5.2 Impacts of Circular Economy Implementation on Organizations 105
105
input can be generated. Under the assumption of reasonable labor costs, additional
revenue can be created. Case Theta was able to realize this benefit as described by
the interviewee: “Senior leaders need to be convinced with business cases (proof of
concepts) to invest in a ‘Circular Economy’ as economic opportunity. Case Theta
[name changed by interviewer] is already creating two business cases using bacteria
to absorb CO2 and transform it into sugar. Hence, there is more output with the same
amount of input.” The organization was able to create new products from their waste
by creating strategic joint ventures with two other firms. Other organizations such
as cases Alpha, Eta or Zeta started to use their production scrap to manufacture
smaller or different products in order to make use of the leftovers from production.
Secondly, one case has been discovered in which recycled resources are alreadycheaper than virgin resources. A representative of case Zeta mentions that they’ve
found one of these exceptions: “But there are examples where we can buy resources
cheaper (...) e.g. recycled TPU is less expensive than the virgin material” (see Ap-
pendix: German Quote 55).
In conclusion, the costs for circulatable material play an important role in theimplementation of a circular economy. Besides the approach of using production
scrap as new input for production (whether granulated or for smaller items), circu-
latable material is still quite expensive for the organizations. Reusing circulatable
material is a substantial part of the circular economy concept. Only if prices for
circulatable material are able to compete with the ones for conventional material
organizations are able to achieve long-term market success.
5.2.1.1.2 Sub-Category 2: R&D Costs
High R&D expenses is another factor that negatively impacts the business result
in the context of a circular economy implementation. The development of circular
products, especially circular materials, requires innovation. Innovating often means
spending years on prototyping products, as shown in case Beta. For the development
of circular products it is necessary to find substitutes for the material currently in
use. Often these substitutes do not yet exist and must be newly developed. Several
cases from the study face this impact as illustrated in Table 18.