Wednesday, 5 April 2023 at 16:00-17:30 MS Teams

A presentation by Department of Business Administration, TalTech.

DOI: https://doi.org/10.11590/taltech.circular.economy.report.2021

The circular economy aims to create a circular system of production and consumption with the lowest possible losses. This involves managing resources more efficiently, creating more value from them and generating less waste. At the same time, a more resource-efficient circular economy will require changes in attitudes and behaviour of businesses, consumers and society, as well as in decisions and support at national level.

The purpose of the study was to find out CE business models for four industrial sectors (computer & electronics, chemicals, electric equipment and metal industry). These models are expected to be suitable for applying to already existing Estonian SMEs, still operating mainly according to the linear economy principles or applying CE to a small extent, depending on the specifics of each studied industrial field. In addition, the aim was to identify the enablers and barriers for the transformation of existing SME business models into CE compatible business models and also to identify factors that require state intervention and support.

The understanding of circular economy (CE) used in the study stems from the theoretical model developed by the European Environment Agency's report Business Models in a Circular Economy (EEA Report, 2021). This analytical framework describes the CE life cycle, in which a product or service is divided into five phases: materials, product design, production & distribution, use and the final phase (end-of-life). For the each of the mentioned phase, it is possible to distinguish different levels, i.e. internal and external factors (business model innovation, technological innovation, social innovation, political factors, educational or behavioural change) and their elements, including enablers and barriers.

A survey of was conducted among SMEs of the four industries (n=440), using an online questionnaire based on the document analysis and on theoretical models, statements and scales from existing studies (EEA report, 2021; Moraga et al., 2019; Nuñez-Cacho et al., 2018; Valliant et al., 2018).

This study on the uptake of circular economy practices by Estonian SMEs concluded that there are a number of circular economy practices that enterprises are already implementing. In addition, there are also practices that are of high interest for future implementation. However, investment in circular economy technologies is mainly ad hoc and future increases in investment were also considered rather unlikely. Practices such as voluntary eco-labelling, quality labels on recycled products, participation in green public procurements and the use of financial mechanisms to introduce circular economy practices were seen as factors for accelerated development. The main challenges in implementing circular business models and their elements were seen both in terms of their low strategic priority and, in some cases, a lack of know-how.

As a general pattern, the expansion of different social innovation practices was also seen as necessary - including closer cooperation with customers, green NGOs, universities and local authorities. Again, low priority of activities, lack of expertise and lack of partners were seen as obstacles.

The study was carried out at the end of 2021 by Tallinn University of Technology on behalf of the Ministry of Economic Affairs and Communications.

Wolfgang Gerstlberger CV in ETIS

Merle Küttim CV in ETIS

Tarmo Tuisk CV in ETIS

Ulrika Hurt CV in ETIS

Tarvo Niine CV in ETIS

Tarlan Ahmadov CV in ETIS

Margit Kull CV in ETIS

Jana Liiv

Anastassia Andrijaškina

Jekaterina Bavõkina

Hanna Pentsa

The seminar is in English. Further information: pia.riips@taltech.ee.