Exploratory Study on Circular Economy Approaches A Comparative Analysis of Theory and Practice

5.3 Practical Challenges for Realizing Benefits in a Circular Economy 115

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Innovation Type Circular Economy Approach Maturity Level

Product Innovation

(Changes the product)

Circular Supplies (e.g. creation of

products which are fully recyclable)

Fully implemented:

Alpha, Beta

Partially implemented:

Gamma, Delta,

Epsilon, Zeta

Resource Recovery (e.g. creation of

new products to use up left-overs

from the production line)

Fully implemented:

Eta, Theta

Remanufacturing (e.g. implementation

of new products which can be built

from the reusable parts of the original

product)

Process Innovation

(Changes the process)

Circular Supplies (e.g. use of renew-

able energy for the production line)

Organizational

Innovation

(Changes or adds

a business model)

Sharing Platform (e.g. enable custom-

ers to extend the use of their products)

Product as a Service (e.g. sell the

products access, internalize the

lifecycle management)

Product Life Extension (e.g. gather

used products and resell them if

possible, replace certain parts of

the product)

Fully implemented:

Iota

Fig. 6 Overview of identified challenges in the context of circular economy
implementation

Five sub-categories of the ‘nascent stage of concept’ are identified (as depicted

in Figure 6)Figure 6 Overview of identified challenges in the context of circular

economy implementation: difficult quantification of advantages, lack of customer

education, technological limitations, missing economies of scale, and insufficient

practical experience.

The first sub-category is the difficulty in quantifying the advantages of investing

in a circular economy. Decisions made at organizations are based on a robust fact

base such as business-case calculations that show a positive return on investments.

When it comes to the circular economy, organizations often lack the experience

and the data to be able to show the return an investment will deliver. The circular

economy is not yet a proven concept therefore the challenge for organizations is to

formulate meaningful arguments that support the decision made by the leadership

to implement the concept. The interviewee of case Theta explained the challenge as