Tag Archives: circular economy model

This is an excerpt from one of my papers published through Wiley’s Business Strategy and the Environment.

_{Suggested citation: Camilleri, M.A. (2025). Cocreating Value Through Open Circular Innovation Strategies: A Results-Driven Work Plan and Future Research Avenues, Business Strategy and the Environment, https://doi.org/10.1002/bse.4216}

This research raises awareness of practitioners’ crowdsourcing initiatives and collaborative approaches, such as sharing ideas and resources with external partners, expert consultants, marketplace stakeholders (like suppliers and customers), university institutions, research centers, and even competitors, as the latter can help them develop innovation labs and to foster industrial symbiosis (Calabrese et al. 2024; Sundar et al. 2023; Triguero et al. 2022). It reported that open innovation networks would enable them to work in tandem with other entities to extend the life of products and their components. It also indicated how and where circular open innovations would facilitate the sharing of unwanted materials and resources that can be reused, repaired, restored, refurbished, or recycled through resource recovery systems and reverse logistics approaches. In addition, it postulates that circular economy practitioners could differentiate their business models by offering product-service systems, sharing economies, and/or leasing models to increase resource efficiencies and to minimize waste.

Arguably, the cocreation of open innovations can contribute to improve the financial performance of practitioners as well as of their partners who are supporting them in fostering closed-loop systems and sharing economy practices. They enable businesses and their stakeholders to minimize externalities like waste and pollution that can ultimately impact the long-term viability of our planet. Figure 1 presents a conceptual framework that clarifies how open innovation cocreation approaches can be utilized to advance circular, closed-loop models while adding value to the businesses’ financial performance.

The collaborative efforts between organizations, individuals, and various stakeholders can lead to sustainable innovations, including to the advancement of circular economy models (Jesus and Jugend 2023; Tumuyu et al. 2024). Such practices are not without their own inherent challenges and pitfalls. For example, resource sharing, the recovery of waste and by-products from other organizations, and industrial symbiosis involve close partnership agreements among firms and their collaborators, as they strive in their endeavors to optimize resource use and to minimize waste (Battistella and Pessot 2024; Eisenreich et al. 2021). While the open innovation strategies that are mentioned in this article can lead to significant efficiency gains and to waste reductions, practitioners may encounter several difficulties and hurdles, to implement the required changes (Phonthanukitithaworn et al. 2024). Different entities will have their own organizational culture, strategic goals, and modus operandi that may result in coordination challenges among stakeholders.

Organizations may become overly reliant on sharing resources or on their symbiotic relationships, leading to vulnerabilities related to stakeholder dependencies (Battistella and Pessot 2024). For instance, if one partner experiences disruptions, such as operational issues or financial difficulties, it can adversely affect the feasibility of the entire network. Notwithstanding, organizations are usually expected to share information and resources when they are involved in corporate innovation hubs and clusters. Their openness can lead to concerns about knowledge leakages and intellectual property theft, which may deter companies from fully engaging in resource-sharing initiatives, as they pursue outbound innovation approaches.

Other challenges may arise from resource recovery, reverse logistics, and product-life extension strategies (Johnstone 2024). The implementation of reverse logistics systems can be costly, especially for small and micro enterprises. The costs associated with the collection, sorting, and processing of returned products and components may outweigh the benefits, particularly if the market for recovered materials is not well established (Panza et al. 2022; Sgambaro et al. 2024). Moreover, the effectiveness of resource recovery methodologies and of product-life extension strategies would be highly dependent on the stakeholders’ willingness to return products or to participate in recycling programs. Circular economy practitioners may have to invest in promotional campaigns to educate their stakeholders about sustainable behaviors. There may be instances where existing recovery and recycling technologies are not sufficiently advanced or widely available, in certain contexts, thereby posing significant barriers to the effective implementation of open circular innovations. Notwithstanding, there may be responsible practitioners and sustainability champions that may struggle to find reliable partners with appropriate technological solutions that could help them close the loop of their circular economy.

In some scenarios, emerging circular economy enthusiasts may be eager to shift from traditional product sales models to innovative product-service systems. Yet, such budding practitioners can face operational challenges in their transitions to such circular business models. They may have to change certain business processes, reformulate supply chains, and also redefine their customer relationships, to foster compliance with their modus operandi. These dynamic aspects can be time-consuming, costly, and resource intensive (Eisenreich et al. 2021). For instance, the customers who are accustomed to owning tangible assets may resist shifting to a product-service system model. Their reluctance to accept the service providers’ revised terms and conditions can hinder the adoption of circular economy practices. The former may struggle to convince their consumers to change their status quo, by accessing products as a service, rather than owning them (Sgambaro et al. 2024). In addition, the practitioners adopting products-as-a-service systems may find it difficult to quantify their performance outcomes related to resource savings and customer satisfaction levels and to evaluate the success of their product-service models, accurately, due to a lack of established metrics.

In a similar vein, the customers of sharing economies and leasing systems ought to trust the quality standards and safety features of the products and services they use (Sergianni et al. 2024). Any negative incidents reported through previous consumers’ testimonials and reviews can undermine the prospective customers’ confidence in the service provider or in the manufacturer who produced the product in the first place. Notwithstanding, several sharing economy models rely on community participation and localized networks, which can pose possible challenges for scalability. As businesses seek to expand their operations, it may prove hard for them to consistently maintain the same level of trust and quality in their service delivery. Moreover, many commentators argue that the rapid growth of sharing economies often outpaces existing regulatory frameworks. The lack of regulations, in certain jurisdictions, in this regard, can create uncertainties and gray areas for businesses as well as for their consumers.

This open access paper can also be accessed via ResearchGate: https://researchgate.net/publication/389267075_Cocreating_Value_Through_Open_Circular_Innovation_Strategies_A_Results-Driven_Work_Plan_and_Future_Research_Avenues#CSR#CircularEconomy#OpenInnovation