Understanding circular economy transitions: The case of circular textiles

Denise Reike, Marko P. Hekkert and Simona O. Negro

Business Strategy and the Environment, 2023, vol. 32, issue 3, 1032-1058

Abstract: The circular economy has been proposed to transform global textile supply chains which are currently challenged by a complex nexus of sustainability issues related to the dominant fast fashion trend. Research on circular economy in the textile sector often focuses on businesses or consumers as key enablers in circular transitions, yet it treats them as independent entities and thereby neglects the study of interactions that can provide insight at the systems level. The proclaimed “circular textile mission” in the Netherlands setting a national target for 100% circularity by 2050 is used as case study to address this research gap. We explore the circular textile transition processes found in the context of the Dutch mission and compare the development and interactions among various technical and non‐technological solutions produced by engaged actor constellations for assessing key factors driving and blocking the overall mission fulfilment. To these ends, we derive a theoretical framework based on innovation system theory and conceptualize the Dutch circular textile transition as a Mission‐oriented Innovation System (MIS). Analyzing the structure and functioning of the Dutch mission‐oriented innovation system, we show that (1) there is a good match between the formal Dutch circular textile mission and system actor perceptions; (2) system actors have formed structures around three dominant solution trajectories in the Dutch system: secondhand, mechanical recycling, and chemical recycling; (3) these trajectories expose distinct key virtuous and vicious cycles, which characterize (4) the entire system as formative. Overall, the secondhand trajectory shows most developed structures and most positive dynamics, chemical recycling carries most technological breakthrough potential, whereas mechanical recycling is a mature technology but lacks market demand and supply. We compare the three solution trajectories, discuss the disruptive nature of the Dutch circular textile transition, and suggest installing Extended Producer Responsibility (EPR) as a potential intervention for accelerating system transformation. The study concludes with reflections on the case learnings and considerations for further research on mission‐oriented innovation systems.

Date: 2023
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