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Circular Business Models
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This book explores the need to develop business strategies, organise and fund transformation projects and manage the transformation programme in order to further a circular economy. Circular Business Models outlines sustainable business models that can be used by companies to move transformation forward on a large scale. In addition to business models the book will cover and discuss a number of other factors necessary for a successful transformation, such as business and innovation strategy, entrepreneurship and change management. Including original interviews with circular economy practitioners, this book will be applicable to industries as diverse as manufacturing, food processing, transportation and mechanical engineering. Addressing the different challenges that meet circular economy visionaries, it outlines strategies and business models needed to gain momentum in these different sectors.
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Table of Contents

1. Mankind vs. Reality. 10 The Science of Problem Solving. 11 References. 12 Part One - Business and Organizational Aspects of Circular Economies. 13 2. Development as a Process of Organization.. 13 The Organization of a Circular Economy. 15 A Development Over a Century. 17 References. 19 3. The Author's Journey. 20 Earlier Thoughts on Sustainability, Circular Economy, and Transformation.. 21 Sustainability. 21 Circular Economy. 22 Technology Development, Business Transformation, and Peak Oil 23 References. 23 4. The Circular Economy and Business Challenges. 25 Understanding Innovation and Business Development 26 Imminent Threats. 28 Crossing the Chasm - from Idealistic to Demanding Customers. 30 Carbon Dioxide and Global Warming vs. Resource Depletion.. 31 The Experience Curve. 32 References. 33 5. Complexity - The Tightly Woven Fabric of Society. 34 Complexity in Modern Society. 34 The Increasing Specialization in the Linear Economy. 36 Increasing Specialization of the Circular Economy. 37 References. 38 6. Could Resource Shortages Cause Problems?. 39 Complex Development 41 A Development in Steps. 42 Driving Change. 46 A Collaborative Effort 46 A Systems Perspective. 47 References. 47 7. Multiple Helix Collaboration for the Development of a Circular Economy. 48 A Multipe-Helix Innovation System.. 48 The Role of Governments. 49 Research and Training. 51 Non-Government Organizations. 52 Civic Society and the General Public. 53 Company and Public Sector Procurement 54 References. 55 8. Managing Change. 56 Change Management 58 Examples of Roles. 60 Early Phases of Transformation.. 60 The Savings Paradox. 61 Dismantling Obsolete Systems. 63 Mind-Set and Behaviour Change. 64 Leading Through Change. 64 The Resource Based View of Business Strategy. 66 References. 68 Part Two - Challenges by industry and business sector 69 9. Local Production and Distribution Systems. 69 The Current Situation.. 70 Transformation to Local Production and Distribution Systems. 70 The Development of Local Markets. 71 Efficient Systems for Local Production.. 72 Local Value Chains. 73 Local Food Production.. 73 Volume Growth.. 74 Secondary Qualities. 76 The Role of Large Firms. 77 Customers Form Industries. 78 Steps to Change. 78 Step 1: Local Stand-Alone Concepts. 79 Step 2: Local Production and Distribution Concepts. 79 Step 3: Integrated Local Value Chains. 80 Step 4: Volume Competition.. 81 Step 5: Local and Circular Concepts Dominate. 81 Disruptive Aspects of Change. 81 From Global to Local Production and Distribution.. 82 Procurement Strategies. 82 A New Focus. 83 Opportunities for Local Production Offered by Digitalization.. 84 Changing Customer Preferences. 85 Step 1: Indifferent Majority. 86 Step 2: Emerging Preferences. 86 Step 3: Widespread Adoption and Volume Growth.. 86 Step 4: Circular Majority. 87 Step 5: Preferences for Local and Circular Concepts Dominate. 87 References. 87 10. Sharing and Extended Use. 88 The Present Situation.. 88 Sharing Models. 88 Growth Opportunities and Patterns of Use. 90 The Product as a Service. 92 Inexpensive Alternatives. 92 Potential Growth Areas. 92 Integration.. 92 Flow.. 92 High Value. 93 Genuinely Circular?. 93 Steps to Change. 94 Step 1: Pilot Sharing Models. 95 Step 2: More Customers Prioritize Sharing. 95 Step 3: Sharing becomes the new normal 96 Aspects of Disruptive Change. 96 Extended Use. 97 Services Targeted at Consumers. 97 Business-to-Business. 99 Steps to Product Life Extension.. 100 Step 1 - Occasional Extended Use. 101 Step 2: Behaviour Change and Systems in Place. 101 Step 3: Extended Use Becomes a Priority. 102 Step 4: Extended Use Becomes the Norm.. 103 Aspects of Disruptive Change. 103 References. 103 11. Standardization and modularization.. 104 The Development and Growth of Lean Production.. 105 Design and Re-design.. 108 Step 1: Pilot Modularization.. 109 Step 2: Training and research.. 109 Step 3: Widespread adoption.. 109 Step 4: Legislation and procurement requirements. 110 Step 5: Modularization Becomes the Norm.. 111 Aspects of Disruptive Change. 111 References. 111 12. Recycling and Upcycling. 112 Corporate Re-manufacturing. 113 Materials Recycling. 114 Materials Difficult to Recycle. 114 Steps to Recycling and Upcycling. 115 Step 1: Recycling and Incineration.. 115 Step 2: Increased Materials Recycling. 116 Step 3: Increased Upcycling. 116 Step 4: Increased Use of Biologically Based Materials. 116 Aspects of Disruptive Change. 116 References. 116 13. Biologically based materials. 117 Existing value chains. 118 Transforming Plastics. 118 Plastics from Wood. 121 Competition with Food Production.. 121 The Volume Issue. 121 Steps to New Materials. 123 Step 1: Pilot Introduction.. 123 Step 2: Volume Growth.. 124 Step 3: Resource Constraints. 124 Step 4: Reduction and Restructuring of Use of Materials. 124 Aspects of Disruptive Change. 124 References. 125 14. Transportation systems, renewable fuels and energy efficiency. 126 Scarcity and Climate Change. 126 Reduced Dependence on Oil?. 128 The British Fuel Crisis. 129 The Challenge of Transportation.. 129 A Web of Interrelationships. 135 Saving Power in Existing Applications. 136 Steps to the Transformation of Transport Systems. 138 Step 1: Early Adopters and Innovators Buy. 138 Step 2: Volume Growth.. 138 Step 3: Electric Car Dominance. 139 Step 4: The Last of Petroleum Cars. 140 Steps for Heavy Vehicles. 140 Market Analysis and Programme Planning. 142 References. 146 15. Construction, Infrastructure, and Digital Technologies. 147 Examples of Circular Models in Construction Related Areas. 148 Healthy and Sustainable Buildings. 148 Flooring. 148 Digitalization.. 149 Examples of Circular Business Models Based on Digital Technologies. 149 The Main Direction of Digital Development 149 Brief, But Important 150 References. 150 16. Life Sustaining Resources and Technologies. 151 Health Care. 151 Utilities. 152 Work. 153 Risk Management 153 References. 154 17. Financial Innovations. 155 Financial Risk Taking. 156 Financial Innovations Support Circular Development 157 Crowd Funding. 157 Complementary Monetary Systems. 158 Cryptocurrencies. 159 Reforming the Global Economy?. 160 Aspects of Disruptive Change. 161 References. 162 18. General Purpose Technologies as the Basis for Transformation.. 163 The Organization of Hypocrisy and Organization Man.. 165 Is Rapid Transformation Possible?. 167 The Transformation of US Industry to War Production.. 168 The Marshall Plan.. 169 The Apollo Program.. 170 Venice and the Preparations for the Fourth Crusade. 170 The Volume Issue Revisited. 171 References. 172 Part Three - A Way Forward. 173 19. Risks and Logical Fallacies. 173 Great Expectations. 174 Some Numbers. 176 Peak Oil 176 Peak Gas. 177 Phosphorous. 177 Rare Earth Elements. 178 The Paths of Peak Resources. 178 Understanding and prioritizing. 180 Decision Theory. 182 Fallacies of Experts and Decision Makers. 183 Failure to Realise That Society is Vulnerable. 183 Failure to Recognize the Scale and the Systemic Aspects. 184 Failure to Understand Markets. 184 Mistaking the Problem for the Solution.. 184 Mistaking a High-Level Description of the Solution for the Transformation Strategy and Plan 185 References. 185 20. Planning The Way Forward and Reality Check. 186 Steps to Circular Economic Flows. 186 Step 1: Trying Out Circular Models on a Small Scale. 186 Step 2: Evaluation of Progress and Simulation of Scale-Up. 186 Step 3: Avoidance of Conclusions. 186 Step 4: Prioritization.. 187 Step 5: Development of Strategies. 187 Reality Check. 187 Increasing Complexity Complicates Change. 187 Few Short Term Incentives to Change. 188 Little Experience of Resource Shortages. 188 Focus on a Description of Energy and Fuel Resources as a Sources of Pollution.. 188 It Takes Time to Calibrate World-Views and Resource Needs. 188 Will Decisions Be Made in Time?. 189 21. Paradigms, at Last 190 Scientific Revolutions. 190 The Circular Economy as a Paradigm Shift 191 Merging Paradigms. 192 References. 193 Epilogue 194

About the Author

Mats Larsson has worked for 20 years as a business consultant and is the founder of the Global Energy Transformation Institute. He is an expert in business strategy, innovations and entrepreneurship, and has worked extensively both with large companies and individual entrepreneurs in several technology and business areas. Most recently he has worked with large scale energy systems transformation.

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