Circular economy models implementation in textile industry: An emerging business network perspective

In an attempt to implement sustainability, various industries introduce premises of circular economy models (CEM) to their business processes. Reasons behind it can be, for instance, demand from consumer markets development of innovation technologies that enable sustainable production, or changing business activities towards more sustainable ones in order to access resources. The principles of circular economy include the implementation of closed loop production to preserve and re-use resources, minimize waste, and promote sustainability in the environmental and social spheres. Innovative technologies aimed at sustainable business processes have caused changes in various industries including the textile industry which is conventionally listed among the most sustainability-challenging ones. Innovative solutions for the recycling of textile have already been introduced across the European Union but this industry is still in a state of emergence.
The facilitation of recycling of textile as an industrial system can require the development of appropriate infrastructure, resources and capabilities, supported by policy makers and various business actors. A company possessing a sustainable innovative technology may experience challenges if not connected to other cross-sector actors providing the infrastructure. Therefore, strategic networking of business firms is needed in order to facilitate an uninterrupted supply of resources, knowledge, innovation etc., as well as further redistribution of the recycled materials. The emerging business networks, that facilitate the recycling processes and the associated business activities, may play a key role in the development of new business fields or industries. This study addresses the issue of change in the textile industry through the implementation of CEM. Specifically, this study aims to develop an understanding of the role of emerging business networks for CEM implementation referring to the strategic interaction of business firms within the context of the textile industry. This study seeks to answer the following research question: What business processes and actors are of strategic importance for emerging business networks aimed at CEM implementation in the textile industry?
Conceptually, this research refers to the concept of emerging business networks, which embraces networking of business firms through which innovations, business concepts or business fields are being developed, to explore the current practices of textile recycling. Empirically, this study explores the recycling textile industry in Finland grounded on the premises of CEM and relying on business-to-business interaction in its business processes. While Finnish companies are frequently included in the top of various sustainability rankings, the Finnish textile industry still requires development in that regard and faces renewal in order to “strengthen its global reputation as a leader in circular economy” by 2035. This study contributes to the industrial marketing literature by adopting the circular economy logic for the way in which the companies manage their business activities, and it hence extends the rather scarce conceptual and empirical research on sustainability in business networks. The study also contributes to the growing field of CEM literature by illustrating how business firms implement changes in their business activities and networking to address sustainability issues.