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

Abstract

The concept of circular economy (CE) is proposed to lead humanity toward a sustainable future. Public authorities increasingly build on CE narratives. The progress of private sector actors is key to enable more circular resource flows. Still, the world falls far short from becoming circular and large-scale implementation of CE in actual problem–solution spaces is scarce. This study sheds light into the external strategies of circular start-ups (CSUs) in building an adequate socio-institutional embedding for circular business models (CBMs) and puts the findings in the context of CE and sustainability transformations research. CSUs are a distinct group of CE-oriented actors that build and implement CBMs wholistically and from scratch. Thereby, they can directly and indirectly contribute to the creation of circular innovation systems. This study defines the common CE mission of CSUs, sets it in context of respective socio-political CE missions, and scrutinizes the roles that CSUs adopt to drive systemic CE implementation. We observe that CSUs’ strategic interventions go further than only novelty creation. This article proposes and elaborates on four roles that CSUs adopt: conveners, reinforcers, pioneers, and champions. The roles differ according to the CSU business models, stakeholders, the institutional elements that are addressed, as well as the directionalities that CSUs set. The findings are discussed considering the governance, policies, and strategic management of various directionalities in which CE innovation develops. It sheds light on inadequacies and limitations for bottom-up CE innovation in existing norms and cognition, policy, and network governance.