Business experimentation for a circular economy - Learning in the front end of innovation

Abstract

Business experimentation has been recognized as an important means for accelerating transitions towards a circular economy (CE). This paper aims to develop a new understanding of how learning from business experiments at the front end of innovation may help develop ideas and concepts that can advance a CE. The study adopts a case study approach and investigates four experiments conducted by a single organization in the context of recycling. The learning outcomes of these experiments are examined by using the lens of learning loops. Single loop learning refers to detecting and correcting errors in existing policies. In double loop learning underlying assumptions are questioned and new policies are formulated. In triple loop learning, entirely new processes and methodologies for problem solving are devised. We conclude that incremental ideas associated with single loop learning may be insufficient for a CE. While radical ideas associated with double loop learning may be critical for a CE, double loop learning may require designing the experiments to address CE innovation challenges. We propose that focusing on triple loop learning may be the answer, and by examining the relationships between the different forms of learning and CE innovation challenges, we determine which type of learning was best suited to overcoming these challenges. Further, this study elaborates the concept of learning loops in the context of front end of CE innovation by identifying 11 forms of learning from experiments. For managers, the study offers insights on how the experimentation process should be developed to overcome the barriers to CE innovation.