Lost in Transition? Drivers and Barriers in the Eco-innovation Road to the Circular Economy

Eco‐innovation and firm growth in the circular economy: Evidence from European small‐ and medium‐sized enterprises

“…The principles of a CE are based on the application of the reduction, reuse, and recycle principles to production, consumption, and circulation at the micro (i.e., firm and consumer), meso (eco‐industrial parks), and macro (city, province, region, and nation) levels (Ghisellini et al, ; Lieder & Rashid, ). It refers to a restorative and regenerative system that minimizes resource use, energy leakage, and waste by closing the energy and material loops (De Jesus & Mendonça, ; Ellen MacArthur Foundation, ; Geissdoerfer et al, ). This section presents the theoretical and empirical literature surrounding circular EI, economic returns to circular EI, and the relevance of external finance for SMEs undertaking circular EI.…”

“…European Commission defines EI as “… all forms of innovation—technological and non‐technological—that creates business opportunities and benefits the environment by preventing or reducing their impact, or by optimising the use of resources” (European Commission, , p. 1). The literature has come to appreciate EI to be more than just green technologies but more broadly as “enablers of entire value chain transformations” to green the operations of the firm (De Jesus & Mendonça, , p. 77). EI do not only reduce the environmental impact of firms but hold the potential to empower firm growth through cost reductions arising from lower levels of waste, better management of environmental regulations, and reduced volatility of resource prices and supply chain risks and through an increase in the market share of environmental products (Kunapatarawong & Martínez‐Ros, ; Stucki, ).…”

“…CE investments are typically channelled into two main areas of EI, namely, eco‐design (also referred as “green design” or “design for the environment”) and clean production (De Jesus & Mendonça, ; Ghisetti & Montresor, ). Whereas the former is a typical example of product EI that can present in different ways such as incorporation of environmentally benign materials, longer life cycle, or an entirely new product category, the latter is a process EI that aims to improve eco‐efficiency through reduced material and energy use by redesigning the manufacturing and operational processes (Demirel, Iatridis, & Kesidou, ; Klewitz & Hansen, ).…”

“…EI do not only reduce the environmental impact of firms but hold the potential to empower firm growth through cost reductions arising from lower levels of waste, better management of environmental regulations, and reduced volatility of resource prices and supply chain risks and through an increase in the market share of environmental products (Kunapatarawong & Martínez-Ros, 2016;Stucki, 2018). CE investments are typically channelled into two main areas of EI, namely, eco-design (also referred as "green design" or "design for the environment") and clean production (De Jesus & Mendonça, 2018;Ghisetti & Montresor, 2018). Whereas the former is a typical example of product EI that can present in different ways such as incorporation of environmentally benign materials, longer life cycle, or an entirely new product category, the latter is a process EI that aims to improve eco-efficiency through reduced material and energy use by redesigning the manufacturing and operational processes (Demirel, Iatridis, & Kesidou, 2018;Klewitz & Hansen, 2014).…”

“…Making the existing production and consumption patterns more circular includes a broad spectrum of challenges from minimizing the environmental impact of production and ensuring effective reuse and recycling of products to introducing social interventions that align consumer behaviour with the principles of the CE (Bocken, Olivetti, Cullen, Potting, & Lifset, ; Geissdoerfer, Savaget, Bocken, & Hultink, ; Ghisellini, Cialani, & Ulgiati, ; Zucchella & Previtali, ). Pro‐CE eco‐innovations (or circular eco‐innovations [EIs] from here onwards) is a term used to refer to EI that target recirculation of resources in loops of reuse, recycling, and renewal (De Jesus & Mendonça, ), and they are crucial in the resolution of environmental challenges (Zubeltzu‐Jaka, Erauskin‐Tolosa, & Heras‐Saizarbitoria, ).…”