The Emerging Research Field of Experimentation for Circular Business Model Innovation

The circular economy (CE) focuses on slowing, closing and narrowing of resource loops (Bocken et al., 2016; Geissdoerfer et al., 2017), and, despite high academic interest, this emerging concept is in need for action and validation (Blomsma & Brennan, 2017). Large established businesses such as Philips and Dell are vocal about the potential of circular business models to save natural resources, while becoming more competitive (World Economic Forum, 2018). At the same time, the implementation of the CE concept in large businesses is slow (Ritala et al., 2018) and the outcomes of innovating business models to serve the CE concept are uncertain (Linder & Williander, 2017). Experimentation can test novel circular business models in a flexible and efficient way, thus closing the ‘idea-action gap’ by focusing on testing options in practice. The need for business model experimentation coupled with differing, yet potentially compatible perspectives on the concept, calls for conceptual clarity in this emerging research agenda. Hence, this study explores the role of business model experimentation and its opportunities for accelerating and facilitating the implementation of the circular economy approach in company business models. While researchers in different fields started to investigate the role of business model experiments, also in relation to sustainability (e.g., Chesbrough, 2012; Huijben & Verbong, 2013), the concept of “circular business model experimentation” is still unrefined. The following research question is addressed: What is business model experimentation in a circular economy context?The review followed the suggestions of Fink (2020) and Tranfield et al. (2003) and started with a systematic database search. Web of Science, Scopus and Google Scholar databases were selected to review literature written in English. The following search string was used to systematically review article titles, abstracts and keywords: ‘business model*’ AND ‘experiment* AND ‘circular economy’. The search was constrained to management, engineering and social sciences. The abstracts were examined to identify the initial literature sample. In the second step of the systematic database search, inclusion and exclusion criteria were applied prior to extracting the information provided in the literature sample on the types, roles and process of circular business model experimentation. Only peer-reviewed journal papers were included. As the first search step only generated a limited number of results, the search string ‘business model*’ AND ‘experiment* AND ‘sustainability’ was used as second step to generate further insight. The rationale behind this is that the circular economy field may be regarded as a ‘subset’ of the broader sustainability concept (Geissdoerfer et al., 2017), so that the broader sustainability search string would generate additional results. The same inclusion and exclusion criteria as in the first step were applied to the second search step. This review method allowed us to generate a clear understanding of the emerging landscape of “circular business model experimentation”. The findings of this review include an overview of an emerging landscape of “circular business model experimentation” research and a proposed research agenda. Furthermore, this research offers novel insights into the nature of circular business model experimentation and tools, methods and approaches. The contributions to research are fourfold. First, the emerging landscape of circular business model experimentation is developed for this paper. Second, the 3principles underpinning the concept of circular business model experimentation are developed. Related to this, the need for deeper analysis within disciplines, but also transdisciplinary research on circular business model experimentation, was identified. Third, a range of distinct tools, methods, and approaches was uncovered. Many of these build on or directly use familiar frameworks from business model innovation literature. Others position experimentation in transitions literature, or as a research method, or describe circular business model experimentation as an inherently new approach. Fourth, and finally, we suggest a research agenda, with the key recommendation that consumption and production related experimentation must be linked. This aligns with the values-based view on the sustainable business model concept. This bridges production and consumption, by describing what value is proposed and to whom, how it is created and delivered, and how money is made and other forms of value are created to stakeholders.Other future research may focus on how to best conduct experimentation and which parameters would be desirable for this – points on which there is no agreement yet in the reviewed articles. This research agenda point ties in with the discussion on quantitative versus qualitative data and how both types of data can be used in a business experimentation setting. Furthermore, the intersections with other disciplines such as design, transitions research, and further afield areas like biology used for ecosystems perspectives and the broader concept of Industrial Ecology, form a rich source for further tool and method development. Finally, for practitioners, this work has sought to shed light on the adopted tools and methods in the business context, including how practitioners could try experimentation as a method in their business model development. Yet, there is still ample opportunity to investigate which tools are best suited for which organizational context, but also how to address the difficult question of how to embed the circular economy concept effectively in the business model and measure the impact of this implementation strongly echoing the empirical findings of Weissbrod & Bocken (2017)