A journey toward circular entrepreneurship: evidence from a developing country

The growing concern over climate change and global warming presents a significant threat to the planet. The United Nations (UN) has declared climate change to be the “defining issue of our time” and stated that we are at a “defining moment” (UN, 2024). In response to these challenges, entrepreneurs are increasingly adopting alternative and sustainable production and operational methods (De Angelis, 2020). One of the key sustainable strategies being utilised to address climate change is the adoption of circular economy (CE) principles. Entrepreneurs who explore and implement CE principles are referred to as circular entrepreneurs (Zucchella and Urban, 2019). However, the majority of the existing literature on entrepreneurship is grounded in the linear production model, meaning that relatively little is known about circular entrepreneurship. The nature and characteristics of traditional entrepreneurial models differ significantly from those of circular entrepreneurship. This research addresses this gap by presenting a comprehensive model that integrates entrepreneurial elements within the framework of the circular economy, thereby addressing key CE issues. Hence, the primary objective of this research is to develop a circular entrepreneurship model that will guide entrepreneurs in adopting sustainable production and operational practices. To achieve this aim, the researcher poses three key questions. Firstly, what are the antecedents, elements, and outcomes of circular entrepreneurship? Secondly, what paradoxes do circular entrepreneurs encounter when adopting CE principles, and how do they resolve these paradoxes? Lastly, how do dynamic capabilities assist circular entrepreneurs in transitioning from a linear economy to a circular economy? These three fundamental questions form the basis of three separate papers, presented in Chapters 2, 3, and 4. Previous research on circular entrepreneurship was sporadic and addresses business model perspectives only (Cullen, and De Angelis, 2021; Brown et al., 2021; Fidan et al., 2021), and significant lack of providing a comprehensive model. However, this study provides a model (Chapter-2) that guide entrepreneurs to move towards CE and gain competitive advantages. The first paper's key finding is a circular entrepreneurship model that is structured across three levels: micro, meso, and macro. At the micro level, the model addresses a company’s mission, vision, strategies, leadership, and risk-taking, all in alignment with CE principles. The meso level emphasises the importance of building partnerships and collaborations, while the macro level takes into account regional, national, and international factors. These levels collectively guide entrepreneurs in developing business models that achieve economic, social, and environmental sustainability. Although a gap between sustainable entrepreneurship and environmental entrepreneurship has been identified (Filser et al., 2019), this gap can be bridged by developing a research model that builds upon existing studies and integrates concepts from related disciplines. The second paper (Chapter-3) identifies the various paradoxes encountered by circular entrepreneurs during their transition to a CE. Transitioning towards a CE has emerged as a critical priority for entrepreneurs, largely due to pressure from national, international buyers to adopt CE principles as a strategy to reduce carbon emissions and promote environmental restoration. There exists a gap in the literature linking CE with the concept of paradoxes, offering limited insights into the tensions and contradictions faced by entrepreneurs during this transition. Second paper provides strategies to overcome paradoxes and move towards a circular economy. Third paper (Chapter-4) seeks to examine how circular entrepreneurs in emerging economies, such as Bangladesh, can attain competitive advantage through dynamic capabilities (DC) while addressing the tensions associated with CE practices. The paper addresses a gap in the literature by applying DC theory—centred on sensing, seizing, and transforming capabilities—to the context of circular entrepreneurship. Although there is ongoing debate regarding the role of DC in achieving competitive advantage (Helfat et al., 2007; Teece, 2007), this research aims to provide empirical evidence on how circular entrepreneurs can navigate environmental challenges and secure a competitive edge through DC. The core question focuses on solving how these entrepreneurs can leverage DC to overcome CE-related tensions and gain a competitive advantage (Helfat et al., 2007; Teece, 2007). The paper provides entrepreneurial strategies in sensing, seizing and transforming of DC.