013 Peter established the world’s first MBA in CE, and since 2014 has run with the Ellen MacArthur Foundation a global on-line CE Masterclass, which has now been delivered to more than 2000 individuals from companies including Google, Philips, Renault, Danone, Solvay, H&M, Ikea and Ricoh.
Professor Paavo Ritala is a Professor of Strategy and Innovation in the School of Business and Management at LUT University, Finland. His main research themes include ecosystems and platforms, the role of data and digital technologies in organizations, collaborative innovation, sustainable business models, and circular economy. His research has been published in journals such as Journal of Management, Research Policy, Journal of Product Innovation Management, Long Range Planning, Industrial and Corporate Change, and California Management Review. He is also closely involved with business practice through company-funded research projects, executive and professional education programs, and in speaker and advisory roles. Prof. Ritala is the Co-Editor-In-Chief of R&D Management.
Dr Yuliya Snihur is an Associate Professor at the Toulouse Business School, France. Yuliya teaches and studies strategy-formation processes in new ventures and the evolution of strategic management in existing firms based on the analysis of firms’ business models. Yuliya has published in such journals as Academy of Management Journal, Journal of Management, Journal of Management Studies, Long Range Planning, Strategic Entrepreneurship Journal, and Research Policy. She co-edited a Special Issue on business models and sustainability at the Journal of Cleaner Production and is working on a related special issue at Organization & Environment. Yuliya serves as Associate Editor at Long Range Planning and is member of editorial boards at Strategic Entrepreneurship Journal and Strategic Organization.
Dr. Llewellyn D W Thomas is an Associate Professor at IESE Business School in Barcelona and a Visiting Professor at Imperial College Business School. His research interests lie in the processes that lead to successful innovation and entrepreneurship, particularly ecosystem dynamics in digital economy contexts. He has published in such journals as the Journal of Management, Journal of Management Studies, Entrepreneurship Theory and Practice, Strategic Entrepreneurship Journal and Industrial and Corporate Change. He has been co-Editor for several special issues, including those at Strategic Entrepreneurship Journal and Journal of Business Venturing, and is currently the Co-Chief Editor of Innovation: Organization and Management.
Special issue information:
LRP Special Issue
Strategies for sustainable and circular ecosystems
Leena Aarikka-Stenroos, Tampere University
Erkko Autio, Imperial College Business School
Peter Hopkinson, University of Exeter Business School
Paavo Ritala, LUT University
Yuliya Snihur, TBS Education
Llewellyn D W Thomas, IESE Business School
Executive Summary
Environmental sustainability and the circular economy are regularly spoken of as paradigms that can help address grand societal challenges such as the depletion of natural resources, climate change, emissions abatement, environmental degradation, biodiversity loss, and biophysical resource-growth coupling. However, advancing a sustainable circular economy is a ‘wicked problem’: it is complex, difficult to fully anticipate, and requires adaptive strategies by multiple actors across different economic, social, and policy domains. It requires a reshaping of the logic of value creation at multiple levels, including product, consumers, individual firms, value chains, and institutional and policy environments. The transition to a sustainable and circular economy requires collaborative business models that leverage ecosystems able to support sustainability and circularity, and a range of scientific, technological, and digital enablers to open new sources of value and accelerate a business-society-environment paradigm shift. Rigorous scholarly work is needed to help uncover and design effective strategies for sustainable and circular ecosystems and meaningfully measure ecosystem impacts. This Special Issue invites both empirical and theoretical work in this area.
Justification for Special Issue
Environmental sustainability and the circular economy are critical to achieve climate change targets, decouple economic growth from resource use within planetary boundaries, and reduce the systemic environmental degradation caused by current modes of production and consumption (Ellen Macarthur Foundation 2019; Whiteman et al. 2013; Wiedenhofer et al. 2020). Incremental approaches to traditional resource efficiency are unlikely to be sufficient to produce the required transformations in resource productivity to dispose of the dominant linear model of “make, use, and dispose” (Geissdoerfer et al. 2017; Ghisellini et al. 2016). The question for business and society has become: How can such a shift unfold while maintaining quality of life, standards of living, business profitability and (re)building natural and social capital?
The sustainability transition constitutes a ‘wicked problem’ (Churchman 1967; Rittel & Webber 1973). System transitions towards future states involve multiple stakeholders across different economic, social, and policy domains, including private-sector firms from different industry sectors, cities and municipalities, public-sector agencies, and consumer-citizens (Geels & Kemp 2007). To date, numerous approaches to addressing the environmental sustainability and circular economy challenge have been proposed, including ‘limits to growth’ thinking, natural capitalism, blue economy, regenerative design, zero-waste, performance economy, biomimicry, and cradle-to-cradle design. Whilst these approaches have made important contributions, evidence of effective and impactful ecosystems and related business models that offer solutions to the complex socio-technical challenge at scale remains rare. Non-market strategies such as corporate social responsibility (CSR) and more recently environment, social, and governance (ESG) strategies have been widely adopted, but the evidence to support their ability to shift business beyond incremental linear change remains elusive. What is needed is the understanding of effective strategies for ecosystems that can address the complexity and scope of the transition towards a sustainable and circular economy.
Research has begun to reveal insight into the preconditions and drivers of system-level sustainability and circularity transitions. Received literature has explored, for example, collaborative business models and the role of digitalization and experimentation in facilitating sustainability and circularity transitions (Bocken & Snihur 2020; Dentchev et al. 2018; Gregori & Holzmann 2020; Lieder & Rashid 2016; Ranta et al. 2021). Furthermore, networked collaboration is a key for sustainable value creation, as sustainability and the circular economy create challenges and opportunities not only for individual firms (Bocken & Geradts 2020), but also for value chains, networks, ecosystems, and broader institutional environments (Kanda et al. 2021; Ranta et al. 2018). For instance, it is known that the composition of ecosystems changes as they are modified to support resource, material, and product loops (Aarikka-Stenroos et al. 2021; Kapitan et al. 2019; Lacoste 2016; Ranta et al. 2018). This occurs as firms increasingly select business partners not only on capability-based criteria but also sustainability-based criteria to ensure sustainable, transparent, and circular value chains and minimize reputation risk (Kaipainen & Aarikka-Stenroos, 2022). Furthermore, digital technologies (Volberda et al. 2021) and collaborative ventures such as digital service and platform-based business models open a range of possible new value propositions, such as rental and sharing (Baden-Fuller & Haefliger 2013; Carrasco-Farré et al. 2022; Dentchev et al. 2018; Ranta et al. 2020; Tukker 2015). New tools to map such complex value propositions in ecosystems are emerging (Talmar et al. 2020). As businesses move away from build-use-dispose models towards product-as-a-service and materials-as-a-service models, they are increasingly adopting what are known as the ‘R’ practices of circularity, such as repair, reuse, recycle, rematerialize, and repurpose (Ranta et al. 2021), or alternatively, business models that narrow, slow, and close resource loops (Bocken & Ritala 2021).
Researchers are increasingly keen to study these ecosystem-level societal transformations. A recent Web of Science SSCI searches using the string ecosystem* AND (sustainab* OR circular econom*) for the topic field in the context of Management and Business categories show that the sustainability and circularity themes are both very recent and rapidly increasing in popularity. Ten years ago, there were only 48 papers on sustainability and ecosystems ten years ago, while now there are 367 with 88 in the past year.
This rapid surge is creating conceptual and terminological proliferation and fragmentation (see Aarikka-Stenroos et al. 2021: for some examples), necessitating more systematic approaches and theorizing. Empirical evidence is accumulating, but we still need a clear roadmap in terms of effective sustainability and circular economy strategies for businesses to implement. There is only limited quantitative evidence on the social and environmental performance of newly introduced sustainable and circular business models or their wider ecosystem impacts (Snihur & Bocken 2022). Furthermore, there are increasing concerns about regulation and limiting negative externalities of rapidly scaling digital platforms that might challenge wider societal well-being (Ricart et al. 2020). In sum, given the importance of strategies for sustainable and circular ecosystems, cumulative understanding is needed in terms of designing effective strategies and policies and uncovering the mechanisms of value creation and value destruction in sustainable and circular ecosystems.
Questions of Interest
We seek papers for an LRP Special Issue focusing on strategies for sustainable and circular ecosystems. This Special Issue invites both empirical and theoretical work in this area. We have identified the following questions as being of interest for the Special Issue. The list is not exhaustive.
Theoretical Work
Theorizing the concept(s) of sustainable and circular economy ecosystems in management scholarship. How should sustainable and circular ecosystems be conceptualized in terms of scale, sectors, products, participants, and environmental concerns? How does the ecological science of ecosystems, for example the concepts of panarchy and resilience, relate to sustainable and circular economy ecosystems? Can we identify conceptually distinct archetypes (cf. Thomas & Autio 2020) or effective mapping of ecosystems (Talmar et al. 2020)? How do sustainable and circular business models connect with their wider business ecosystems? How do sustainable ecosystems and circular economy ecosystems differ from other types of ecosystems, as well as other widely used contextual concepts, such as markets, supply chains, clusters, industries, value chains, networks, and fields?
Theorizing effective strategies and policies for sustainable and circular ecosystems. How can organizational theories, such as design science, institutional, evolutionary, learning, or stakeholder theory, help develop effective strategies and policies for sustainable and circular ecosystems? How can we retain synergies between environmental, social, and economic goals when scaling up in ecosystem contexts? Although we are accumulating knowledge about archetypes and frameworks for sustainable and circular business models (Aarikka-Stenroos et al. 2021), it is less clear how traditional large and small businesses can transition to sustainable and circular business models. Furthermore, it is not clear how ecosystems correspondingly evolve. What policies could foster the development of more sustainable and circular ecosystems while at the same time mitigating potential negative externalities of such models for more local ecosystems and urban environments?
Empirical Work
Sustainability dynamics in sustainable and circular ecosystems. What capabilities and processes are critical in the effective business initiation, development, and scaling in sustainable and circular ecosystems? Are competitive dynamics the same in sustainable and circular ecosystem contexts as in “traditional” ecosystems? What are the effective strategies that new and incumbent ventures use to connect their business models to sustainable and circular ecosystems? Do the leaders or participants of various successful sustainable ecosystems have similar or different business models or strategies? What metrics and impact indicators can we use to characterize success in sustainable and circular ecosystems? How do value chains enabling circularity manifest and integrate into sustainable ecosystems? What are the critical internal and external enablers and barriers to different archetypes and scaling (e.g., product design, accounting systems, technology drivers, shareholders, investors, regulators, etc.)? How can (or should?) we measure the dynamic complexity of such ecosystems?
Disruptive competition and externalities. What are the competitive strategies that sustainable and circular economy ventures can use to gain entry to markets and unseat established incumbents to enable the transition to sustainable and circular ecosystems? How can sustainable and circular economy ventures build and leverage ecosystem momentum (Autio 2021) for competitive advantage? How can firms internalize ecosystem and environmental externalities into their business model and financial accounting and reporting? What are the most salient ecosystem externalities that new sustainable ventures can leverage to scale? How can digital platforms and other emerging technologies (AI, robotics, additive manufacturing, data analytics, internet of things) be leveraged to facilitate sustainability and circularity, and at the same time, economic growth?
Governance of sustainable and circular ecosystems. What are the effective practices and capabilities for orchestrating business ecosystems for sustainability and circularity? What incentives and processes underpin the relationships between different ecosystem participants? How important is the geographic location? How does knowledge sharing occur in sustainable and circular ecosystems? How do sustainable and circular ecosystems interact with the wider economy in which they are situated? How can ecosystem complexity, uncertainty, risk, and potential instabilities be managed during a sustainability or circular economy transition?
Long-term strategizing for sustainability and circular economy. What are effective strategies and policies to build resilience and ensure long-term profitability in sustainable and circular ecosystems? What are the effective leadership and managerial practices to prevent mission drift? What are the best strategies to convert the firm’s sustainability and circular mission from a profit drag (the firm first makes a profit and then diverts some of it towards sustainability causes) into a profit driver (where sustainable value creation lies at the heart of the business)?
Manuscript submission information:
Submission deadline is 01st October 2023
References:
Aarikka-Stenroos, L., Ritala, P. and Thomas, L. D. W. 2021, Circular economy ecosystems: A typology, definitions, and implications, in S. Teerikangas, T. Onkila, K. Koistinen and M. Mäkelä (eds.), Handbook of Sustainability Agency, Edgar Elgar, Cheltenham, UK: 260-276.
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