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2.3 Identify Relevant Stakeholders

To identify relevant stakeholders for circular Eeonomy the Triple Helix model must be reffered to.

The concept of Triple Helix of university-industry-government relationships initiated in the 1990s by Etzkowitz (1993) and Etzkowitz and Leydesdorff (1995), encompassing elements of precursor works by Lowe (1982) and Sábato and Mackenzi (1982), interprets the shift from a dominating industry-government dyad in the Industrial Society to a growing triadic relationship between university-industry-government in the Knowledge Society.

The Triple Helix thesis is that the potential for innovation and economic development in a Knowledge Society lies in a more prominent role for the university and in the hybridisation of elements from university, industry and government to generate new institutional and social formats for the production, transfer and application of knowledge. This vision encompasses not only the creative destruction that appears as natural innovation dynamics (Schumpeter, 1942), but also the creative renewal that arises within each of the three institutional spheres of university, industry and government, as well as at their intersections.

Through subsequent development, a significant body of Triple Helix theoretical and empirical research has grown over the last two decades that provides a general framework for exploring complex innovation dynamics and for informing national, regional and international innovation and development policy-making20.

The first workshop of the Triple Helix movement, launched by Prof. Henry Etzkowitz and Prof. Loet Leydesdorff, was organized in Amsterdam to discuss the Triple Helix model. It brought together 90 researchers and attracted participation from Latin America, Europe, North America, Australia and Asia. The workshop was subsequently referred to as the first international conference on the Triple Helix.

The London event in 2012 brought the issue of open innovation and invited participants to challenge the Triple Helix model, while extending and deepening the application of the conceptual apparatus, created as part of the evolution of the Triple Helix academic community. The considerable number of participants (over 300) from 35 countries indicated the emergence of a Triple Helix movement, anchored by the TH Association and spinning into numerous academic and practitioner domains21.

The Triple Helix innovation model focuses on university-industry-government relations. The Quadruple Helix embeds the Triple Helix by adding as a fourth helix the ‘media-based and culture-based public’ and ‘civil society’. The Quintuple Helix innovation model is even broader and more comprehensive by contextualizing the Quadruple Helix and by additionally adding the helix (and perspective) of the ‘natural environments of society’. The Triple Helix acknowledges explicitly the importance of higher education for innovation. However, in one line of interpretation it could be argued that the Triple Helix places the emphasis on knowledge production and innovation in the economy so it is compatible with the knowledge economy.

The Quadruple Helix already encourages the perspective of the knowledge society, and of knowledge democracy for knowledge production and innovation. In a Quadruple Helix understanding, the sustainable development of a knowledge economy requires a coevolution with the knowledge society. The Quintuple Helix stresses the necessary socioecological transition of society and economy in the twenty-first century; therefore, the Quintuple Helix is ecologically sensitive. Within the framework of the Quintuple Helix innovation model, the natural environments of society and the economy also should be seen as drivers for knowledge production and innovation, therefore defining opportunities for the knowledge economy.

The European Commission in 2009 identified the socioecological transition as a major challenge for the future roadmap of development. The Quintuple Helix supports here the formation of a win-win situation between ecology, knowledge and innovation, creating synergies between economy, society, and democracy. Global warming represents an area of ecological concern, to which the Quintuple Helix innovation model can be applied with greater potential (Carayannis et al., 2012).

Main stakeholders

Universities and research centres

Universities and research centres are very important for the development and growth of circular economy. For instance, Pioneer Universities are an international network of higher education institutions developing truly pioneering and innovative circular economy-orientated research or teaching programmes. Ellen MacArthur Foundation work with them to have a vision of a global network of higher education institutions that explore, develop and critique key ideas and priorities in a transition to a circular economy.

To bring this about, the Foundation is working with leading universities around the world, as they themselves work with business to find solutions and to educate and inspire future leaders, to address emerging economic realities. As non-fee paying members of the CE100 programme they have a formal agreement with the Foundation and commit to drive and support relevant and beneficial knowledge exchanges between business and HE (https://www.ellenmacarthurfoundation.org/assets/downloads/higher-education/HE-programme-overview_10-04-15_2.pdf) furthering the collective understanding of the circular economy through insights and skills development.

Many of these research and teaching programmes focus on Ellen MacArthur Foundation target disciplines - business, education, design and engineering. The Pioneer University programme offers bespoke input from the Ellen MacArthur Foundation’s team and facilitated links with regional networks around the world22.

Government

Government plays a key role in advancing the circular economy.  By setting legislative agendas, developing strategic programs and public services, and making smart decisions regarding internal agency operations, government can drive the demand for circular products and influence the way businesses operate. Large municipalities especially, have considerable influence over the public and commerce, far-reaching purchasing power, and the ability to impact millions of stakeholders through policies and programs. For example, it’s interesting to analyse the five ways Government drives the Circular Economy in New York City (NYC), the city is shaping the circular economy through its waste policy and practices.

1. Public Commitments

Two of Mayor De Blasio’s biggest public commitments impacting the circular economy are 0x30 and 80×50. 0x30 aims to achieve zero waste by 2030 and 80×50 calls for the reduction of GHG emissions by 80% by 2050. Ambitious public policy commitments set the stage for shifts in collective thinking around waste, resources and sustainability and open the floor for business to invent new and unique solutions.

2. Regulations

NYC has several laws that lay the foundation for closed loop material systems. Recycling has been a legal mandate since 1989 here, and was expanded over the past decade to include a wide variety of materials (most recently rigid plastics). The next innovation in convenience is single stream recycling, which is slated to occur within the next few years. Second, several state laws govern extended producer responsibility (EPR) for various products, some of which are accompanied by disposal bans.

For example, manufacturers are required to take financial responsibility for the collection and reuse/recycling of their electronic products at the end of the product’s useful life. But not all product stewardship is mandated; companies are increasingly offering stewardship options for their products to customers on their own accord. Voluntary product stewardship allows companies to define the terms themselves – at times by collaborating with their competitors – and find the best business model for doing so.

Third, in his vision for the city, One New York, Mayor de Blasio calls for the development of “an equitable blueprint for a Save-As-You-Throw program to reduce waste.” While EPR programs incentivize producers to make products that are longer-lasting, higher quality, and made from recovered/recoverable materials, a Save-As-You-Throw program might incentivize consumers to buy longer lasting products to offset disposal costs.

3. Collection programs

In addition to curbside recycling, collection program that target specific materials, like organics, electronics (e-cycleNYC), textiles (re-fashioNYC), reuse programs (ReuseNYC), and household hazardous waste (SAFE Events) help to recover materials that might otherwise follow the linear path to the landfill. Together, these programs provide a systemized way to reintroduce unwanted “waste” materials back into markets as renewed products or raw commodities.

4. Procurement

Environmentally preferable purchasing (EPP) sets minimum environmental standards for the products that agencies, companies, and organizations can buy. Like many EPP rules, purchasing standards in NYC government address energy and water efficiency, hazardous materials, and recycled content. Any purchase or contract meeting minimum price thresholds must abide by a precise set of environmental rules. EPP policies are a simple tool that any entity can implement. With examples like reprocessed latex paint, minimum recycled content for paper and plastic goods, energy efficient appliances, and minimum warranties, EPP provides a direct demand for closed loop systems and products.

5. Long-term processing contracts

NYC leads a 20-year contract with Sims Municipal Recycling for the processing of recyclables collected from NYC’s residents, agencies, and institutions. While specific and not feasible in all situations, the tactic of entering into a long-term contract with a materials processor can guarantee the viability of a recycling or recovery program by bringing financial stability to a marketplace notoriously characterized by fluctuating commodity prices and market volatility.

As we have seen of late, recycling is not a self-sufficient business with the luxury of relying on the revenue from commodity sales alone. Instead, recycling programs are a public service that must be treated and funded as such. Long-term contracts that pre-define cost and revenue sharing agreements serve to mitigate financial risk while also providing the industry with the material supply assurance it needs to invest significant upfront capital into infrastructure development23.

Enterprises
Social and green entrepreneurship is considered as one of the main engines playing a relevant role within the complex systemic process enabling a more Circular Economy. Its key drivers, the social and green entrepreneurs, accelerate the transition anytime they convert their ideas into feasible and viable enterprises. The core business of their enterprises is mostly environmentally and socially oriented rather than purely economic. They offer products or services to reduce environmental impacts and create social values using innovative, effective and efficient business models and natural resources. Their work concentrates on sustainable sectors such as renewable energy, waste management, recycling, organic food or eco-tourism24.

In general, circular economy is a great opportunity for SMEs. However numerous barriers can hamper the implementation of ‘circular’ and ‘green’ economy practices by SMEs that can originate, for example, from the SME enabling environment, such as culture and policy-making, from the market chain in which the SME operates, such as behaviour of suppliers, and from lack of technical skills and finance. One key barrier was found to be a lack of technical and managerial knowledge, skills and information, including on the usability of new business models. This limits the options for SMEs to adjust to a circular economy as new or adopted ways of doing business may not be known or staff may not be able to (easily) pursue new activities.

In addition, a lack of long term scenarios in the top management’s mind-set – which may result from a lack of time, lack of awareness of the relevance of a circular economy or aversion to change – may also hinder the implementation of a circular business model, including insufficient retirement planning for succession among business executives. Furthermore, the organisational structure and culture of an SME may limit the exchange of information between different departments, e.g. between accounting, marketing and engineering. Thus, relevant opportunities may go untapped or the SMEs response mechanisms may be too slow to exploit opportunities. Furthermore, lacking access to funding and high up-front investments costs vs. long-term pay-back times puts a brake on SMEs’ ability to ‘greenovate’ (Rizos et al., 2015).

Civil society

The development of a circular economy allows citizen-consumers to have access to better quality eco-designed products. Sustainable sourcing and local distribution channels lead to better traceability of products, especially food, with significant environmental and social benefits (local economy, jobs, health, etc.).

In addition to environmental benefits, extending the life of products makes it possible to limit citizens' expenses and benefit from additional sources of income by selling their goods second-hand. Social economy structures specialized in reuse and donation platforms help optimize the use of resources while generating significant economic and social gains.

The functional economy proposes reforming the dominant sales model by disconnecting consumption from ownership. Such a model allows citizens to break away from the purchasing process and all its related imperatives such as maintenance, storage, repair and end-of-life. Providing use as an integrated service is a win-win situation: the producer obtains consumer loyalty and saves on resources; the consumer no longer buys the product but pays only for its function and performance.

Setting up local collaborative consumption networks reduces the costs of acquisition and use of the products while encouraging social cohesion among citizens25. But the main lever to move citizens to the circular economy is education, starting with schools. So, new generations can apply good practices in the circular economy as naturally as possible.

The role of financial/economic system

The Quintuple Helix Innovation Model should consider also financial/economic system as Carayannis and Kaloudis write. This area requires ‘sustained action’, political and economic leadership’ or ‘empowerment’, and ‘intelligent use of technology’. The area of financial and economic system refers to financial and economic aspects of the effects of climate. The following question arises: how should the two systems effectively change or adapt with-each-other in order to reduce or exclude crises in consequence of climate change (see for example: Barbier 2009; Barth 2011a; Green New Deal Group 2008; Hufbauer et al. 2009; Meyer 2008; OECD 2010; Sen 2007)?

The economic system comprises industry, banks and services and the political system represents the public authorities and their plans, laws, ideas and so on. The five helices work as “subsystems” in which knowledge moves from subsystem to subsystem in a circular manner. If knowledge is input into one subsystem, a process of knowledge creation leads to new knowledge or innovations. That does not mean that the fifth helix is an actual actor but rather a driver for new knowledge and innovations in response to environmental challenges (Carayannis et al., 2012).

Business models to make SME’s circular businesses a reality

The stakeholders work together, each with its role in the application of the circular economy. To do this, however, requires business models. Below we list five business models that allow SME’s circular economy to become reality.

1: products as services

In products as services, goods vendors embrace the idea of themselves as service providers: leasing access to and not selling ownership of a service. In some cases, this has led not only to an effective hedge against cost volatility but also to a stickier customer relationship and increased upsell. Vodafone’s Red-Hot plan is a good example. You can rent the latest phone for a year and keep on exchanging it for a newer version. Assuming Vodafone is engaged in collecting the old phone, not only does this act as material collection and pooling but from a business standpoint also creates deeper customer relationships.

2: next life sales

Next life materials and products work when a company can efficiently recover and re-condition its products after use and then put the same products into the market to earn a second or third income. Tata Motors Assured is a good example here. It’s more than a second-hand car dealership. Cars are handpicked and refurbished in Tata workshops and then undergo a certification process. Customers are even offered financing options and warranty.

3: product transformation

Not all products can be reconditioned in their entirety but most products have certain components that carry a high value. Not just products, but often materials themselves have an embedded energy component that makes them even move valuable then their virgin source. With the right design and remanufacturing capabilities, they can be put together to form new products. This is product transformation. For BMW, it can mean a 50% cost saving for customers buying remanufactured parts as compared to new ones. You get exactly the same quality specifications as a new BMW part subject to the same 24-month warranty.

4: recycling 2.0

Not to be forgotten is that innovation in recycling technology (Recycling 2.0) is rapidly evolving and enabling production of high-quality products with fantastic sustainability performance. Starbucks, for example, is actually aiming to turn thousands of tons of its waste coffee grounds and food into everyday products by using bacteria to generate succinic acid which can then be used in a range of products from detergents to bio-plastics and medicines.

5: collaborative consumption

Lastly, social media exchange platforms are rapidly transforming industries by collaborative consumption. Airbnb (the online service that matches people seeking vacation rentals with hosts who have space) now has over 200,000 listings in 26,000 cities. Check out ThredUP the next time you need new clothes for your kids, you can browse like-new clothing at significant reductions from families whose children have outgrown their old clothes. Of course, moving to a truly circular economy could require a mixture of all these five business models and a great deal of product and service innovation. Consumers and policymakers have a significant role too. But what these business models demonstrate is that it is possible to rethink how we make and use things. The companies that are starting now may well define the future of sustainable business, enabling global prosperity on a crowded planet with finite resources26.