Exploratory research on business and revenue models within the circular economy

Circular economy in Europe by 2050

The EU wants to build a fully circular European economy by 2050. This means that raw materials retain maximum value in a closed economic cycle where no waste is produced.

From take-make-discard to circular economy

However, many companies still operate on the take-make-discard principle. Companies buy raw materials, produce and sell. In the process, both during the production process and at the end of this product's life cycle, waste is created. In this economic model, raw materials no longer have any value at the end of a product's life cycle.

Companies that operate according to this principle are not yet or not sufficiently aware of the possibilities of circular economy or see many obstacles to fully commit to it.

Sharing circular business models with Flemish companies

Therefore, this research aims to provide insights into business and revenue models that allow entrepreneurs to create value within the circular economy. This research focuses on two key sectors, food and construction.

Findings

The study found that the essential building blocks of a business model remain important even within a circular economy:

• create value for customers (e.g. ease of use, price, quality, additional services offered, branding, etc.)
• identify customers (groups)
• determine communication channels;
• choose suitable revenue model;
• ...

To speak of a circular business model, it is necessary to start from ecodesign and use circular strategies such as reuse and repair.

Intensive cooperation with customers and suppliers (own value chain) or out-of-the-box partnerships (outside value chain) are essential to be successful. Merely selling a circular strategy, therefore, is not a good idea. That strategy must be part of a broader business model.

Many other findings/tips can be found in the research report.