Circular Business Models: Overcoming Barriers, Unleashing Potentials

Most current patterns of production and consumption follow a linear “extract, produce, consume, dispose” model. According to the Circular Gap Report 2020, the global economy is just 9% circular. This economic model is contributing to a massive transgression of “planetary boundaries” and the destabilisation of ecosystems and factors essential to human life such as the climate system and biodiversity. As a result, there is currently much discussion of a paradigm shift in the industrial value creation model, away from a resource-intensive system and towards a resource-productive, predominantly circular model. This shift offers significant opportunities for an industrialized, exporting nation like Germany – ultimately, it entails nothing less than a recasting of the “Made in Germany” model.

The European Union and several of its member states have already developed strategic plans for the transition to a resource-efficient economic system based on circular economy principles. Non-European countries such as China, Japan and Canada are also following the same fundamental approach. However, Germany has yet to formulate a plan of its own.

The Circular Economy Initiative Deutschland (CEID) is a multi-stakeholder initiative involving over fifty institutions from science, industry and civil society that aims to lay the foundations of a plan for Germany. In its interdisciplinary, cross-sectoral working groups, some 130 experts consider how to enable and implement circular economic models, exploring potential fields of application and discussing the conditions that could facilitate successful implementation. The Circular Economy Initiative Deutschland is developing targets for the transition, with a focus on the following themes:

• Circular business models and digital technologies as drivers for innovation
• New value networks for batteries and packaging
• Framework conditions for a circular transformation and assessment of circularity’s economic potential

Between January 2020 and October 2020, the Circular Economy Initiative Deutschland’s Circular Business Models working group devised a scientifically based roadmap for the successful implementation of business practices for advancing a circular economy (CE).

The Report “Circular Business Models: Overcoming Barriers, Unleashing Potentials” represents the main outcome of the working group’s deliberations, covering

• the identification and description of actor-specific Circular Business Models (CBMs) and their interaction in business ecosystems,
• an integrated presentation of existing barriers to CBMs,
• the identification of digital and regulatory enablers for CBMs,
• the derivation of concrete recommendations for action addressed to decision makers in politics, business and science in order to accelerate system transition towards a CE.

The members thus support the initiation, implementation and long-term anchoring of the Circular Economy in Germany and beyond.

The working group’s 21 members are representatives of leading academic institutions, German businesses and organisations known for their expertise in the field of Circular Business Models. This composition allowed the group to achieve its goal of ensuring a scientifically substantiated and, as far as possible, holistic approach to the topic.