Unveiling the rules for creating circular business ecosystems: A case study in the chemical industry

Moving to a circular economy (CE) is crucial for achieving sustainability. However, many industries face challenges to make the transition. Industries function as complex systems, encompassing multiple business ecosystems (BEs) influenced by a myriad of market forces. Due to the absence of a single point of control, the evolution of industries and their BEs can follow various paths. If transitioning to a CE is a desired outcome, understanding the guidelines and restrictions - or 'rules' - that facilitate the emergence of circular BEs within industries is essential. This research therefore investigates the transition to a CE in the chemicals manufacturing industry through the lens of BEs, system theory, and orchestration theory. A two-stage instrumental case study was conducted, beginning with focus group discussions involving a broad spectrum of stakeholders in the chemical industry, followed by the analysis of a specific circular laundry detergent BE. Our findings deepen the understanding of CE, especially within the chemicals industry, by unveiling seven system rules that govern the transition. These rules emphasise the importance of motivations, challenges, cross-sector collaborations, and BE orchestration. Furthermore, our study highlights the consumers' readiness for circular value propositions and the pressing need for both private and governmental investment to scale up. Additionally, our findings shed light on the potential for synergies between highly carbon-intensive industries in the realm of CE. Despite the complexity of managing such intricate relationships, it is argued that fair distribution of gains and burdens can sustain circular BEs in the long run, which ultimately contributes to reducing carbon emissions and mitigating climate change.