Barriers to Circular Business Model Innovation: A Multiple-Case Study

The concept of circular economy has been suggested as a possible avenue to sustainable development. The adoption of circular business models at a company level, which is a key element in the transition to a circular economy, has nevertheless been slow. The purpose of this article is to provide an overview of the barriers that hinder adoption of circular business models to facilitate circumvention of the barriers and a faster uptake. The article presents a multiple-case study of the circular business model innovation process in 12 Danish companies that includes a cross-case analysis across start-ups and incumbents and across different company sizes, industries and customer segments. The article furthermore compares the barriers derived from this empirical work to barriers found in the sustainable innovation literature. The research shows that barriers to circular business model innovation are found at all socio-technical levels and, overall, most barriers are encountered by companies at the organisational level, followed by the value chain level, the employee level and, finally, the market and institutional level. However, there are significant variation between the case companies regarding what barriers are encountered and how many in total. The cross-case analysis shows that factors other than company size, industry and customer segment affect what barriers are encountered. The comparison of empirically derived circular business model innovation barriers from the multiple-case study with barriers compiled from the broader literature on sustainable innovation shows a good correspondence between the two lists. The empirical study, nevertheless, identifies additional barriers not previously reported in the literature.