Engaging in circular economy -
A case study of mo5va5onal factors to par5cipate in a non-commercial network
Master’s Thesis 30 credits
Department of Business Studies
Uppsala University
Spring Semester of 2019
Date of Submission: 2020-06-03
Laetitia Forget
Jordi Pujol
Abstract
Circular economy addresses the environmental crisis and its urge to adapt and reshape economic models towards more sustainability. Recent literature has provided rich knowledge on the concept and important conceptual research. Moreover, consequent existing research about drivers to engage in circular economy focuses on consumers and businesses but it is almost always limited to a commercial context. Therefore, the purpose of this study is to explore motivational factors to involve in a non-commercial context in circular economy.
Through a qualitative approach, the single case study of a leisure bank network was conducted in Sweden. The concept of leisure bank is to lend sport and leisure equipment like a library would lend books for free. The findings show that some motivational factors previously identified in a commercial circular economy context also apply to a non- commercial circular economy context. However, this study contributes with the improvement of welfare as one additional driver for non-commercial circular economy engagement.
Additionally, the findings revealed unexpectedly positive effects regarding commercial actors who are substantively affected by the network.
In line with this, circular economy has gained widespread interest among scholars and practitioners. This initiative to improve upon business models to cater the contemporary challenging social, economic, and environmental paradigm. Following a lead to expand research in this discipline, an empirical case study of a circular economy network is undertaken. A network based on exchange is identified as an important basis for the case and the study was undertaken following qualitative research in the form of interviews to those involved in the network. By gathering and analysing their insight, the importance of a network structure based on the exchange of resources was identified, finding that the interaction between the participants as a process which creates value in forms that contribute to an increase of welfare.
Key words: circular economy, collaborative consumption, motivational factors, resources, value creation, networks, non-commercial, leisure bank, Fritidsbanken.
Acknowledgements
We would like to thank Fritidsbanken collaborators and users for their considerable contribution to our thesis. Your knowledge and your willingness to share your insights with us made this study possible and we are genuinely grateful for this generosity. We would like to thank our supervisor, Virpi Havila, for her guidance and support along this laborious process of research. Lastly, we address our gratitude to our seminar group. We thank you for constructive discussions and feedback that opened our perspectives and your support regarding the topic we chose to write about.
Thank you all!
Uppsala, 2020-06-03
_______________________ _______________________
Laetitia Forget Jordi Pujol
1. Introduction 1
1.1 Problematisation 2
1.2 Research purpose 3
2. Literature review 4
2.1 Value creation through circular economy 4
2.2 Collaborative consumption 5
2.3 Trust, relationships and networks 6
2.4 Converging theories 9
2.4.1 Shared economy and hybrid markets 9
2.4.2 Similarities within economic philosophies 9
2.5 Analytical framework 10
3. Research methodology 13
3.1 Research strategy 13
3.2 Research design 13
3.2.1 Case description 14
3.2.2 Operationalisation 15
3.3 Data collection 16
3.3.1 Semi-structured interviews 16
3.3.2 Selection of informants 17
3.3.3 Secondary sources 20
3.4 Data analysis 20
3.5 Ethical considerations 21
3.6 Limitations 21
4. Case study of non-commercial circular economy networks 23
4.1 Fritidsbanken 23
4.2 Fritidsbanken’s network actors 23
4.2.1 Fritidsbanken and the Swedish sport confederation 23
4.2.2 Fritidsbanken and municipal political bodies 24
4.2.3 Fritidsbanken and commercial retailers 25
4.2.4 Users and Fritidsbanken 28
4.3 Life cycle of sports equipment 28
4.4 A good society and better futures 30
4.5 Value creation in the Fritidsbanken network 34
4.5.1 The role of Fritidsbanken in the society 34
4.5.2 Users, donators and contributors 35
4.5.3 The explorative journey of users 35
4.5.4 Sustainability factors 37
4.5.5 Community oriented activities and knowledge exchanging experiences 38
4.5.6 Future perspectives 39
5. Analysis 41
5.1 Fritidsbanken’s resource network 41
5.2 Values for the future 45
6. Conclusions 47
6.1 Theoretical implications 47
6.2 Limitations and future research 48
7. References 50
8. Appendix 55
8.1 Interview guide for Fritidsbanken administrators 55
8.2 Interview guide for Fritidsbanken users 57
1. Introduction
In response to the climate and environmental emergency the planet is facing, the theory of degrowth has been elaborated and suggested by ecologists, economists and social scientists along the last half century (Kallis, 2018, p. 8). Degrowth theory is defined as: “a collective and deliberative process aimed at the equitable downscaling of the overall capacity to produce and consume and of the role of markets and commercial exchanges as a central organising principle of human lives” (Sekulova et al., 2013)
The defenders of degrowth criticise that global domestic product (GDP) is used as a unique indicator of development (Nordhaus and Tobin, 1972; Borowy and Schmelzer, 2017). But GDP is argued to not measure welfare (Kallis, 2018, p. 9). Additionally, economic growth causes excess environment damages (Carson, 1962; Meadows et al., 1972) and meets social limits as it is argued to not be able to reduce social inequalities (Hirsch, 1976; Kallis, 2018, p.
9). Therefore, degrowth is argued to be the decrease of resource exploitation (i.e., energy, material, waste flows, human and animal labour) in parallel with global welfare and wellbeing improvement (Kallis, 2018, p. 9). According to authors, the end of economic growth is inevitable (Kerschner and Capellán-Pérez, 2017; Piketty, 2014; Dietz and Stern, 2015).
The remaining uncertainty regarding the end of economic growth concerns when and how it will concretely happen (Kallis, 2018, p. 74). Some scholars tried to shape what would successful degrowth be like (Latouche, 2012; Victor, 2008). Latouche (2009) created a
“virtuous circle of eight Rs” (i.e., re-evaluating, reconceptualising, restructuring, redistributing, re-localising, reducing and reusing/recycling). This model gave rise to concrete application like circular economy, also referred to as shared economy (Scaraboto, 2015) or collaborative consumption (Perren and Grauerholz, 2015). In line with the eight Rs model, circular economy “re-evaluates”, “re-localises”, “reduces”, “reuses and recycles”
production as it goes against programmed obsolescence and extends product life cycle (Latouche, 2013).
Considering the urge to reduce consumption stressed by degrowth theory, the concept of circular economy has been developed as an alternative economic model to linear economy (Ranta et al., 2018). Circular economy has arisen in recent years to pursue sustainability challenges such as overproduction and overconsumption through an intense and reiterative value extraction of resources, instead of a “take, make, and dispose” model corresponding to linear economy (Ranta et al., 2018; Tura et al., 2019). Circular economy is argued to be possible and a necessary constituent of degrowth process (Latouche, 2009; Kallis, 2018, p.
10). Aminoff et al. (2016) argue that the transition towards circular economy will need organisations to create new collaborative networks to be achieved. The actors of these networks will participate to the value creation in new ways (ibid.). Perren and Grauerholz (2015) highlight that circular economy engaged networks can be commercially as well as non-commercially developed. Non-commercially developed networks remain understudied in the circular economy literature (Bromark and Sjölund, 2019).
1.1 Problematisation
Engaging in circular economy provides benefits both to the consumers and to the organisations (Edbring et al., 2016; Tura et al., 2019). For instance, within the circular economy literature, Edbring et al. (2016) have discussed different benefits. Environmental, economic, social, political and institutional, technological and informational, supply chain, and organisational factors are motivations that have been identified to entail companies and consumers to engage in circular economy (ibid.). However, these benefits have not been utilised among non-commercial organisation’s motivations and more academical research is needed about it (Bromark, and Sjölund, 2019).
Some alternative models to commercial circular economy like repair cafés (Keiller and Charter, 2014), Freecycle and Couchsurfing (Bromark, and Sjölund, 2019) or fashion libraries (Pedersen and Netter, 2015) have been researched in the past but mainly through quantitative studies which focused on consumers. Moreover, Tura et al. (2019) pointed out that existing research in the circular economy area is mostly conceptual. Thus, they suggest that more empirical study is needed to understand how the participating actors of a circular economy network are affected by the engaging drivers (ibid.). Therefore, the aim of this study
is to increase the understanding of drivers for engaged actors of networks in the context of non-commercial circular economy.
1.2 Research purpose
The purpose of this study is to explore what motivational factors in circular economy may apply to non-commercial actors. To explore this purpose, this study focuses on a "leisure bank" network. A "leisure bank" is described as a library where individuals can borrow sport and leisure equipment instead of books. The concept of "a leisure bank" is non-commercial, which means that users can borrow for free, without any financial transaction (Bromark and Sjölund, 2019). The network of this specific circular economy context is relevant to the knowledge gap because no profit is generated from this circular economy model.
Libraries that provide knowledge by lending books inspired the non-commercial "leisure bank" concept which provides access to various sports and leisure activity (Tekie et al., 2020). As with libraries, this concept is also developed on a public funding model where local actors (e.g., municipalities) are responsible for their own development (ibid.). Traditional subventions from commercial organisations are excluded from the policy which ensure this concept to be completely non-commercial. The study was conducted in Sweden, where the
"leisure bank" concept is observed to be developed (Bromark, and Sjölund, 2019). The study is limited to four actors of the explored network, which were identified to be the ones directly engaged in the circular economy activity. Three of these actors are institutions (i.e., an association and public institutions) and the fourth is the users.
2. Literature review
This section presents a review of the existing literature in circular economy and collaborative consumption. Further, the section highlights conceptual studies on driving motivational factors for organisations and for consumers. Additionally, academic knowledge about network is presented together with insights coupled to traditional marketing literature.
2.1 Value creation through circular economy
Circular economy is an alternative economic model to linear economy (Ranta et al., 2018) and an umbrella term for initiatives such as shared economy and collaborative consumption (Eckhardt et al., 2019). The concept of circular economy is of concern due a shift in how services and goods can be offered while attaining a higher value creation through a circular, shared or collaborative life circle (ibid.). Circular economy has arisen to pursue sustainability challenges (United Nations, 2015) through the process of deep and continuous extraction value from resources in contrast with the “take, make, and dispose” model of linear economy (Ranta et al., 2018; Tura et al., 2019). Ellen Macarthur Foundation (2018) define it as: “a circular economy is one that is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times, distinguishing between technical and biological cycles” (Macarthur, 2018). Circular economy has the purpose to optimise and engage in a “restorative use of resources” (Geisendorf and Pietrulla, 2017) and a goal to “decouple global economic development from finite resource consumption” (Ellen Macarthur Foundation, 2018).
Resources are circulated for as long as they; provide value (Ranta et al., 2018). Value is defined as a positive perception (Grönroos, 2006) of a diverse set of factors (Svensson, Grönroos, 2008) that emerge through interactions and exchange (Vargo and Lusch, 2004).
The circular concept is proposed to give an even greater competitive advantage in the future as it generates more value from each unit of resource than the traditional ‘take-make-dispose’
model (Aminoff et al., 2016). Guidelines to industries and regulatory bodies make a transition doable (Macarthur, 2018). Consequently, industries are being suggested how to incorporate circular economy and untap a new source of value on the one hand (ibid.) and provided opportunities to extract previously unattained value on the other (Esposito, et al.,
2018). For instance, it allows resources to keep giving value due to the reiterative circulation (Ranta et al., 2018).
Ranta et al. (2018) proposed a relevant model of 3R’s. Each R consists of three stages in which resources follow a specific pathway toward value creation and recovery: “reduce, reuse and recycle”. Reduce refers to minimising the usage of resources and reducing generation of waste. Reuse relates to using products and components again for the same purpose. Recycle designates the transformation of products or components into materials.
(ibid.)
This perspective is in line with the theory of degrowth (Ranta et al., 2018) and the model of 3Rs was elaborated on Latouche’s (2009) “8R’s virtuous circle”. The 3R’s “reduce, reuse and recycle” are the three last objectives of Latouche’s 8R’s “re-evaluate, re-conceptualise, restructure, redistribute, relocate, reduce, reuse and recycle” (ibid.).
While circular economy focuses on resources, there is an increasing demand for focus on the network operating in circular economy and related relationships (Aminoff et al., 2016). These authors specify in their research that a strong network is key (ibid.) to the point of being necessary (Anderson et al., 1994). Circular economy needs to be developed through such strong networks to be successful (Anderson et al., 1994) as the resource exchange benefits from a strong position of the individual sum of participants in the network and strengthening the value creation in the network (Forsgren, 2017, p. 108-110).
2.2 Collaborative consumption
Collaborative consumption implies a change in the pattern of consumption. It relies on users sharing and exchanging goods or services from peer-to-peer instead of purchasing them for ownership (Perren and Grauerholz, 2015). It is thereby identified as a form of circular economy, with a focus on the consumers and users’ perspective. Collaborative consumption is considered as shared economy (Eckhardt et al., 2019) due to its community-based initiatives oriented towards value in resources and sharing (ibid.). As part of circular economy,
collaborative consumption engages in reuse and recirculation of resources (Perren and Grauerholz, 2015).
Collaborative consumption carries relationships and a resource network-based approach where users form a group of active actors (Perren and Grauerholz, 2015) by participating in the resource exchange (Pedersen et al., 2015). These network-based relationships and their interactions gain importance as the exchange of resources and interaction creates value (Tura et al., 2019).
Pedersen et al. (2015) analyse this model of collaborative consumption in the clothing and fashion industry. “Clothing libraries” is a concept where users, the members of the community, share their clothing without exchanging ownership. In other words, each piece of clothing pertains to the library and is lent to users who request them (ibid.). The cycles of lending provide value to the different borrowing users through a larger collection of pieces that are accessible to all with a membership fee (Pedersen et al., 2015).
2.3 Trust, relationships and networks
The previous section introduces the concept of network and actors. Actors are organisations or groups of individuals. The network is established when there is a sustained interaction amongst the actors in the form of relationships happening under a common environmental context (Anderson et al., 1994). These networks can be complex and their formation enables co-creation of value for both the individual actors and the network. According to these authors, the creation of value is based on “activities, actors and resources” (ibid.). The network structure is ground when proper conditions are met (Ballantyne and Varey, 2006).
Relationships are interactions amongst the different actors and considered to be the driver of activity in a network which can have different roles such as user and provider (Ballantyne and Varey, 2006). Relationships do not form spontaneously and their establishment undertakes a process which requires a series of conditions. Ballantyne and Varey (2006) present their three enablers of exchange. Factors that, when executed, allow the network to
form and be sustained through the core of actor-to-actor relationships: relationship development, communicative interaction, and knowledge renewal.
Table 1. Enablers of exchange. Ballantyne and Varey, 2006
Relating, communicating, and knowing are the processes in which the enablers sustain relationships. When a series of different actors interact through relationships in a long-term horizon, a network is formed and eventually sustained (Anderson et al., 1994).
Morgan and Hunt (1994) discuss the importance of trust within marketing as an enabling factor for value creation. The authors define trust as: “when one party has confidence in an exchange partner’s reliability and integrity” (Morgan and Hunt, 1994). This confidence is what allows a degree of dependability on other actors’ interactions. In other words, trust allows relationship development by depositing acknowledgement upon the others in the network (Ballantyne and Varey, 2006). Trust enables a connection among actors (Morgan and Hunt, 1994). It acts as a pivotal factor for relationship development. Through enabling relationship building, trust supports the formation and maintenance of networks (Anderson et al., 1994).
Communicative interaction is dialogue and exchange of information amongst the actors in the network to align their interests and actions (Ballantyne and Varey, 2006). Knowledge renewal is closely tied to trust. The actors possess and exchange information through the network communication. The use of know-how and allocation of information that is communicated within the network enables a process of value co-creation (ibid.). These three enablers triangulate (Ballantyne and Varey, 2006) forming the basis of solid relationships among actors. Fostering exchange through the three processes of relating, communicating, and knowing; the actors and network allow for value co-creation to emerge (ibid.).
Enablers of Exchange Processes
Relationship Development Relating
Communicative Interaction Communicating
Knowledge Renewal Knowing
In the network, actors interact through mutual relationships in a common environment to facilitate a process of value creation. Anderson et al. (1994) engage in a discussion about the environment of an organisation and the business network. The authors extend the relational concepts of a network beyond single relationships between two organisations. They define the network as sets of connected relationships between entities and the environment as the surrounding peripherical set of actors that have indirect contact with the main actors, such as secondary suppliers (Anderson et al., 1994). The network is deemed as a frequently invisible construct that is dynamic (ibid.) and changing as the relationship amongst its organisations reshape where relationships carry the actors' influence over other actors in the network through their interactions.
A motivation to engage in a network structure is resource exchange and competitive advantage (Forsgren, 2017, p. 108-110). This author researches the concept of business network: the interests of individual actors to engage in a network are to access knowledge and resources which strengthens each individual actor (ibid.). This resource exchange allows for competitive advantage to strengthen the position of each organisation on the one hand and to attain objectives that would not be possible for a standalone actor on the other hand. Both reinforce the network itself (ibid.).
The network aspect under circular economy has additions on top of the traditional business networks priorly introduced. Circular economy operates in a network based of resource exchange (Aminoff et al., 2016), so called resource network. The co-dependence and number of actors is increased compared to traditional models of business network (ibid.). Thus, it is an environment with higher co-dependency (ibid.). Aminoff et al. (2016) stress that circular economy would be unsuccessful if individual actors of the network acted only pursuing self- interests without an extensive network aspect. These authors call for the requirement of close collaboration within the circular economy network. The role of trust in traditional marketing (Morgan and Hunt, 1994) has been discussed previously as a ground factor for relationship development (Ballantyne and Varey, 2006).
The importance of trust within the circular economy resource network applies to a higher extent than commercial business networks (Aminoff et al., 2016). The collaboration and relationships between actors are pivotal for this economic model to be sustained. A relational approach to exchange, with a constant flow amongst actors in the network (Morgan and Hunt, 1994), is of heightened importance in circular economy. The modus operandi is of close collaboration that allows accessing and exchanging know-how of different network actors, for which each one possesses specific knowledge (Forsgren, 2017, p. 108-110). Fostering long term relationships and weave tight collaborations in the resource exchanging network is crucial and without this network structure, circular economy would be difficult to sustain (Aminoff et al., 2016).
2.4 Converging theories
Existing literature has identified marketing initiatives which fall under the umbrella of circular economy and collaborative consumption. These are of interest as they provide nuances related to the main theoretical framework of the study.
2.4.1 Shared economy and hybrid markets
Scaraboto (2015), studied the phenomenon of hybrid markets and their research bridges traditional markets with the alternative paradigm of shared economy as a subset of circular economy (Eckhardt et al., 2019). Their research focuses on the nature of exchange in markets that have commercial and non-commercial aspects (ibid.). Scaraboto’s (2015) research framework includes different types of non-commercial exchange in the shared economy networks such as gift-giving, donation ware and sharing which are modes of exchange among actors in the circular economy model network (Aminoff et al., 2016). Shared economy is a concept introduced by Scaraboto (2015). Shared economy and collaborative consumption are a subset of circular economy, given that it involves sharing and using idle resources amongst peers with the purpose to maximise extraction of value (Eckhardt et al., 2019).
2.4.2 Similarities within economic philosophies
Degrowth discusses factors of value under the concept of welfare (Kallis, 2018). Welfare is comprised of activities that create and exchange value (Kallis, 2018) oftentimes not being
captured in traditional socio-economic indicators and models (Nørgård, 2013). Value in business is mostly a perceived factor, difficult to measure (Grönroos, 2006; Svensson, Grönroos, 2008), that emerges in the business relationships and interaction amongst different actors (Vargo and Lusch, 2004). Marketing and circular economy have stood separated in academic research (Khmara and Kronberg, 2018), but both fields have in common the interest in value creation and maximisation which carries an opportunity when converging both disciplines. A point of contact between traditional marketing literature, circular economy and the theory of degrowth is that value and welfare are comparable factors, if not being the same in some cases (Nørgård, 2013). A researcher in the field of circular economy, Lopes de Sousa Jabbour (2019), states: “One of the ultimate goals of circular economy is to increase the circularity of energy and resource use to increase their overall value”.
The different paradigm of circular economy presents challenges when being incorporated into business as they were deemed separate disciplines. Khmara and Kronberg (2018) discuss the
“oxymoron” through the incompatibility of circular economy and related concepts on their application in the paradigm of business which has followed a different philosophy (ibid.). It does not easily incorporate circular economy into traditional capitalist business due to conflicts of interest. For example, recirculation of a good can hinder new sales and growth (ibid.). However, incorporating circular economy concepts into business has potential value and there is a complementation of concepts. circular economy is argued to allow a higher potential of value (Tura et al., 2019) as resources are being circulated while extracting the maximum value possible, instead of reaching the end life circle before exhausting all the capabilities of a good. That would be the common course action in linear economic (ibid.).
Aminoff et al. (2016), argue that value creation in circular economy is an opportunity because social and environmental actors that were not considered in traditional business, are now part of their framework of value creation (Aminoff et al., 2016).
2.5 Analytical framework
The analytical framework has been elaborated on the reviewed literature to frame the analysis of the conducted study. Value is defined as a positive perception that emerges from an
interaction between actors (Grönroos, 2006). Circular economy focuses on the maximisation of value (Ranta et al., 2018), a value which emerges through the circular economy models such as the 3R’s or reduce, reuse and recycle (Ranta et al., 2018).
Individual actors, which participate in different stages of a circular economy network, interact through the exchange of resources. These actors can range from individual people (Perren and Grauerholz, 2015) that are active participants in a peer-to-peer resource exchange (Pedersen et al., 2015); to a structure of a community-based exchange as a primordial form of network (Eckhardt et al., 2019). These actors aggregate their interactions and lay the ground for a network of interest in this study (Anderson et al., 1994).
The motivations of circular economy are “resource scarcity is a major driver […] to develop circular economy solutions” (Tura et al., 2019). Furthermore, a resource network provides a supportive basis and augmentation of the solidity for this exchange to take place and value to emerge (Aminoff et al., 2016) as the network structure strengthens each individual actor (Forsgren, 2017, p. 108-110). Actors can be specialised in a part of the resource exchange.
These benefits from the network structure due to a stronger position which supports an increase of value creation (ibid.).
Figure 1. Analytical framework
The analytical framework (Figure 1) represents a resource exchange network. This model is to be used in the study as to research the value creation processes in a resource network. The diagram divides this example network in User Actors and Provider Actors, given their main role in analogy to traditional business structures (Ballantyne and Varey, 2006). The lines among networks or individual actors represent an interaction in the form of resource exchange.
The right side of the diagram exemplifies a structure of actors in connected networks: an individual provider actor and a political actor that interact with the previously introduced series of provider actors. They interact by exchanging resources within the immediate actors and the “actor of interest” which is the specific actor to be analysed in this study. The latter is situated in the centre, from whose interaction relates it to both user and provider actor networks. This aggregation forms a network which is the environment of study. Such complexity is a characteristic of network structures when there are several different actors with their respective interactions (Anderson et al., 1994).
The model allows researchers to provide the point of view when focusing on the involvement of the actors. The analysis evolves on a study on their point of view of the network through their participation, exchanges, motivations and perceptions. These interactions involve value creation, a perception that arises from such exchange and is deemed to be positive for the actors involved and their respective network (Grönroos, 2006).
3. Research methodology
This section presents the research methodology decisions to conduct this research. A qualitative approach has been chosen using a single-case study. This section will further present the case, the data collection method and the informant selection method. A discussion about the interview design as well as the process are presented. The last part of this section explains the ethical considerations that have been followed and the research limitations.
3.1 Research strategy
To understand the motivational factors, for the individual actors of a network, to participate in non-commercial circular economy, a qualitative strategy has been chosen to conduct this research. Qualitative research strategy is the most appropriate approach to develop understanding of a specific phenomenon from the informants’ point of view (Ghauri et al., 2020, p. 97). Choosing a qualitative study strategy provided a flexible approach to enable unknown factors to be later identified in the research process (Bryman and Bell, 2011, p.
399). Furthermore, the complexity of the circular economy networks directed this study toward an exploratory purpose. Explorative approach is appropriate to gain new information and to understand a phenomenon (Saunders et al., 2009). An abductive approach was used to conduct this study. Abductive reasoning is the iterative back and forth process between theoretical concepts and empirical data through which the research is conducted (Bryman and Bell, 2011, p. 13). This approach enabled the researchers to develop and refine the theoretical framework on the ongoing research process.
3.2 Research design
The study was conducted through a single-case study design. The case study is an appropriate research design when it comes to develop in-depth understanding of the complexity of a unique case of a single organisation, location or event (Bryman and Bell, 2011, p. 60). A case study is suitable when the research aims at understanding a phenomenon that is difficult to isolate from the context within which it is happening (Yin, 2009, p. 18). The drivers to engage in non-commercial circular economy networks needed to be studied in its context to be fully understood (Bryman and Bell, 2011, p. 402). Therefore, a single-case study design
has been chosen in order to understand the motivational factors of the network’s actors and the relationships amongst the involved ones from which value is created in the circular economy context.
3.2.1 Case description
The single case of Fritidsbanken’s network was chosen in order to explore the motivational factors of a network’s actors to engage in non-commercial circular economy. Fritidsbanken is described as a “leisure bank” which operates as a library where users can borrow sports equipment and leisure items instead of books. This loan is granted for a limited period of fourteen days. Anyone can borrow sports and leisure equipment for free, which means that Fritidsbanken does not have a commercial purpose and is therefore a non-commercial organisation.
Fritidsbanken is developed through ninety-six outlets covering the whole territory of Sweden, both in big cities and smaller townships (Introduction interview, Fritidsbanken, 2020). The first outlet opened in Deje, a small town located outside of Karlstad (province of Värmland, Sweden) in 2013. New outlets keep being opening all over Sweden since then (Tekie, 2020).
The lent equipment is exclusively provided from donations and it is collected by Fritidsbanken’s local administrators. Fritidsbanken is an organisation that grant its name to
“leisure banks” which apply to the conditions. Therefore, Fritidsbanken developed through a network of public institutions. First, Fritidsbanken collaborates with the Swedish sport confederation, Riksidröttförbundet (RF-SISU). This second organisation is divided in regional districts where coordinators work in close relationships with Swedish municipalities to support them in opening their local Fritidsbanken outlet.
Borrowing equipment from Fritidsbanken is completely free for the borrowers referred here as “users”. The outlets are opened on the initiative of the municipalities which are responsible for developing the local activity through hiring the outlet staff, collecting and maintain the donated equipment, promoting the outlet locally (e.g., through media communication, event organisation, etc.).
The case of Fritidsbanken is relevant to the purpose of the study since it is a non-commercial organisation that engaged in circular economy and relies on a network of actors who also participate to that engagement. The case of Fritidsbanken was identified as suitable for the study as it is a national-scale organisation developed over the last seven years which findings can therefore contribute to the theory field of circular economy.
3.2.2 Operationalisation
The initial research interest concerned value co-creation, which deemed the formulation of questions aimed towards extracting data concerning the role of different actors in the network of Fritidsbanken. The abductive approach on research (Bryman and Bell, 2011, p. 13) was applied during data analysis as the informants’ insights pointed to the importance of the collaboration amongst diverse actors of a network. This deemed that the research focus was shifted to the motivations on engaging in circular economy and network approach of Fritidsbanken.
In line with the abductive approach of this study, two interview guides (Appendix 8.1 and 8.2) were designed considering both an explorative and a theoretical perspective. Each interview guide is composed of seven section. The first section is composed of introductory questions in order to deepen the understanding of the interviewee profile and function. The two following sections are related alternatively to the resource provider and to the resource user in order to obtain empirical data from each perspective. The fourth section is related to the concept of trust with the objective to understand the relationship among the resource user and the provider. The following section aims at understanding how the recirculation occurs and what are the possible consequences. Then, the sixth question is related to the process of value creation in order to understand who contributes to create value and how. Finally, the last section is composed of questions regarding the network in order to understand the role of the involved actors.
3.3 Data collection
The data have been collected through various forms which are explained in this section. The primary source of data was the semi-structured interviews and several secondary sources have been used as an addition.
3.3.1 Semi-structured interviews
A first interview was undertaken with Fritidsbanken’s communication manager in an unstructured form, as a first introduction meeting with Fritidsbanken’s administrators. This interview provided significant knowledge about the organisation and contacts with key informants for the following process of data collection. In other words, it enabled the researchers to follow a “snowball sampling” (Bryman and Bell, 2011, p. 491). This first interview also provided general insights and data to structure the interview guides of further interviews as well as guidelines for the next stages of research.
Semi-structured interviews were chosen as the main research method (Bryman and Bell, 2011, p. 205). Two interview guides – one for the administrators (Appendix 8.1) and one for the users (Appendix 8.2) – have been elaborated after the first introduction interview with the main contact person. It allowed leeway for interviewees to accommodate a broader response and untap possible data not foreseen (ibid.).
Thirteen informants were interviewed in total. They are divided in four distinct profile of actors: Fritidsbanken association, the Swedish sport confederation (RF-SISU), the municipalities and Fritidsbanken’s users.
Interviews were conducted through video-calls and additional data sources were consulted virtually (e.g., presentations). A single informant requested a face-to-face interview which was exceptionally feasible. The other interviews conducted through calls were recorded after obtaining interviewees consent to operate further analysis and coding.
3.3.2 Selection of informants
The studied network distinguishes the resource users on the one hand and the resource providers, also referred as administrators on the other hand. Accordingly, the study divided four categories of actors in total (Table 2). They all engage in a circular economy network where they create non-commercial value through their interactions. For the purpose of understanding their motivations to participate to this specific context of circular economy, it was relevant to investigate the perspective of both resource providers and resource users.
Table 2: Informants
(*also district coordinator)
Administrator informants were selected strategically according to the relevance of their role
Group of actors Actors Informant Interview
duraIon Date
Resource providers (administrators)
FriIdsbanken CommunicaIon manager 01:53:24 20.03.2020
Swedish sport confederaIon’s
district coordinators
District coordinator - Sörmland 00:59:04 16.04.2020 District coordinator - Dalarna 01:03:57 16.04.2020 District coordinator - NorrboVen 00:40:02 14.04.2020 District coordinator - Uppsala 01:22:46 16.04.2020
MunicipaliIes’
project managers
Project manager - Örebro* 00:33:11 17.04.2020 Project manager -
Upplands Väsby (Stockholm) 00:42:25 17.04.2020 Project manager - Lund 01:00:55 17.04.2020 Project manager - Filipstad 01:17:01 17.04.2020
Resource users Users
User 1 00:49:57 14.04.2020
User 2 00:53:06 14.04.2020
User 3 01:04:16 15.04.2020
User 4 01:10:14 15.04.2020
provides the list of national managers and district coordinators who were contacted via email.
In a first stage, the two main managers of Fritidsbanken have been contacted via the email addresses list on the corporate website in order to establish a first contact and understand better the structure of the organisation. This first stage enabled the researchers to identify better the strategic positions of the organisation structure in order to reach them in a second stage and benefit from the first established connexion to be put in contact through the corporate structure. The administrators are the district coordinators and the project managers who were later contacted via email. For ethical reasons, their anonymity will be preserved along the whole study.
Fritidsbanken is the association that was started with the initiative to collect unutilised sport and leisure equipment from donator’s garage in order to lend it for free to anyone. The association is now composed of each outlet of the territory which apply to join the network of association. Joining Fritidsbanken’s network is free of charge but requires some conditions.
For instance, not making any profit out of lending, implementing the visual identity in the outlets, or not accepting any negotiation of commercial sponsorship are rules imposed by Fritidsbanken. The organisation is driven by two managers who are in direct contact with the district coordinators of the Swedish sport confederation. One of them, the communication manager, was our first informant. He was able to introduce the concept of Fritidsbanken and to provide the contact with the next informants.
The Sport confederation of Sweden (Riksidrottsförbundet and shortened as RF-SISU in Swedish, also referred to as Swedish sport confederation) is a public institution which role is to represent sports organisations’ interest. This confederation is divided in districts according the regions of the country. Its mission is to support the positive socio-economic effects of an active lifestyle through sports development. This institution acts as a liaison between Fritidsbanken and local actors such as municipalities. The district coordinators are the agents who carry the mission to contact local decision makers in order to persuade them to engage in the initiative and open a Fritidsbanken outlet on their municipality.
Four district coordinators have been interviewed on the recommendation of Fritidsbanken’s communication manager in order to cover various districts of Sweden which provide different local context insights. Consequently, the district coordinators of Södermland, Dalarna, Norrbotten and Uppsala have been interviewed.
Municipalities are the final deciders to implement an outlet on their territory. They are composed with political decision makers who can provide the infrastructure to develop Fritidsbanken, but the project managers are in practice the ones who implement a leisure bank on their municipality. In some municipalities, the initiative to start a Fritidsbanken emerged from local politicians but it is not always the case.
Four project managers have been interviewed. They have also been selected according to the recommendation of Fritidsbanken’s communication manager for the same reasons as for the Swedish sport confederation’s district coordinators. Thus, the project managers of Filipstad (small township), Örebro (intermediary town), Uplands Väsby (big student area) and Lund (big student city) have been interviewed. Exceptionally, Örebro’s project manager is also district coordinator at the Swedish sport confederation so he could provide wider insights regarding his double role. Moreover, this selection provided insight of very different contexts as Lund’s outlet is located in the very centre of the city whereas in Uplands Väsby, the outlets are located in periphery of the city centre. Filipstad is a small township where people know each other, and the population is more composed of families. Finally, Örebro is comparable to Filipstads’ profile of population but it counts fifteen times more people than Filipstad.
Users are individuals or entities who borrow equipment from Fritidsbanken. Anyone can borrow without socio-demographic distinction. To reach user informants (Aminoff et al., 2016), a preliminary screening was conducted on social networks to find committed consumers. The social network was only used to establish a first contact and further plan video-call interview with voluntary participants were used for finding suitable interviewees and establish contact. This method of selection limited the possible profiles to a narrow target of users that use social medias and are not representative of all users, but the qualitative aim
of this research is not affected by this limitation. For this case, four user informants were interviewed. Their demographical characteristics are two students from Lund and two family mothers from Uppsala.
Four Fritidsbanken users were interviewed. Since Fritidsbanken’s communication manager informed us the majority of users are students and families, we decided to interview two students from Lund and two family mothers from Uppsala. Each of them constituted the typical profile of user of the leisure bank they are related to, in order to provide the most representative data regarding the corresponding local user population.
3.3.3 Secondary sources
Fritidsbanken website was the introductory source of information, with the consolidated basic information about the organisation’s activities. Alternative sources in the form of public media and articles were consulted as a guideline of factors to pinpoint the research. RISE institute’s report “Utvärdering av Fritidsbanker” by Tekie et al. (2020) researches on the benefits of the operation and socio-economic value of leisure banks which also based the study on Fritidsbanken’s case. Their study focuses on aspects that can be considered as value for society (Nørgård, 2013). This study provided us valuable data due its authors (Tekie et al., 2020) extensive and systemic analysis which covers a large set of dimensions, long time scale and network arrays.
3.4 Data analysis
The interviews have been recorded to enable later transcription, coding and analysis. The coding and analysis phase were focused on identifying keywords and concepts according to the analytical framework presented earlier in Figure 1. Relevant concepts to the research have been analysed in schematic form and linked through the context of the interview’s conversation in order to enable possible additional interpretations. Data which would be implicitly included in the response may emerge through the allowance for broader responses on a semi-structured interview (Bryman and Bell, 2011, p. 467).
Table 3: Coding
3.5 Ethical considerations
The ethical considerations to protect participants in the study process is fundamental in research (Denscombe, 2014). Thus, the four main areas that have been identified by Diener and Crandall (1978) guided the ethical considerations of our research method.
1. The harm (ibid.) to respondents is prevented by keeping anonymous and confidential their identity and answers. Consequently, the presentation of empirical data presents the identification of informants regarding their position, but the indicated number does not follow the order in which they are introduced in the table of informants (Table 2).
2. The informed consent (ibid.) is carefully heeded in the interview process. The respondents are informed of the research purpose as well as they are explained how their answers will be analysed consequently. Before starting the interview phases, they are asked for consent about recording the interview and informed that it aims to improve the transcription in order to comply to their words during the further steps of the research.
3. The risk of privacy invasion (ibid.) is limited by informing the participants they can end the interview at any time without justifying their choice, as well as refusing to answer to any question if it is not on their own consent.
4. All the participants are fully informed of the true purpose of the study which they are required to consent to before participating to the interviews. Therefore, no deception is involved in this study.
3.6 Limitations
The selected method provides the research with flexibility in the respondents’ answers which raises the chances to obtain unexpected information (Bryman and Bell, 2011, p. 499).
Quote Key Words Concept
a specific context. However, the generalisability to other contexts is poor (ibid.).
Furthermore, the utilised interview guides are presented in the appendix in order to increase the transparency of the semi-structured interviews (Yin, 2009). Finally, in order to improve this study’s reliability, the collected data will be compiled in a database dedicated to the case study (ibid.).
4. Case study of non-commercial circular economy networks
Fritidsbanken’s network is a relevant case study to explore the motivational factors to engage in a non-commercial circular economy activity, based on resource exchange. The insights from interviewed informants are included in this section, used to form the empirical data.
4.1 Fritidsbanken
Fritidsbanken is a non-profit organisation that functions as a traditional book library where consumers borrow outdoor sport equipment. The entity holds donated equipment that is loaned free of charge for a limited number of days (Fritidsbanken, 2020).
“Fritidsbanken works like a library. Everyone can borrow, everything is free and there is a large focus on the environment.” (District coordinator 1)
The organisation relies on donations to collect leisure equipment to provide to the largest number of people the possibility to get access to sports at a lower cost. For such to happen, Fritidsbanken is part of a network that relies on an exchange of resources, in the form of equipment, knowledge and users.
4.2 Fritidsbanken’s network actors
A support of Fritidsbanken’s activity is based on the interaction with different entities. Some of these are well established partnerships which enables the existence of a Fritidsbanken in some geographical locations.
4.2.1 Fritidsbanken and the Swedish sport confederation
The Swedish sport confederation is closely tied to the operations of Fritidsbanken. This entity ensures the basis for the leisure bank to be implemented in a location and acts as a liaison with political bodies which provide the resources. Therefore, for most of the Swedish regions there is a relationship triad among these actors in the network. Some interviewed informants are part of the Swedish sport confederation as well as Fritidsbanken, exemplifying the commonality between both entities.
“I have half the task being the one who is responsible to establishing Fritidsbanken in our county and the other half is taking care of this specific Fritidsbanken.” (Project manager 4)
The city of Stockholm does not have any Fritidsbanken (Project manager 3), while its extended metropolitan area has a lack of Fritidsbanken outlets in comparison with the demographics of other regions. Project manager 3 is part of the leadership of a Fritidsbanken in a town located in the North of Stockholm. The absence of Fritidsbanken is correlated to Stockholm’s region particularities (Project manager 3).
“I know that Fritidsbanken HQ tries to get a cooperation with RF-SISU and I think that is because there are a lot of queues for different sports clubs in Stockholm so even if the kids find a new sport, they still might have to wait 2 years until they can get a spot in a club.” (Project Manager 3)
From Project manager 3’s insight, Stockholm City has a specific difficulty: the Swedish sport confederation in the region does not have a close relationship with Fritidsbanken in comparison to the other consulted regions. This significates difficulties for Fritidsbanken to operate, as if there was a missing link between them and the municipalities that ultimately implement a Fritidsbanken outlet. The major role of the Swedish sport confederation is to facilitate the implementation of Fritidsbanken.
4.2.2 Fritidsbanken and municipal political bodies
Political bodies are an array of entities that represent the administration of Swedish geographic entities such as municipalities and regions. In the regions where data has been gathered, this relationship involves an exchange of resources and knowledge between Fritidsbanken, the Swedish sport confederation and the municipalities. All municipalities are entities that support Fritidsbanken and give the resources for establishing the leisure bank. District coordinator 2 is a coordinator at the Swedish sport confederation and provides the insight from the point of view of this entity on how Fritidsbanken, the Swedish sport confederation and municipalities interact:
“We don’t work at Fritidsbanken, but we work with Fritidsbanken. We help Fritidsbanken and talk with the politicians. We provide them with facts they want
from Fritidsbanken but don’t know exactly what it means, so we can provide these things they need to know to take smart decisions.” (District coordinator 2)
The socio-economic impact of a Fritidsbanken is positive, which brings the initiative to the interest of local political bodies reinforcing the aspect of a relationship between Fritidsbanken, the Swedish sport confederation and the municipalities.
“Many municipalities want to open a Fritidsbanken.” (District coordinator 1)
In Stockholm, municipal politicians took the initiative to implement a Fritidsbanken as Stockholm region does not rely on the Swedish sport confederation support, as explained earlier.
“It was a political initiative from Liberalerna. But everyone voted for it and was positive for it.” (Project manager 3)
Municipalities channel the resources that support Fritidsbanken and in locations where the political bodies are hesitant and the operations have more difficulties.
“We have to push a lot towards politicians and have them realise there are positive socio-economic effects.” (Project manager 4)
4.2.3 Fritidsbanken and commercial retailers
Commercial retailers have been present as providers of sport equipment, before Fritidsbanken arose as an initiative. Fritidsbanken proves to be an alternative model through the lending of used gears and this can be perceived as a conflict or competition with commercial actors.
Prior and during interviewing, the ideas of Fritidsbanken being an unfair competitor and threat to those who sell equipment as well as how could both coexist without engaging in direct competition were of concern. Given the reduced level of consumption, it may entail a reduction of new purchases as users are lending equipment from Fritidsbanken instead of purchasing from retailers. An informant from the Swedish sport confederation and Fritidsbanken’s manager specified that an analogy of the bookstore and library model, proven for centuries, is the basis for a positive implementation of Fritidsbanken without disturbing commercial sellers’ activities.
“It is important to hold the library principles. Libraries and bookstores have coexisted for hundreds of years. Libraries, where someone can lend, stores for purchases.” (District coordinator 1)
Upon discussion with interviewees, different relationship scenarios between Fritidsbanken and commercial retailers have emerged. These will be described according to the type of relationship and mutual benefits that both extract from their interactions.
Negative impact
A hypothesis of interest was if the free lending by Fritidsbanken has a negative impact on commercial retailers and this was discussed with informants from Fritidsbanken to collect their perception. The free lending model was potentially disruptive and may pose to be a threat to commercial retailers.
“Many were negative about Fritidsbanken. After a while they changed opinions. This is good, we can have new customers. They can borrow to try, see it is fun and then purchase in a sports store. Now, they think it is good. Even if it wasn’t so in the beginning.” (District coordinator 1)
However, conflicts arose, which required discussions between Fritidsbanken and commercial retailers as to find a coexistence model.
“Local politician called me saying there was a letter about unfair competition, from a local commercial store and hiring company. I called them, talked and went into a meeting together. We are not a sports store and landed an agreement. Today we collaborate” (District coordinator 1)
The attained solution was a collaboration and cross promotion. Fritidsbanken being a source of users and pointing towards the commercial company for demanding users which Fritidsbanken does not have equipment for. The commercial store has a location which holds a small Fritidsbanken parallel to their commercial activity. The conflict was solved in focusing coexistence drawing inspiration from the model of book libraries and bookstores.
“Books, libraries, and bookstores. Fritidsbanken and sports store. That is the rhetoric we use.” (District coordinator 1)
Neutral impact
Another coexistence scenario is the one described by Project manager 4, where Fritidsbanken and commercial retailers do not have any interaction. That is, there is neither a positive nor negative relationship. The lack of communication meant that each entity does their own activity without interfering nor exchanging resources.
“Some politicians said that the municipality shouldn’t be in competition with those who sell but we haven’t had any issues at all. We were planning to have a meeting with the local ski shop, but we haven’t found the time to. No one has said anything negative.” (Project manager 4)
Positive impact
The best scenario is where all the actors of the network have a positive relationship, together with an exchange of resources (e.g., equipment, new users or knowledge) that improves the activity of all of the actors.
“The sporting business loves it here, anyway. Many sports stores they say it is good and support Fritidsbanken as a good thing. We have businesses that have given gears to Fritidsbanken, not the latest, but as they say: ‘we can’t have that much for those skis anyway, so you can have them.'” (District coordinator 2)
There is a value generation in this type of relationship between Fritidsbanken and commercial actors when the positioning allows for the user-base to grow, feeding a positive user base for the commercial actors. Equipment flows from the commercial and user base towards Fritidsbanken.
“We have a really big company, a rental company in Boden, where we also have a Fritidsbanken. They also love Fritidsbanken, support it, and give gears to Fritidsbanken. It’s longer-term rental, for a whole season so they really like Fritidsbanken as people try; it will be more customers for them as well.” (District coordinator 2)
The insight of Project manager 3 describe their “win-win” relationship. Fritidsbanken has a positive effect on both the user base and commercial retailers as it is acting on an improvement of the exchanged resources.
“When people come to them, they know they do “smart” purchases. They do not run to Stadium impulsively and will know they want to use them. Stadium wants to keep good environmental policies too and has given us a lot of equipment they can’t sell.
Win-win situation.” (Project manager 3)
4.2.4 Users and Fritidsbanken
The user-base comprises of any individual or group that borrows equipment through Fritidsbanken. Relationships can vary to a single instance of lending to frequent users that try various sports and come to Fritidsbanken frequently.
“I think they have a potentially very important role because they can provide opportunities of outdoor and indoor activities for young people, kids, teenagers, students or even all ages to try out new things. But especially, I think for people that don't necessarily have the money to go on a ski trip, for instance. Sport activities cost money, so I think they have a crucial role to fill there in giving the opportunities for more people to try more things.” (User 2)
4.3 Life cycle of sports equipment
Fritidsbanken relies on donated equipment which is re-provided to users through the leisure bank lending system. The product life cycle under Fritidsbanken follows a circular pattern.
Equipment enters the system when it is donated, as used items carrying over a previous service period. Within Fritidsbanken this equipment is being lent to users, in as high number of iterations as possible until its end of life. This end-of-life stage is attained through wear, breakage, or disappearance.
The goal of Fritidsbanken is to exhaust the entire usable life cycle of each item. From the insights of informants, value lies in reuse of the equipment through cycles of recirculation in loans to users. District coordinator 2 specified in how the recirculation process varies depending on the qualities of donated items and their use.
“Some things can be rotating a long time. It depends how frequent it is out on loan.
Like a book on the library, depending on how many people read it and take it to use. Fritidsbanken has one more level because we all got used things. So, we don’t
know how many times has it been used before it came to Fritidsbanken so it can be well used or almost new.” (District coordinator 2)
Project manager 3 mentioned the motivation when discussing about end-of-life stages.
“Things do break, but if it does, you have used it as much as possible instead of laying on a shelf in the garage. Using until it breaks.” (Project manager 3)
Fritidsbanken emphasises the continuous utilisation of the equipment that is lent. Lending equipment until end-of-life is reached and the items exhaust the ability to be used.
“If you want to be a smart citizen, and to not buy something to just keep in storage in the garage or wardrobe.” (Project manager 4)
Instead of purchasing equipment that will be sparsely used, it is deemed as “smart” to engage in a model that allows equipment to circulate and be used as much as possible. User informants shared their opinion about reduction and recirculation.
“For me it is very important to reduce unnecessary consumption and it feels great to be able to borrow equipment we can use without needing to push the production for.” (User 1)
“I think it's a future way of thinking, of how we should split things and use it as a group; and own things together with respect for the other individuals.” (User 4)
There is an ethos behind recirculation from the user side, understood as an optimisation of item usage. User 3 explained some of the advantages of Fritidsbanken in her point of view relating it to the aspect of improving the relations within a community. An example of work tools shared in her neighbourhood is provided.
“I feel 100% involved in recirculating items. We are already involved in recirculating tools as much as we can in my neighbourhood because we don’t necessarily need to buy work tools that we use only a couple of times, but it also has positive social interaction consequences. Borrowing from Fritidsbanken was something I was very happy to have the opportunity to be part of.” (User 3)
Sustainability is a main pillar of these initiatives and it was it was raised as such during interviews. According to Fritidsbanken’ user informants, environmental sustainability is of high importance and proves to be a closely related motivation for part of the user demographic. One of the informants’ links environment as the main driver behind the user base coming to borrow.
“Mostly environment, Fritidsbanken has had a real Greta Thunberg effect. People have begun to think. Many have said this is excellent from an environmental point of view. Instead of purchase, share and recirculate.” (District coordinator 1)
4.4 A good society and better futures
The contract processes that allow the lending to be undertaken are of interest to the research in the case study. Such process is identified in stages considering the agreement on the lending terms, securing the equipment, the relationship between Fritidsbanken and its consumers, and the presence of malicious behaviour that sabotages the process of lending by breaching trust.
Fritidsbanken uses a simple system to lend the equipment. The lending period is fourteen days. The only data required between users and Fritidsbanken is the name and telephone number. There is no deposit or monetary cost for the user. There are SMS reminders close to the end of the loan period.
“They only asked for my name and phone number, not even my personal number. It’s really not much.” (User 3)
Project manager 4 provided the point of view of his perspective as manager of a Fritidsbanken. He paraphrased users’ opinion at the time of lending items:
“Are you sure it’s the only thing you need from me?” “Do you trust people that much?” (Project manager 4)
There is an underlying value factor to users who do not need to provide strict authentication measures, as the personal number (national identification number) is implemented elsewhere in Swedish society. This factor extends the availability to anyone in society.
