Towards sustainability? Forest-based circular bioeconomy business models in Finnish SMEs

In line with the Sustainable Development Goals of the UN 2030 Agenda, the circular bioeconomy concept is gaining greater political momentum and research interest. A circular bioeconomy implies a more efficient resource management of bio-based renewable resources by integrating circular economy principles into the bioeconomy. These ideas have been well received at industry level since they are deemed to foster cost reductions, innovation and competitiveness. While recent scientific literature has dwelt on sustainability-related circular business models, empirical research on company-level implementation is only just emerging. Our study contributes to addressing this research lacuna by seeking answers to two questions: 1. How do small and medium-sized enterprises (SMEs) propose, create and deliver, and capture value through circular bioeconomy business models?; and 2. What are the business challenges and opportunities related to the operationalization of such business models? To this end, we employed content analysis on interview data gathered from managers in Finnish SME companies from the field of packaging, textiles, composite materials, cosmetics and pharmaceutical products. We outlined the main business model archetypes, and identified the key characteristics that enable value capture and delivery for various stakeholders. The contribution of this study is duly two-fold. From the perspective of a theoretical contribution, we expand and refine the conceptualization of sustainable circular bioeconomy and related business models. In addition, based on our findings, we provide insights and recommendations for researchers and policy-makers to advance the sustainability transition to a circular bioeconomy in the context of the forest-based industry, and for the management of SMEs to reflect on company viability and growth.