Interactions of governmental policies and business models for a circular economy: A systematic literature review

Governmental policies and business models are considered key elements for a transition to a circular economy. In current literature, there is a lack of understanding on how these two elements interact and how this understanding is used to accelerate the realisation of a circular economy. We shed light on this issue by conducting a systematic review of the literature in combination with a literature synthesis that looked in particular at interactions between governmental policies and business models not limited to a circular economy. We systematised the findings and then applied them to a circular economy context. The results show that there is a multitude of possible interactions between governmental policies and business models. The most commonly studied interaction is between command-and-control regulations and the value proposition element of business models. Soft policy measures like information- or communication-based policies or support mechanisms are less studied. Other findings suggest that there are certain types of dynamics which are useful to understand for policymakers and business model designers alike. A few examples of the synthesised insights are i) entrepreneurs may optimise their circular business models to exploit the policy framework, ii) technologies may lead to circular business model innovation forcing policymakers to adapt, and iii) policymakers may pay special attention to the needs of circular business models and support their competitiveness. Funding agencies: Circular European Economy Innovative Training Network (Circcuit) - European Commission [721909]; Mistra REES (Resource Efficient and Effective Solutions) program - Mistra (The Swedish Foundation for Strategic Environmental Research) [2014/16]