Support circular and resource-efficient business innovations - Knowledge Hub | Circle Economy Foundation
Support circular and resource-efficient business innovations

Put enablers in place that allow circular businessesto grow, thrive and innovate (e.g. incubators, start-up funding, partnerships, innovation deals, business capacity building and testing groundsfor new business models).

Consists of:

🍏 Sustainable food and agriculture business ecosystems

Businesses support the innovation and implementation of circular strategies. Yet innovations and startups that close loops and facilitate reuse often face additional challenges, due to the lack of infrastructure that supports circular initiatives for example physical and digital infrastructure to support reverse logistics. Sustainable business ecosystems connect circular businesses around common problems and provide coordinated support, education and financing opportunities for these businesses to operate and scale together. This solution stimulates the local economy, which can promote local circular job opportunities in the future, and provides an attractive and supportive environment for more circular businesses to start up and scale the city. The local government may partner with innovation ecosystems and circular domain experts to create training modules and facilitation programmes for small businesses, making knowledge resources available to small businesses looking to go circular. Local governments may also provide financial support - either directly or in partnership with financial institutions - to target and stimulate ecosystems around specific circular business models.

🏢⚡ Optimised facility management

Buildings house all production activities, and also are where people spend the majority of their time. Consequently ‘buildings’ consume resources, namely energy and water, and produce large amounts of waste. The use phase of buildings represents the largest resource flows during their lifecycle. Optimised operations for different types of buildings—such as offices, industrial and commercial facilities or houses—can reduce energy, water and waste consumption, as well as operating costs, and enhance the wellbeing of users. Local governments can support Information and communication technology (ICT) innovation for the circular management of building operations for instance, by adopting new technologies, digital services and systems that can help with the monitoring and evaluation of (water and energy) efficiency. At the local level, policy can also set new building standards that can scale up net-zero waste, energy and water buildings. Then, the uptake of ‘green contracts’—agreements that require the contractor to develop and implement a site management plan and favour certain types of resources—can also stimulate circular operations by legally ingraining circularity in the relationship between building owners, operators and users.

🚌 Optimised & low-carbon freight and logistics systems

In cities, logistics is a key part of the mobility system, with freight transport making up on average 25% of traffic in cities, while taking up 40% of the road space, and generating 40% of transport-related emissions (<a href="">ICLEI). Often, urban logistics and freight vehicles commonly carry loads that are below full capacity, since much of urban logistics is centred around the last- or first- mile which has a strong preference for speed and convenience. This therefore means that more vehicles are on the streets, contributing to increased emissions, congestion and air pollution in urban areas. Optimisation of urban logistics systems can reduce the total quantities of vehicles on the roads and associated emissions and congestion. In addition to this, cities that are intrinsically linked to a port can optimise the incoming freight, the logistics of unloading, before such loads enter the urban mobility system. One such example is shared logistics systems that pool resources intelligently via digital systems that can match available load capacity with demand to minimise the total quantity of kilometres travelled and the number of vehicles required. Furthermore, decentralised distribution centres throughout cities can act as hubs for low-carbon and non-motorised logistics vehicles and achieve similar benefits in reducing the number of vehicles driving in cities, which can be particularly effective for last- and first-mile logistics. Local governments can support such optimisation systems by providing financial and in kind aid to innovations and initiatives that are focused on improving the technologies and processes that underpin and enable urban logistics. To this end, cities can share real-time transport related data to optimise logistics routes and support such innovations. Finally, cities can also leverage regulations to establish a minimum load capacity for logistics vehicles entering (certain parts of) the city.

🚌 Circular vehicle design and circular business models

Designing vehicles for maximum efficiency of resources is key in the circular economy. Circular design can allow vehicles to be manufactured using less resources, be easily remanufactured, parts to be swapped in and out (‘modular’), and/or space in the vehicle be reconfigured. Whereas digital technology can advance resource effective manufacturing techniques and support the automation of vehicles for sharing and mobility-as-a-service schemes. For instance, vehicles can be ‘retrofitted’ to run off batteries, remanufactured, or designed to be dismantled and allow the reuse of parts and recycling of materials. And when batteries cannot be reused to power a passenger car any longer, they can be reused for less demanding tasks, such as storage of electricity from wind turbines and solar farms. Cities can support business innovation towards these directions via direct financial and fiscal business support, by collaborating and engaging with circular businesses through urban Living Labs or other mechanisms, as well as setting up eco-industrial parks where by-products of one company can become a resource for another.

💧 Circular business models for water systems innovation

Circular water systems in cities will also depend on new business models shaping innovations and new activities. For example, water operators can determine the shift towards circular business models (e.g. fostering water reuse, decentralised water solutions, etc.). Cities can explore innovative financing and other support measures—for instance, building the adequate expertise in water resource and efficiency management or innovation challenges—for circular business models in water systems. Simultaneously, they should develop the right policy, institutional, regulatory frameworks to promote scale up these models. Fostering these new business models with additional revenue streams would, in turn, attract the private sector to close the funding gap needed for the circular transition.

⚡ Circular and resource-efficient business innovations

Circular solutions do not occur by themselves, they require innovative businesses, multi-stakeholder collaboration and an enabling regulatory environment. Circular and resource-efficient ecosystems are networks of local entrepreneurs and initiatives that innovate circular products and services. Such innovations can support the development of new and circular energy systems. The benefit of these ecosystems is that they encourage close collaboration of multiple businesses so that they can mutually benefit from each other. Another advantage is the potential to gain increased exposure to both investors and consumers through being part of a larger system. Local governments can support the creation of such ecosystems by, for example, providing rent-free access to the facilities and locations for entrepreneurs and initiatives that are developing circular innovations. Cities can increase their influence even further by establishing their own incubator or accelerator programs in which they support a cohort of businesses with promising innovative business models. Simultaneously they can stimulate these, and other, businesses by incorporating their goods and services in their public procurement strategy. Furthermore, they can help the businesses gain exposure by showcasing them at city-level events both domestically and abroad.

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