Essential innovation capability of producer‐service enterprises towards circular business model: Motivators and barriers

Abstract

AbstractThe current linear model inherent to the linear economy within the industry cannot continue its operations due to the high contribution towards environmental damage. To address this matter, the circular economy and the circular business models as environmental solutions for organizations will be capable of bringing business profit. Unfortunately, few studies have shed light on the types of capabilities and innovation required to produce the change to circular business models since these updates will lead to significant opportunities and challenges for enterprises. Thus, this research explores the factors that strengthen and hamper producer‐service enterprises' innovation capability to implement circular business model. The study applied the fuzzy Delphi method and grey‐based DEMATEL approaches to identify the most influential factors and the casual relationships among them towards circular business model implementation within the service sector. The research results indicated 10 main drivers and barriers related to circular business model implementation based on the fuzzy Delphi method. The contributions of this study can be used as a guide for producer‐service enterprises and other parties involved in policy‐making and shed light on the applications of business model innovations in general.