12 2 Theoretical Foundations
well as in structures of consumption and production that were radical, long-term
and far-reaching (Ceschin 2013; Kemp et al. 2007; World Resource Institute 2005;
Rennings 2000). Sustainability transition is also defined as “long-term, multi-di-
mensional, and fundamental transformation processes through which established
socio-technical systems shift to more sustainable modes of production and consump-
tion” (Markard et al. 2012, p. 956). To achieve these kind of changes, researchers
particularly stressed the importance of innovation and more specifically system
innovations (Gaziulusoy et al. 2013; Loorbach 2010).
The potential of system innovations for sustainable development has beenrecognized and investigated since the early 1990s (Weaver et al. 2000). Since then
the topic garnered the attention of various researchers (Tukker et al. 2008; Elzen
et al. 2002; Geels 2002; Green and Vergragt 2002; Partidário 2002; Partidário
and Vergragt 2002). Although no common definition has been established by
any academic scholar, system innovation for sustainability can be described as
a combination of innovations on various levels to provide service in a new way.
This entails a socio-technical change with new ways of practice and consumption
(Weber et al. 2008; Geels 2005). The term socio-technical in this context means
that this change does not only affect a technological change but in addition it
requires a modification of social patterns. These fundamental shifts usually take
several decades (Weber et al. 2008) and require an interplay between a variety of
actors such as policy makers, knowledge-generating institutions, companies and
customers (Gaziulusoy et al. 2013).
These requirements for system innovations lead to the role the circular econ-omy can play in the transition towards sustainable development. As described by
Geng and Doberstein (2008) the circular economy in China is seen as a socio-eco-
nomic organizing principle which takes place on three levels: corporate (micro),
inter-firm (meso), and societal (macro) level. The first two levels mainly include
measurements of cleaner production of singular companies or in eco-industrial
parks. While the purpose of these two levels is to use resources more efficiently
e.g. by using by-products from some businesses as inputs for their production the
third level concentrates on production as well as consumption patterns. On a macro
level activities from micro and meso level are included and linked to a network for
recycling, reusing, resource saving and circulation. At this level, authorities play an
important role for the implementation by linking the organization to individuals,
households, and societal infrastructures (transport, refuse collection, recycling,
etc.) (Naustdalslid 2014).