Facilitating systemic eco‐innovation to pave the way for a circular economy: A qualitative‐empirical study on barriers and drivers in the European polyurethane industry

Abstract

Scholars, politicians, and practitioners have recently advocated that eco-innovation (EI) is critical to achieve the circular economy (CE) vision. While much of the available body of knowledge on EI has predominantly focused on "eco-efficient" incremental technological innovation, a successful CE transition requires systemic "eco-effective" CE innovation. Yet, little is known about what barriers and drivers are stimulating systemic CE innovation in different sectors and regions. This research aims to deliver an identification of major CE barriers and drivers that impede or facilitate systemic "eco-effective" CE innovation in the European polyurethane plastics industry. A hybrid research approach is applied using an original combination of the inductive GABEK method ("GAnzheitliche BEwältigung von Komplexität"-holistic processing of complexity) with deductive consideration of existing theories. Novel findings indicate that barriers to CE innovation largely materialize on individual firm and intra-industrial levels, while drivers to CE innovation primarily manifest beyond immediate industrial boundaries (inter-/cross-industrial). The key contribution lies on revealing the necessity to reframe the focus from mere individual "optimization", which has been primarily discussed in the contemporary EI literature, to a collective (horizontal) "coordination" challenge across industries to enable a functional CE innovation. In addition, five strategic deliberations are proposed to facilitate and further advance the management of systemic CE innovation activities.

Bottom‐up dynamics in circular innovation systems: The perspective of circular start‐ups

“…So far, individual or collective extended producer responsibility (EPR) and recycling schemes that are supposed to drive circular transformation processes largely miss their purpose of large‐scale resource recovery (Atasu, 2018; Circle Economy, 2021; Kunz et al., 2018; Maitre‐Ekern, 2021; Morseletto, 2020b). This is partly because collective coordination across industries and innovative governance for cross‐sector CE innovation is still lacking (Schultz & Reinhardt, 2022). Systemic technological variety could be guided more strategically through dedicated cross‐sector and upcycling incentives/subsidies, product standards, and revised waste processing laws inspired by pioneer activities.…”

Approaching Tensions in Business Model Innovation for Sustainability: An Ordonomic Meta-Framework on Tensions

“…Therefore, decision-makers need to recognise and acknowledge tensions, but they are simultaneously advised to actively innovate governance structures to design boundary conditions that tensions resulting more likely in synergies than in tradeoffs to enable a co-evolutionary process between BMIfS and sustainable transitions. Further research could exemplarily investigate the boundary conditions for circular economy environments (see e.g., Schultz, Everding & Pies, 2021;Schultz, 2021;Schultz & Reinhardt, 2022), sharing platforms (e.g., Pies, Hielscher & Everding, 2020), etc. Concludingly, innovative inter-and multidisciplinary theories, conceptual, and empirical contributions for the fields of BMIfS and tensions are necessary to promote research activities and avoid a narrow perspective for this evolving research area.…”

Stakeholder governance to facilitate collaboration for a systemic circular economy transition: A qualitative study in the European chemicals and plastics industry

“…Yet, it remains clear that the application of all three “Rs” to the PUR industry necessitates systemic changes that pose challenges to the traditional company‐centric management and decision‐making by firms (Tapaninaho & Heikkinen, 2022). The emerging scholarly debates acknowledge that stakeholder collaborations may partly advance toward meeting these challenges, yet more research is in high demand to comprehend how stakeholder collaborations may overcome the company‐centric focus and thus enable functional governance of “high‐level” circularity (e.g., Hussain & Malik, 2020; Kiefer et al, 2021; Schultz et al, 2021; Schultz & Reinhardt, 2022). Against this backdrop, discussions on the CE have historically tended to be general in nature, often lacking a specific focus on the various facets of major stakeholders and their collaborative efforts (e.g., de Jesus et al, 2021).…”

“…Against this backdrop, two central ideas have emerged in recent scholarship. First, the transition to a CE must be supported by stakeholder collaborations (Marjamaa et al, 2021; Rincón‐Moreno et al, 2022; Seles et al, 2022; Tapaninaho & Heikkinen, 2022), which may be particularly wide‐ranging if they stretch beyond industrial or even sectoral boundaries (De Angelis et al, 2018; Fischer & Pascucci, 2017; Schultz & Reinhardt, 2022, 2023). Second, it is widely understood that the CE paradigm entails systemic change at the macro, meso, and micro levels (e.g., Kirchherr et al, 2017; Korhonen et al, 2018,b; Prieto‐Sandoval et al, 2018), evidently in view of the fact that sustainability is the ultimate objective of the systemic CE concept (Ghisellini et al, 2016; Kennedy & Linnenluecke, 2022).…”

“…A variety of the recent literature streams discussing stakeholder collaborations in CE is concerned with stakeholder collaborations within traditional supply chain setting focusing on conventional collaboration interactions between a focal firm and its immediate upstream suppliers or downstream customers (e.g., de Oliveira et al, 2019; Kazancoglu et al, 2018) or the level of firms' (vertical) integration for circularity (e.g., Hansen & Revellio, 2020). What has often been given less emphasis is how stakeholder governance for CE collaborations may function in a more systemic way by enabling individual corporations to operate beyond immediate industrial boundaries (see, e.g., Blomsma et al, 2023; De Angelis et al, 2018; Fischer & Pascucci, 2017; Schultz & Reinhardt, 2022; Tapaninaho & Heikkinen, 2022). Therefore, this article directly responds to the call by Fischer and Pascucci (2017, p. 19) to explore “the main challenge faced by firms engaged in CE transition,” namely, how “to arrange collaboration and business relations, whilst being constrained by an institutional system that is aligned with the principles of linear economy.” This article shows that collectively developed governance structures provide chemicals and plastics industry supply chain actors with a crucial opportunity to overcome the constraints of the current (linear) institutional system.…”