1. Introduction
Circular economy (CE) is an alternative to the open and linear business model, which is replaced by a closed loop of material flows, creating return cycles: resources–products–resources. The growing popularity of the CE concept results from the deteriorating condition of the natural environment and, consequently, from the necessity to search for production and consumption methods that are less dependent on depleted natural resources and reduce the negative impact on the environment [
1,
2,
3]. Among the growing number of theoretical studies on the implementation of the CE concept, two research perspectives can be identified, which can be considered top-down and bottom-up. The top-down approach emphasizes the leading role of political and social initiatives in the context of CE implementation [
4,
5,
6,
7,
8], while the bottom-up approach assumes the priority of actions taken at the enterprise level [
9,
10,
11]. Researchers note that the environment is a public good, hence the environmental benefits (or costs) resulting from the activities of enterprises are derived (or incurred) by the entire society [
12]. This is a reason why practices implemented by enterprises are so important and consist of offering products made of less hazardous substances; offering products that can be easily repaired, modified and reused; and using innovative recycling technologies or implementing sustainable business models [
13]. Such activities of enterprises are the basis of sustainable development and present the opportunity to achieve some goals of sustainable development (SDGs) [
14].
Stahel and Börlin pointed out that companies applying the concept of circular economy can achieve higher profitability than their competitors in a linear economy [
15]. According to World Economic Forum, “companies are poised to make an additional
$4.5 trillion in profits by 2030 just by using circular economy models. If we do not put this idea into practice, it will not only mean a waste of resources that we throw away as garbage, but also an under-utilization of natural resources, products and fixed assets” [
16]. Similarly, the European Commission points out that a closed-loop economy approach will bring huge benefits not only ecologically but also economically [
17]. The communication states that: “By 2030, the European Union could record a 30% increase in productivity with the transition to a circular economy, which would simultaneously influence job creation and GDP growth” [
18]. A closed-loop economy system makes it possible to preserve the added value of products for as long as possible and to eliminate waste completely, thus saving raw materials. It involves closing the life cycle of products, where the product does not end up in the bin or landfill at the end of its life but is reused through recovery and recycling. This concept also applies to in-production recycling and so-called waste exchanges. An important element of this concept is effective product design. The design assumes that the final product should have the least possible impact on the environment throughout its life cycle and a smaller negative effect after its use (design in terms of increasing the efficiency and productivity of products-maintenance, reuse/multiple use, refurbishment/remanufacturing, and recycling) [
19,
20].
De los Rios and Charnley state that the greatest challenge for enterprises in the context of CE implementation is the development of circular business models that promote sustainable use of resources and reduce dependence on critical resources [
11]. Reducing the dependence of enterprises on critical resources may provide a strategic advantage and also increase their resistance to material shortages and price volatility [
21,
22]. The design process of circular business models promoting new forms of consumption (i.e., product-service systems or consumer-consumer systems) [
23,
24,
25] is based on: (1) using renewable energy sources and reducing the total energy content of products and services, (2) minimizing product waste through selection of appropriate materials, (3) designing disassembly options for products to facilitate recycling and striving to standardize solutions whenever possible and (4) maximizing flexibility by designing long-life products that can be easily repaired or modified [
13,
26,
27].
The article focuses on important areas of managerial practice: business models and circular economy. This economy is no longer only participated in only by the most conscious enterprises. Modification of business models towards circular economy is becoming a necessity that will allow entrepreneurs to create new opportunities. A question arises: ‘How do enterprises cope with the implementation of circular business models?’ Reports indicate that very few companies have managed to transform their activities by adjusting them to the CE principles [
23,
28,
29,
30,
31]. A literature review indicates a research gap regarding the design of circular business models in the SME sector. The concepts for designing and implementing circular business models are very numerous and diverse. Most of the research relates to a specific type of circular business model, its specifics and its context, very often are based on examples of large companies. Furthermore, these models are linked to different thinking methods underlying the concept of circular economy [
32,
33,
34,
35,
36,
37]. Literature also indicates numerous adoption factors as well as design and management tools for circular business models [
38]. This may explain the difficulties with implementing these models into business practice. Therefore, it is justified to conduct research on determining the level of organizational skills of enterprises proving the degree of their preparation to implement the principles of circular economy. The objective of the study is to assess the organizational maturity of enterprises in terms of implementing the assumptions of circular economy. The research was carried out on a group of small and medium-sized enterprises, due to their importance in the economy and the assumption that these entities have particular difficulties in implementing CE principles (due to limited organizational and financial resources). The concept of organizational maturity levels of the capability maturity model integration (CMMI) [
39,
40], classification of circular business models according to R2Pi (Horizon 2020 program) [
41] and the business model canvas [
42,
43] tool were used. Based on the above maturity index of the circular economy, a business model was designed (BMMI
CE). The classification of circular business models according to R2Pi was considered the most useful in business practice because of its simplicity. It was also assumed that it is the most commonly used for business model design by companies.
The research allowed one to formulate important conclusions about organizational maturity in terms of implementing CE principles into business practice. It showed, above all, that the state of the level of knowledge about circular economy among enterprises is unsatisfactory, including low environmental awareness and the lack of qualifications or skills necessary to redesign existing models into circular business models. This is why implementing circular economy business models is not a common activity. The necessity to develop practical tools supporting enterprises in this area was also identified. The business model canvas is a good example. It is a tool commonly known and used in business practice that can be helpful in implementing CE principles.
3. Research Methodology
The objective of the study is to assess the organizational maturity of enterprises in terms of implementing the assumptions of circular economy. Maturity is understood as a state of achieving full development or a state of readiness of the enterprise to take specific actions [
40]. The concept of capability maturity model integration (CMMI) was used, which enables incremental improvement of a selected area of processes [
74], in this case the implementation of circular economy assumptions by enterprises. For the purposes of the study, five levels of organizational maturity were characterized, the basic assumptions of which are presented in
Table 4.
Based on the CMMI model, the business model canvas and literature review regarding the classification of circular business models maturity index of the circular economy business model was created (
BMMICE). Each of the 9 business model canvas elements (which include value proposition, key activities, key partners, key resources, customer segments, channels, customer relations, cost structure and revenue streams) was assigned to the assumptions of the circular economy models according to the R2Pi project (
Table 5). Based on the general level of perception of the circular economy model maturity (Business Model Maturity Indicator,
BMMICE) the enterprise was designated as the arithmetic mean of the results obtained in the nine areas of the canvas.
where
x—response value in each canvas element and to the question
j, where
j = 1.k—the number of questions on the canvas element, and
n = 9 canvas elements.
The presented empirical research included surveys that were carried out from November 2020 to February 2021 using the interankiety.pl platform among a group of 99 enterprises operating in the small and medium-sized enterprise sector. (The request to participate in the research was sent to 180 enterprises, and 121 entities completed the questionnaire. Due to the completeness of the information provided, 99 questionnaires were included in the study). For the purpose of achieving the goals and verifying research questions, two subgroups of enterprises were indicated according to the age: enterprises operating for less than 3 years and enterprises operating for more than 3 years. The survey questionnaire consisted of personal questions, and closed questions with a 5-point Likert scale for assessing individual elements of circular economy, circular business models and organizational maturity. Small and medium-sized enterprises were invited to the study due to their key importance in the economy. Moreover, it was assumed that these enterprises may have difficulty adjusting to the CE rules, due to limited organizational and financial possibilities. The primary variable in the selection of entities for the research sample was the location by region, i.e., the northern sub-region of the Śląskie Voivodeship, and cooperation with an academic center (Częstochowa University of Technology).
4. Results and Discussion
Ninety-nine enterprises participated in the survey, including 43.44% operating for no longer than 3 years. Among the remaining 56.56% of the respondents, 47 enterprises had been operating for over 3 but less than 10 years and 9 enterprises for over 10 years (
Table 6).
As indicated in the results of the study, altruistic and pragmatic motivations can be listed among the conditions for implementing solutions in the circular economy trend. The first ones result from the entrepreneur’s belief in the rightness of the idea and satisfaction with the actions taken, and the awareness that these actions have a positive and long-term impact on the environment. They were indicated by only 11% of the respondents. Pragmatic motivations resulting from the issue of legal coercion or the desire to achieve business benefits are decisive when it comes to implementing solutions from the area of circular economy (89%). The surveyed enterprises are aware of their impact on the environment. Regardless of the type of motivation, it is important to note that the majority of enterprises (91%) indicate that they undertake activities limiting negative impact on the environment, including 13% of respondents declaring the implementation of circular business models, and 9% do not take any measures to reduce the negative impact on the environment. The most important reasons for the above are the costs of implementing eco-friendly solutions (86%) and the lack of sufficient knowledge about technical and/or technological solutions limiting negative impact on the environment (12%).
The research results also indicate a competency gap in the area of circular business models. As it has already been mentioned, only 13% of the surveyed companies declare the use of a circular business model. Knowledge barrier results from the fact that shifting the business model to circular economy requires highly qualified staff (45%) and knowledge about what solutions can be implemented (53%). Deficiencies in this area effectively block the concept of circular economy both at the stage of initiation and implementation, and most of all, in the creation of new business models. Small enterprises have the greatest difficulty when it comes to adapting to trends due to the fact that this is associated with a proportionally greater effort in both financial and organizational terms (this was indicated by 76% of respondents from the group of small enterprises).
The circular business models declared by the surveyed companies include circular raw materials, raw material recovery, modification and repair. Out of the group of 13% of enterprises that apply a circular business model in practice, half declared that they started operating with a circular business model, and half of them modified their business model in line with the circular economy assumptions.
Most of the surveyed companies (84%) know the business model canvas, and 57% used this tool when developing a business idea as a template for a business plan. This was associated with applying for funds and resulted from institutional requirements. Twenty -seven percent of enterprises used the services of business incubators, among which the use of a business model canvas template is common. On the other hand, in the group of companies that declared that they use circular business models, i.e., in the group of 13 companies, 5 used the business model canvas to redesign their business model towards the circular model. This group unanimously expressed a positive opinion on the possibility of using the above tool in building business models in line with the assumptions of circular economy.
Despite the small group of enterprises that declared the use of a circular business model, it can be concluded that the surveyed enterprises undertake actions that constitute elements of business models in line with the circular economy trend.
Table 7 presents the results of the BMMI
CE index in total for all surveyed enterprises and for the selected subgroups in nine areas of the canvas. As predicted, with the age of the company, the mean and median of the business model maturity index increase, while the variance reflecting the variation in the sample decreases.
Comparison of BMMI
CE values in nine areas of the canvas show higher mean BMMI
CE values in every area, except for key resources for companies operating for more than 3 years than for companies operating for less than 3 years. The results obtained indicate that the importance of circular economy elements in the business model increases with the age of the enterprise. On the other hand, the differences in the area of key resources result from the advantage of young companies, primarily in the use of energy from renewable sources, energy-saving technologies, raw materials and/or materials with better technical parameters in terms of environmental impact. In the group of young companies, the importance of knowledge, team experience and flexibility is also more strongly emphasized in order to adjust the business model to the requirements of circular economy (
Figure 1). This group of enterprises also indicated lower risk aversion in modifying the business model.
The following are of the highest importance for the surveyed companies: the use of recycled raw materials, the use of raw materials and materials with better technical and/or technological parameters, energy-saving production/provision of services, use of renewable energy sources, production looping, elimination of waste, extended product life, use of virtual channels in customer relations and knowledge and skills of employees (
Figure 1). The above activities are characteristic of such circular business models as: circular sourcing, re-condition, re-make and resource recovery. Thus, they are related to the production process and the last stage of the product life cycle.
The least important in the daily activities of the surveyed companies are: sale of product features, virtual product and the related subscription fees, reuse of a part of the product, cooperation with partners under the collection and/or recovery program of end-of-life products, the implementation of individual orders and the use of waste from business as a resource for partners (
Figure 2). These activities are characteristic of such business models as: access, resource recovery and co-product recovery. It should also be noted that the importance of the above elements of circular economy in the business model increases with the age of the enterprise.
The surveyed enterprises in terms of organizational maturity in the area of circular economy are mainly characterized by the level of L2, L3 and L4 (
Table 8). The largest group is composed of enterprises that are familiar with the assumptions of circular economy, as evidenced by altruistic motives to reduce the negative impact on the environment. At this maturity level (L3. Defined), enterprises have qualified employees in the studied area at their disposal. Activities that are compliant with the principles of circular economy mainly relate to the production and cooperation with business partners regarding the green supply chain and waste recycling. Enterprises have implemented an environmental management system that, although informal, causes processes in the environmental aspect of operations to be identified and improved.
At the level of L4. Quantitatively Managed, company managers do not have a business model developed according to the circular economy guidelines, but in their activities they commonly apply activities in such areas as: closed-loop supply chain, recovery and recycling, LCA concept and increasing product efficiency and performance. The activities undertaken in this area mainly include production, product life cycle and its use. Among the employees, there are qualified people responsible for the area of environmental management. This converts into implementation of the environmental management system. In most cases, it is informal, i.e., uncertified, but it proves that the environmental aspects of operations are included in the process management criteria. The next largest group is composed of enterprises at level L2. Managed. Most of the processes for the area of environmental activities are identified and defined. To a greater extent, these activities are understood in the category of reducing the negative impact of activities on the environment, as opposed to the category of circular economy. The level of knowledge in this area is low. The motivation to reduce the negative impact on the environment is mainly pragmatism, i.e., compliance with standards, legal regulations and avoiding environmental fines. Enterprises monitor the key environmental impact indicators, including in particular costs. The smallest number of surveyed enterprises can be characterized by the lowest level of maturity, i.e., L1. Initial. These enterprises often do not even take steps to reduce the negative impact on the environment, and if so, for pragmatic reasons, the processes in the studied area are neither identified nor measured. Lack of knowledge about the assumptions of circular economy and the business models dedicated to it are further characteristics. The highest level of maturity, L5. Optimizing, is presented by 13% of enterprises. These are enterprises with an implemented circular business model. They have a high level of knowledge about circular economy. This group includes enterprises that stand out from the rest by implementing reverse logistics, designing virtual products/services and selling product features. Enterprises are aware of their shortcomings, but they improve their activities continuously through processes monitoring in terms of possible improvements.
The results obtained allowed one to find answers to all research questions (Q1–Q4) and to formulate conclusions, which, unfortunately, are moderately optimistic. First of all, the use of circular business models is not a common practice. The reason for this is the unsatisfactory level of knowledge of enterprises about circular economy and its business models. When it comes to small enterprises, this is mainly due to limited organizational and financial possibilities. Knowledge also converts into environmental awareness, which can be divided into two levels: awareness of the impact on the environment and awareness of circular economy. The majority of the surveyed enterprises are aware of the negative impact on the environment and therefore take measures to reduce this impact. Nevertheless, it cannot be ignored that they do it chiefly for pragmatic reasons. What is very surprising in the face of contemporary global challenges is the disregard for environmental protection by some enterprises. The companies operating on a circular model in Europe have a number of advantages at the micro and macro levels. Shpak et al. point to the opportunity to influence the cost of production by reducing the cost of raw materials. As a result, both sales volume and productivity can increase. the shift to a circular production model will enable businesses to further reduce their tax burden, as tax rates are projected to increase for businesses that do not use resource- and energy-efficient methods [
17].
The use of circular business models as a well-planned strategy of action is rarely practiced. Enterprises most often use selected activities characteristic of circular economy, e.g., elimination of waste from business activity and in the supply chain, production looping, energy-saving activities, use of raw materials or materials with better technical/technological parameters or recycling. Most enterprises that implemented circular business models used the classification proposed by R2Pi. This constitutes a confirmation of assumptions that the above classification of circular business models is most useful in business practice due to its simplicity. The circular business models declared by the surveyed companies include circular raw materials, recovery of raw materials, and modification and repair. It was also confirmed that the business model canvas is a tool popular in business practice, both in the case of setting up a business and its redesign. The above justifies its use also for building circular business models. Its great advantage is versatility, which makes it possible to be used by any company or organization, regardless of the industry or size.
In summary, the implementation of circular business models is not widely practiced. This is mainly due to the competence gap in circular business models. The main barrier is the lack of knowledge and qualified staff. Shortages in this area effectively block the idea of CE both at the stage of initiation and implementation, and above all in the creation of new business models. Small businesses have the greatest difficulty in adapting to trends due to the fact that for them it involves proportionally more effort in both financial and organizational terms. Undertaking pro-environmental actions by companies is dictated mainly by pragmatic motivations. Assessment of the level of enterprises’ achievements in implementing the principles of circular economy indicates the average level of maturity of the surveyed enterprises. First of all, the importance of circular economy components in the business model increases with the age of the enterprise. Key resources dominated by younger enterprises are an exception here. More often and to a greater extent, they utilize energy from renewable sources, apply energy-saving technologies and use raw materials and/or materials with better technical parameters in terms of environmental impact. In the group of young companies, the importance of knowledge, team experience and flexibility in action is also more strongly emphasized in order to adjust the business model to the requirements of circular economy. This group also exhibits a lower risk aversion in modifying the business model. Circular business models are used by companies at the highest level of maturity. The formulated conclusions are not optimistic. Adapting the activities of enterprises to the assumptions of circular economy becomes a must. Meanwhile, small businesses, which make up a decisive proportion of economic actors, are not coping well with this challenge. Therefore, it is important to provide and disseminate tools to assist them in implementing CE principles. An example of such a solution is the business model canvas. An example of such a solution is the business model canvas, which is also confirmed by research of Gomes et al. [
75].
The results of the study are in line line with some of the conclusions of other scholars dealing with the topic, like Frishammar and Parida [
76], Czikkely et al. [
77] and Nuβholz [
78]. In addition, one should also add that to some extent the results obtained are in line with the findings of Szczepańska-Woszczyna i Kurowska-Pysz [
79], who state that the idea of sustainable business development in Polish SMEs is still in the development phase (it influences the implementation of CE principles), and of Diego and others, who researched the entrepreneurial approach to achieve societal and environmental goals [
80]; some problems may still limit or discourage a CE approach, mainly companies being small [
81,
82], the analysis of the process and role of business model experimentation [
83].
6. Conclusions
When it comes to designing circular business models, multiple concepts and classifications of models as well as guidance for business activities related to circular economy have been identified in literature. Most of these are case-based studies, and this translates into limited applicability in other companies. Nevertheless, there are very few universal concepts that would support practitioners in adjusting their activities the circular economy needs. One of them is the proposal to use a business model canvas to design circular business models [
32]. There is a lack of elaborations that would show the scale of practical use of circular business models by enterprises. As it has already been mentioned, cases of individual enterprises are presented, but the level of organizational skills of enterprises to implement the circular economy principles is not specified. This provides grounds for conducting research on the above-mentioned issues, all the more so as the modification of business models towards the idea of circular economy is a necessity and will cause entrepreneurs to have new opportunities in place of some lost opportunities.
Implementing circular economy solutions is a multi-threaded issue. Among others, it is associated with the involvement of often significant technical and financial resources, change of business models or the need to develop competences (including personnel dealing with implementation). Due to the above, the processes of implementing solutions in the area of circular economy are subject to the impact of a number of conditions, both favorable and difficult, for their implementation. The study indicates significant barriers. One of the factors that makes it difficult is the high level of variation in classifying circular business models. Another barrier is the competency gap resulting from the low level of knowledge about circular economy. Consequently, this results in an average level of maturity of business models in the area of implementing the assumptions of this economy. Other challenges in the process of CE implementation cannot be ignored either. These are: the level of awareness not only of companies but also consumers and public administration; the pace of changes; legislation and system solutions (the need to create and properly implement appropriate legal regulations); economic conditions (the cost of new, innovative technologies, often of low profitability, and the possibility of optimizing the costs of sustainable solutions in business). Important barriers to the implementation of CE rules are the lack of mechanisms to promote and support good and quality products. Activities to introduce CE should be carried out in parallel-from education, through cooperation with business at different levels, to solve legislative/systemic problems. The motivation for which circular business models are implemented is very important. It largely determines how and whether a business deals with the mentioned obstacles.
This article contributes to the discussion regarding the implementation of circular economy and indicates the need to popularize tools to assist practitioners in the transition from linear to circular models, such as the business model canvas. It also draws attention to the need of continuous monitoring of trends in this respect, so that both, societies and the economy have time to adapt. One can hope, as shown by the situation related to the COVID-19 pandemic, that in a very short period, we will be able to radically change our habits and behaviors, find ourselves in the new reality and learn new methods of functioning. Perhaps circular economy solutions do not have to be completely new to enterprises, or they only need an impulse to be implemented.