Advancing the circular economy through dynamic capabilities and extended customer engagement: Insights from small sustainable fashion enterprises in the UK

Journal Paper by Patrick Elf, Andrea Werner and Sandy Black
Business Strategy and the Environment | February 2022

Summary

The circular economy holds the potential to significantly reduce resource use. However, attempts to fully utilize its potential have fallen short so far. Building on a longitudinal interview-based study, the authors examine how micro, small and medium enterprises (MSMEs) in the UK fashion industry advance the circular economy (CE).

Whereas the dynamic capabilities framework is mostly used for medium and large businesses, the findings of this paper advance the current literature, demonstrating how the distinctive development and use of dynamic capabilities enable MSMEs to act in agile ways, allowing them to introduce, test and advance CE solutions, while providing them with more resilience during times of crises.

This study further shows that fashion MSMEs adopt circular economy business models (CEBMs) by going beyond conventional, technology-focused approaches currently dominating business thinking. The research highlights MSMEs’ ability to engage in circular practices through an extension of existing business models in the form of close interactions with their customers demonstrating the importance and potential of extended business-customer engagement in businesses’ attempts to adopt CE practices.

Further Reading