Circular Business Models of Biocomposites - Value Creation in an Industrial Ecosystem

Abstract

Market and regulatory drivers encourage circularity of materials and the development of circular business models. Governments, companies, and consumers aim to reduce carbon footprints and plastic dependency. The use of biocomposites is increasing globally in various industrial applications. Biocomposites are natural fibre-reinforced materials composed of two or more materials. Conventional materials are in some cases replaced with biocomposites.  Product development of substitute products and the establishment of suitable manufacturing infrastructure are complex processes. Business models determine how an organization creates value, delivers value, and captures value linked with internal strategies and processes. All these are needed for business model development and innovation. Linear business models are typically based on the use of virgin materials. In circular business models, resources are circulated as long as feasible, thus eliminating waste, and circulating products and materials. Business models are an interplay between regulations, varying market expectations, and market opportunities. Transition from linear business models towards circular business models requires a system-level approach. This incorporates circular design as a holistic starting point for new product development. The circular approach needs to cover both biological and technical material flows. Strategic business choices for circularity are developed for circular value chains. In a circular approach, the product design process is integrated at an early stage, because design and material choices are closely interlinked, and they affect resources, infrastructures, and activities. 
This research article combines a literature review of circular business models with the case of biocomposites and studies how adopting biocomposites affects business models and value networks. Circular business models in biocomposite value network are further studied via combining the theoretical insights with interviews that were conducted among companies that participated in a two-year research project related to biocomposites.