Exploring Circular and Sustainable Business Model Innovation Opportunities in Uruguay

Joan Manuel F. Mendoza^1,2, Silvia Belvisi³, Ines Vazquez Boasso⁴

¹Mondragon Unibertsitatea, Faculty of Engineering, Mechanics and Industrial Production, Loramendi 4, Mondragon 20500 Gipuzkoa, Spain.

²IKERBASQUE, Basque Foundation for Science, Plaza Euskadi 5, 48009 Bilbao, Spain.

³University of the Republic Uruguay, Faculty of Economic Sciences and Administration, Gonzalo Ramirez 1926 - CP 11200 - Montevideo, Uruguay.

⁴Technological University of Uruguay, LATU, Av. Italia 6201, 11500 Montevideo, Departamento de Montevideo, Uruguay.

(*) [email protected]

Extended abstract

The deployment of a circular economy (CE) worldwide is considered an instrumental mechanism to decouple economic growth from resource consumption and achieve the global carbon emissions mitigation targets (Leipold et al. 2022). Accordingly, the benefits and limitations of implementing micro- (products, businesses), meso- (industrial areas and sectors) and macro-level (countries and regions) CE strategies have been comprehensibly investigated in high-income countries, usually referred as the Global North. However, it remains unclear what CE solutions are (or can be) technically-, economically- and environmentally-suitable for implementation in low-income countries, referred as the Global South (GS), raising the concern if the successful European CE model under development (e.g. CE Action Plan (European Commission 2020), Green Deal (European Commission 2022)) could be replicated and adopted in these regions. This represents a relevant research gap for sustainability decision-making as many countries in the GS represents global centers for the productions of some critical materials, products and goods, and are expanding (or planning to expand) their economies, driving global resource consumption (Muchangos 2022). The latter applies to Uruguay, where the Environment Ministry has recently launched the initiative “Uruguay + Circular” to promote more sustainable production and consumption systems (Ministerio de Ambiente 2021). However, the initiative is mostly focused on waste management (prevention and valorization), instead of encouraging the deployment of more holistic CE solutions for the implementation and upscaling of circular and sustainable business models (CSBMs) and value chains (Mendoza et al. 2017, Mendoza and Ibarra 2023). Focusing on CSBMs, this study summaries the main findings from the application of a five-step framework (diving, analysing, envisioning, activating and reflecting) to identify opportunities to develop and implement CSBMs in Uruguay, based on a hands-on project with 27 groups of students (130 students) in innovation and organisational entrepreneurship from the University of the Republic Uruguay. In this process, each group of students selected an Uruguayan company (belonging to the agro-food, industrial and service sectors) to define the most relevant business strengths and weaknesses, evaluate its current circularity performance and identify potential areas for intervention to implement circular and sustainable innovations. Later on, the students were asked to revise a number of predefined CSBM typologies (or archetypes) (value management mechanisms linked to successful real-life business practices) to select those practices (or patterns) that could be relevant for implementation as-is (or through adaptation) in the analysed company. After that, students were asked to ideate further circular and sustainable solutions for the development of CSBM concepts by using a canvas, integrating the life cycle thinking perspective (raw materials, manufacturing, distribution, use and end-of-life) and the business value management mechanisms (value proposition, creation, delivery and capture). The resulting CSBM concepts and ideas were evaluated and prioritized for implementation by considering their technical-economic viability and potential impact (relationship) on the Sustainable Development Goals (SDGs) 2030. Finally, the students reflected upon the most promising transition pathways for the 27 Uruguayan companies to move from linear (or conventional) business models to CSBMs and, therefore, become more resource-efficient and sustainable and facilitate the deployment of new value chains. Consequently, this study contributes to the NBM 2023 conference theme of Collaborative and Circular Business Models in the Global South by exploring drivers and opportunities to develop and implement CSBMs in the GS and analysing some major limitations that must be overcome for their upscaling, from the approach of sustainable entrepreneurship university students.

Keywords

Circular Economy; Circular Business Models; Eco-Innovation; Global South, Life Cycle Thinking; Sustainable Business Models. 

References 

European Commission. (2020). Circular Economy Action Plan. Available from: https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en [Accessed 1st February 2023).

European Commission. (2020). A European Green Deal. Available from: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en [Accessed 1st February 2023).

Leipold, S., Petit-Boix, A., Lou, A., et al. (2022). Lessons, narratives, and research directions for a sustainable circular economy. Journal of Industrial Ecology. Early View.

Mendoza, J.M.F., Sharmina, M., Gallego-Schmid, A., Heyes, G., Azapagic, A. (2017). Integrating backcasting and eco-design for the circular economy: the BECE framework. Journal of Industrial Ecology. 21(3), 526-544.

Mendoza, J.M.F., Ibarra, D. (2023). Technology-enabled circular business models for the hybridisation of wind farms: Integrated wind and solar energy, power-to-gas and power-to-liquid systems. Sustainable Production and Consumption. (36), 308-327.

Ministerio de Ambiente. (2021). Uruguay + Circular. Available from: https://www.gub.uy/ministerio-ambiente/politicas-y-gestion/uruguay-circular [Accessed 1st February 2023).

Muchangos, L. S. (2022). Mapping the Circular Economy Concept and the Global South. Circular Economy and Sustainability. (2), 71–90.