Circular Economy in the Växjö Region Master’s Thesis

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Circular Economy in the

Växjö Region

Case: Local Entrepreneurs and Organizations

Master’s Thesis

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Abstract

Purpose - The purpose of this study is to gain insights into the implementation of circular economy from the perspectives of local entrepreneurs and organizations within the Växjö region.

Design/methods/approach - This paper follows the case study design with local entrepreneurs and organizations as the unit of analysis. The authors adopted both iterative and abductive thinking in order to alternate between analysis of theories and empirical material. Systematic literature review with themes was used as a specific purpose and research question was specified from the beginning. When collecting empirical material, guided and semi-structured interviews were used. For the data analysis, “initial coding” was utilized, which allowed the authors to differentiate themes and thus perform a thorough analysis.

Findings - Växjö Kommun has a long-term goal of fostering sustainability and circularity within the Växjö region through numerous communication channels and continuous collaboration and cooperation with various groups of stakeholders. Their efforts have facilitated the emergence of initiatives and projects from small entrepreneurs. However, the relationship between Växjö Kommun and other stakeholders (local entrepreneurs and organizations) face difficulties due to a lack of communication and differences in perception of how the strategies should be implemented.

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Key words

Circular economy, circularity, entrepreneurship, entrepreneurs, sustainability, social change, municipality, organizations.

Acknowledgments

We would like to express our deep gratitude for all the opportunities and experiences gained throughout our studies in Sweden. Studying at Linnaeus University has provided us with invaluable knowledge and understanding within the field of entrepreneurship, sustainability and social change, including important insights into the local context of this field.

We would like to thank our thesis supervisor for guiding us through the research process and supporting our efforts to communicate our findings. We would also like to thank our examiner for facilitating opposition seminars during which we were enriched with valuable feedback from our peers. We extend our great appreciation to our families and friends who were there for us every step of the way.

Alina is also grateful for the many opportunities provided by the Swedish Institute under the Visby Program Scholarship for Master’s Level Studies, awarded for displaying both intellectual ability and leadership potential. Their support allowed her to grow tremendously, both personally and professionally, while contributing to the positive change within society. Her efforts and accomplishments as a scholarship holder led to her being recognized with the Global Swede Award 2020 for showing exceptional academic and extracurricular talent within the field of entrepreneurship and innovation. She looks forward to a future of positive contributions to society, supported by the knowledge gained while studying in Sweden.

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Appendices

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1 Introduction

This chapter focuses on presenting the background, problem discussion, research purpose and question, delimitations and thesis outline. Most importantly, the chapter follows the funnel principle. In other words, it is structured in a way that the chapter starts with a broad introduction of the topic and is narrowed down at its end. At the same time, all the key concepts are presented in a logical way and are well-defined. What is more, the research purpose and questions are clearly stated. The authors have also stated both the theoretical and practical relevance of the paper.

1.1 Background

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Recently, the subject of circular economy has become an emerging academic subject. A search on Scopus with the term “circular economy” showed that publications on this subject have been increasing from year to year. There is a substantial rise in the number of articles between years, from just four in 2004 to 1855 in 2019. However, the subject of circular economy in itself is not new. According to Schivelbusch (2015), the processes of circularity in agriculture and economics has been mentioned in literature since the 18th century.

Kirchherr et al., (2017) noted that there are numerous definitions of circular economy. However, regardless of the phrasing, all of the definitions share the same idea. In particular, business models are considered a vital tool and a base for economic systems, where the “end-of-life” concept is replaced with more conscious and responsible consumption, production and distribution (Kirchherr et al., 2017). Circular economy aims to keep products and materials in use. The end goal is to have a system/economy able to regenerate itself (Ellen MacArthur Foundation, 2020).

Currently, the concept of circular economy is perceived by industry professionals, scholars and policymakers as the driving force for a more sustainable future. To make a business more orientated towards a circular economy model, scholars have primarily focused on a modification of business planning and, more precisely, the business model, by introducing the term “circular business model” (Nußholz, 2017). Even though the understanding of this term has not been commonly defined (Nußholz, 2017), businesses should find a way to operate while being mindful of both the available resources and of their environmental footprint (Henry et al., 2020).

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products to last longer or using less resources for manufacturing (Geng and Doberstein, 2008).

In order to achieve those objectives, the circular economy mindset follows a series of “R-imperatives” that help motivated businesses take initiatives in their approach to a circular economy in an operational way. For example, with the terms Refuse, Reduce, Resell/Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle, Recover, the concepts of the circular economy appear a bit more meaningful and accessible for companies and people that are willing to adopt such practices (Reike et al., 2018). There are also three levels of operation, including macro-level (district, city, region, country and so forth), meso-level (eco-industrial parks, clusters, industries) and micro-level (consumers, companies, products). In order to create a lucrative environment for future generations, our generation should jointly work towards the creation of social equity, economic prosperity, and environmental quality. Working together is critical for the purpose of accomplishing sustainable development (Kirchherr et al., 2017).

Even though the topic is constantly under discussion among industry professionals, scholars and policy makers (Urbinati et al., 2017), the proper methods of its actual implementation are debated. The pivotal role in the process of fostering circular economy falls on governments, as they are considered regulators with the power to implement the necessary changes (Accenture, 2014; Lieder and Rashid, 2016; Lüdeke-Freund et al., 2018; Urbinati et al., 2017). Undoubtedly, a shift to circular from linear economy is enabled by changes in business models (van Renswoude, ten Wolde and Joustra, 2015; Ellen MacArthur Foundation 2012; Ghisellini et al., 2016; Bocken et al., 2016; Lewandowski, 2016), but the problem can become more complicated in its execution.

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adapt their business models (Christensen, 2013; Henderson and Clark, 1990; Hill and Rothaermel, 2003; Johnson, 2010). Based on empirical evidence, large enterprises, in some cases, do not necessarily shift their business model from linear to circular. Instead, they consider recycling as a way to become more sustainable (Bocken et al., 2017; Stewart and Niero, 2018). Start-ups, on the other hand, are more flexible and responsive to market changes. Therefore, they are more capable of integrating disruptive circular business models into their strategy (Bergset and Fichter, 2015; Hockerts and Wüstenhagen, 2010; Rizos et al., 2016).

Therefore, authors within the field of circular economy believe that entrepreneurship can be the key driver for both the development of new sustainable products and for making them available on the market (Hall et al., 2010). Schumpeter (1942) defined that a capitalist society could change through creative destruction in order to revolutionize the economic structure. This can be done by bringing new products to the consumers, elaborating new ways of production or transportation, creating new markets or introducing innovative forms of industrial organization (Schumpeter, 1942). Venkataraman (1997) explained that entrepreneurs bring new products and markets into existence by using time, effort and money. One can then conclude that entrepreneurs can also have their part of responsibility in the emergence of the practice of circular economy.

1.2 Problem discussion

On one hand, several barriers are presented to entrepreneurs and companies that would like to adopt a more circular way of making business (Rizos et al., 2016). The lack of capital and scarce financial help from higher authorities slows down the emergence of circular economies. The lack of information about circular economy (including its benefits) and ways to implement it is the key issue. Authors argue that most firms do not understand what the principles behind the circular economy are or have never heard of them (Rizos et al., 2016).

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In other terms, turning green can also be considered a risk for a company and might not be appealing. Companies that already have revenue streams which make them profitable are not interested in changing (Hage, 1999; Hannan and Freeman, 1984). Moreover, those companies might fall into different traps by trying to adopt some new ecological practices. Among other things, being scalable, having correct and up to date competencies and having the financial capacity to support a new production are problems that companies can face (Barnett and Hansen, 1996).

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in their growth. One solution would be to join forces with bigger groups, as is the case of The Body Shop that was acquired by L’Oréal.

By understanding the complexity of the process that leads entrepreneurs to develop environmentally oriented solutions, one can wonder which role the government can have in that case. Governments can motivate the creation of sustainable solutions through taxation and policies (Hockerts and Wüstenhagen, 2010). Through regulation, laws and measurements, they can slow the process of environmental degradation (York and Venkataram, 2009). However, a lack of support from them can be a solid obstacle. Some small companies can see governments as barriers, believing that they lack motivation from the state to invest in ecologically friendly solutions. Moreover, the policies which are produced might not allow small businesses to catch any opportunity to switch to a circular business model (Rizos et al., 2016). Moreover, the government’s interference, when done inappropriately, can slow the emergence of new environmental solutions and promote non-viable industries (York and Venkataram, 2010).

Sweden is often ranked as one of the best countries in the world when it comes to sustainable development and/or care for environment. For instance, US News (2017) ranked the country at the first position when it came to care for environment. The telegraph (2017) placed them at the 3rd position of the eco-friendly countries. With all those recognitions at a national level, one might wonder what the reality at a local and governmental level is.

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implementation of circular economy in the Växjö region from a business perspective is rarely placed under the spotlight.

1.3 Research purpose and question

The purpose of this study is to gain insights into the implementation of circular economy from the perspectives of local entrepreneurs and organizations within the Växjö region. To meet this research purpose, it is crucial to answer the following research question:

RQ: “How is circular economy implemented in the region of Växjö from the

perspectives of local entrepreneurs and organizations?”

To achieve the research purpose and answer the research question, the authors will perform a literature review, collect data, analyze it and draw conclusions based on both theoretical and empirical findings.

1.4 Delimitations

There are certain delimitations that were considered in the early stages of this research. In general, they helped to narrow down the topic of the thesis and focus only on aspects that are relevant for the purpose of this study. Geography was the most important delimitation. The focus of our study was allocated to the Växjö region, including both entrepreneurs and organizations within this area. Secondly, only those entrepreneurs and organizations that have any knowledge and experience of circularity were studied.

1.5 Thesis outline

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2 Methodology

This chapter is devoted to presenting relevant research methodology and our argumentations for utilizing particular approaches. Weathington, Cunningham and Pittenger (2012) pointed out that it is vital for researchers to have a solid understanding of the research methodology, apply it according to the proposed rules and reflect upon their research in the end. Dhawan (2010) noted that it is not sufficient for a researcher to only present the methodology. Instead, justifications of whether some methods will/will not be used are necessary.

It is noteworthy that the authors of the current study considered the scope of data that, in turn, enabled them to address and analyze the research question in a scientific way. They consider their methods consistent with the problem discussion, research purpose and literature review. They have also clearly stated the unit of analysis and argued for how the sampling was done. Additionally, the scope of gathered data was outlined and the methods of analysis were presented.

2.1 Research design

Research design is defined by Bryman and Bell (2015) as the framework for both data collection and analysis. They also suggested that there are five research designs to consider: comparative, case study, longitudinal, cross-sectional and experimental. For this thesis, there was no doubt that case study research design was the one that should be used. It perfectly fits the research purpose due to the fact that it is a detailed and comprehensive analysis of a single case - Växjö region, including Växjö Kommun and local entrepreneurial initiatives.

2.1.1 Case study

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do not have any behavioral control over the events that they are studying, and when their focus of the study contemporary. Moreover, Bryman and Bell (2015) explained that a case study is often related to the study of a “bounded situation or system” in a special geographical location. In this study it is the municipality of Växjö.

Schramm (1971) explained that the case study intends to underline several decisions that have been decided: “Why were they taken?”, “How were they taken?” and “What were the results?”. Blatter and Haverland (2012) explained that a case study intends to discover “causal mechanism” instead of the “causal effects”.

Case studies are reputed to be ideal for the investigation of new, complex or abstract phenomena (Blatter and Haverland, 2012). Yin (2018) mentioned three types of case studies: explanatory, descriptive and exploratory. A case study that answers questions like "how" and "why" (Yin, 2018) and that tries to explain causal relationships (Fisher and Ziviani, 2004) is explanatory. A descriptive case study aims to depict a realistic profile of the events, the people, or the situations involved in the study in order to give the reader information about these topics. An exploratory case study aims to understand what is happening and get some insights about a topic (Saunders et al., 2012). It also tries to explain a situation with the theory available at a moment, as described through Graham Allison’s study in Yin (2018).

In order to conduct a meticulous study, Yin (1999) listed several characteristics that one should follow to create a rigorous case study:

• “Using a design orientated definition of case study”

• “Generalizing from case study”

• “Identifying the case”

• “Operationalizing the case”

• “Maintaining discovery and flexibility”

• “Using rival explanation as a design strategy”

• “Triangulation: Collecting evidence from multiple sources”

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More importantly, Stake (1995) emphasized that the selected cases should be based on the objective to learn something from the subject. By selecting a new subject such as the circular economy and its influence on entrepreneurs, the authors of the current study aimed to learn from both disciplines.

Saunders et al. (2012) make the distinction between a single case study and a multiple case study. A single case study is often selected for its rarity and its lack of consideration. A multiple case study is chosen when considering a replication of the research. A multiple case study also allows researchers to use an abductive approach to analyze results and future findings (Yin, 2009). Another distinction that Yin (2009) made is the holistic case study versus the embedded case study. The holistic case study focuses on the entire organization while the embedded case study focuses on a part of the phenomenon. In this thesis, the authors opted for a multiple case study where the local entrepreneurs and organizations were the unit of analysis. An embedded case study was chosen since the research focused on the local entrepreneurs and organizations.

2.1.1.1 Unit of analysis

Bryman and Bell (2015) suggested that it is essential to define the unit of analysis when performing a case study. This can, for instance, include societies, organizations, groups and individuals (Bryman and Bell, 2015).

Local entrepreneurs and organizations were chosen as the key unit of analysis for this research since the intent was to gain insight into how circularity is implemented in the local context. Thus, it was essential to conduct interviews with those entrepreneurs and organizations that have either in-depth knowledge of circular economy or hands-on experience of implementing its chands-oncepts.

2.2 Deductive, inductive and abductive theories

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theory, in contrary, is the reversed outline where data is gathered first and theory is the outcome (Bryman and Bell, 2015).

Saunders et al. (2016) explained that in the process of qualitative research, in practice, neither inductive nor deductive are used alone. In fact, researchers use the previously described iterative method which consists of going back and forth between theories and data. Moreover, to further highlight the differences, the iterative method differs from the abductive because it aims to draw only from the theory (Bryman and Bell, 2015), while the abductive method can also use creativity and instinct (Danemark et al., 2002) in order to draw conclusions.

Abduction aims to analyze a phenomenon or an event which is connected to either a frame of interpretation or a theory, in order to make new suppositions or new interpretations (Danermark et al., 2002). Abduction produces conclusions which are based on suppositions instead of certain realities. Abduction is the science of “how this phenomenon might be” instead of “how this phenomenon is” (Habermas 1973). The authors of this project aimed to conduct a study that adopts both iterative and abductive thinking. The reason for this choice is the necessity of understanding the process of circularity, and, more specifically, the complex process that links opportunity recognition, municipalities’ policies and entrepreneurial behavior. Another reason is the fact that the authors wanted to leave an open door for creativity, instinct, and interpretation in the project management. In the frame of the research, they intended to be able to go back and forth between theory and practice.

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2.3 Epistemological considerations

MacIntosh and O'Gorman (2014) suggested that epistemology should be defined as the way in which valid knowledge is gathered. Epistemological considerations are normally considered by researchers when questioning acceptable knowledge within a discipline. In particular, it is widely discussed whether the same procedures, principles and ethos should be applied when studying social sciences as when studying natural sciences (Bryman and Bell, 2015).

In general, two key epistemological considerations contrast with each other: positivism and interpretivism. Positivism is used in several ways and entails elements of both deductive and inductive theory. Certain characteristics distinguish positivism. First, the obtained knowledge should have the possibility to be verified by senses. Second, the key purpose of performing the literature review lies in outlining hypotheses, testing them with the help of acquired data and providing explanations as to why things are the way they turned out to be. Third, knowledge should be confirmed with facts. Otherwise, it is not valid and should be ignored. Fourth, science should remain as objective as possible. In other words, value-free. Last, both scientific and normative statements should have a clear distinction between them. Interpretivism, on the other hand, dictates that the subject matter of natural sciences is radically different from that of the social sciences. Therefore, when studying either of them, a different logic of research procedure is required (Bryman and Bell, 2015). In order to decide upon whether positivism, interpretivism or other ontological considerations should be utilized, it was important for the authors to review all of them first. The decision will be presented in the next subchapter.

2.4 Ontological considerations

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social entities: either they are objective entities or social constructions. The former have a reality external to social actors, while the latter are based upon actions and perceptions of social actors (Bryman and Bell, 2015).

There are two ontological considerations that seem relevant to mention: objectivism and constructivism (also known as constructionism). Objectivism implies that there are external facts (social phenomena in particular) lying outside the relevant reach or influence. For example, this could include a company’s mission statement, hierarchy, division of labor and other standardized procedures. Constructivism, on the contrary, asserts that social phenomena are not predefined and, thus, are constantly revised (Bryman and Bell, 2015).

In order to understand the research paradigm of this thesis and, subsequently, choose the most suited research method, it was necessary to take into account both epistemological and ontological considerations. Thus, the focus is placed on interpretivism (understanding of the social world) and constructionism (interactions between individuals result in social properties).

2.5 Axiological considerations

According to Saunders et al. (2012), an axiology approach reports the researchers’/students’ own values in order to bring more credibility to the project. In other words, authors should be aware of their own values before conducting the study in order to avoid misinterpretation of data during the analysis. MacIntosh and O'Gorman (2014) agreed with such a definition and emphasized the nature of such values: ethics, aesthetics or religion. Without outlining the whole statement of their personal values, as suggested by Saunders et al. (2012), the authors of this thesis would like to point out that they both have a common interest in entrepreneurship, sustainability and social change. Thus, their values emerge from the mutual interest and comprehensive education within the field.

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Both researchers have worked on circular projects and support sustainable values. Both are studying entrepreneurship at a master’s level. The conclusions that can be taken at the end of this paper reflect a deep desire to help the field of the circular economy, entrepreneurship, and sustainability to expand and have more implications in real life. The authors’ axiological consideration aims to reveal any possible truth from the studied situation. The goal is to bring knowledge to correct or to promote the circular economy through the lens of entrepreneurship students.

2.6 Reviewing the literature

Literature review is, without a doubt, one of the most fundamental parts of an academic work and master’s thesis in particular. Since it has a tremendous impact on all the stages (from research purpose formulation to conclusion) of thesis work (Bryman and Bell, 2015), it is vital to discuss it in detail.

Bryman and Bell (2015) suggested that literature review is based upon two key principles. First and foremost, researchers should clearly define the boundaries of what will be included into the study and what will remain irrelevant. The second principle is that researchers should avoid sole reproduction of the data and, instead, focus on interpreting information by, for instance, organizing it into relevant themes (Bryman and Bell, 2015).

The authors of this thesis strove to accomplish this with the highest quality possible. Thus, they carefully considered all the scholars' recommendations for performing the literature review. The literature review has been limited to only peer-reviewed scientific articles from reliable sources. This decision will have a direct effect on the paper’s credibility and trustworthiness (Bryman and Bell, 2015). What is more, the research area has been narrowed down by outlining certain delimitations in the very beginning of the paper.

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is also a notable tendency to prioritize qualitative data when reviewing previous research results. By contrast, the systematic method usually accompanies papers that have specific purpose and research questions straight from the beginning. When utilizing the systematic method, researchers strictly follow predefined keywords and search terms when looking for scientific articles. They also prioritize evidence-based quantitative data when reviewing previous research results (Bryman and Bell, 2015). Taking this into account, the decision was made to use the systematic method for this research as there was a clearly defined purpose and research question and the exact keywords and search terms to be used when looking for scientific articles were known. It is crucial to note that there was a minor integration of narrative method, as quantitative data was not prioritized over qualitative. Instead, both were reviewed. In order to illustrate the literature review strategy, two tables were created. Table 1 illustrates the key topic that was chosen for the literature review, circular economy, as well as the filters that were applied and the number of articles found. First, a search for “circular economy” was run without applying any filters. Then, three filters were added: peer-reviewed, English and publication date between 2010 and 2020. Last, “circular economy” was searched together with other keywords (Table 1) without applying the three previously mentioned filters.

Table 1. The key topic of the literature review, filters that were applied and the

number of articles found (via OneSearch)

Filters Topic

Circular economy (CE) 84,100

Peer-reviewed + English + Publication date (PR + E + PD): 2010 - 2020

41,888

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“Social change” + CE + PR + E + PD 43,510 “Entrepreneurship” + CE + PR + E + PD 3,838 “Public agency” + CE + PR + E + PD 13,726 “Municipality” + CE + PR + E + PD 3,557 “Sweden” + CE + PR + E + PD 7,200 “Småland” + CE + PR + E + PD 11 “SMEs” + CE + PR + E + PD 1,562

It is noteworthy that even though the authors tried to focus on articles that were published during the period of the past ten years, some of them were published earlier. A decision to include these articles was made due to the fact that there were widely recognized authors and their academic work is considered fundamental within the field. Regardless of the publication date, all articles mentioned in the theoretical framework are peer-reviewed.

Table 2 illustrates both the databases and tools that were used when preparing for the

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Table 2. Databases or/and tools that were used when performing the literature review

Database or/and tool

Primary purpose of usage

OneSearch This database served as one of the main sources of peer-reviewed scientific articles

Business Source Premier

These databases were used as additional sources of peer-reviewed scientific articles. Articles which fit the search criteria and were found in all three of these databases were reviewed as well.

Emerald Insight

Science Direct

Scopus These tools were primarily used to find the number of citations in articles and subsequently identify the most frequently cited articles/authors.

Web of Science Google

Scholar

Ulrichsweb This tool served the purpose of confirming that the articles were peer-reviewed and providing detailed information about the journals.

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2.7 Qualitative research methods

It was crucial to discuss both quantitative and qualitative research methods before arguing which method was the most relevant for this thesis. Based on Bryman and Bell (2015), researchers utilizing quantitative methods concentrate on numerical data collection. When choosing quantitative research methods, they also follow deductive, positivist and objectivist approaches. By contrast, researchers proceeding with qualitative methods prioritize words rather than numbers. Thus, researchers follow an inductivist, constructionist and interpretivist approach when working with qualitative research methods. However, not all three of them are necessarily utilized at the same time (Bryman and Bell, 2015).

In this research, the focus was placed on qualitative research methods and, in particular, data collection through interviews that were conducted with the representatives from both Växjö Kommun and local entrepreneurs and organizations. As it was important to get a deeper understanding of the phenomena (circular economy in the local context), quantification was not emphasized in the collection and analysis of data.

2.7.1 Interviews as the main source of data collection

It was crucial to present possible interview types and argue for the one that the authors considered the most suitable for the purpose of this paper.

Eriksson and Kovalainen (2016) suggested that there are three key interview types. The most noticeable difference between them is the extent of both formality and freedom that not only the interviewer but also the interviewee has.

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of the questions. Otherwise, interview structure and content are strict and are decided well in advance (Eriksson and Kovalainen, 2016).

By contrast, the second interview type grants more freedom to both the interviewer and the interviewee and is called “guided and semi-structured”. The overall style of such an interview type is quite informal and even conversational in some cases. Ideally, the interviewer is responsible for creating a list of questions, organized into themes. While asking questions, it is possible to change the order of pre-written questions and use synonyms, depending on the circumstances (Eriksson and Kovalainen, 2016).

The last interview type is called “informal, unstructured, narrative and open”. When choosing this interview type, the interviewer should at least decide on the topic prior to the interview. In some cases, it is also advised to write down a set of guiding questions. However, it is not mandatory to do so when utilizing this type of interview (Eriksson and Kovalainen, 2016).

For this thesis, it was decided to follow the “guided and semi-structured” interview type for all the interviews that were conducted. The main reason for this choice was the desire to have a predefined set of questions that were organized into themes. By doing that, it was possible to take into account all of the information covered in the previous research and reflect upon the research purpose of this thesis. At the same time, flexibility was desired in terms of the questions and, in particular, their order. This made it possible to get a deeper understanding of the topic.

Furthermore, the authors collected and analyzed secondary data that is presented later in this paper. The secondary data served the purpose of assisting the authors with development of the interview questions. In particular, it provided them with a deeper understanding of both circularity and sustainability within the region of Växjö. 2.7.2 Design of interview questions

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general rules of interviewing, it was important to become familiar with the possible question types.

Eriksson and Kovalainen (2016) outlined five types of interview questions. Each type has two options that contradict each other. Hence, it was crucial to consider all the five types and use the relevant ones. All five types were presented (each with two options, for a total of ten possible options), and an argument was made for the ones which were chosen.

The first type gives a possibility to choose between open and closed questions. The choice between these two options lies in the interviewer’s motivation for either acquiring in-depth knowledge or getting facts. The second type deals with the complexity of the interview question. Thus, it should be decided whether simple or complex interview questions will be chosen. The third type provides a choice between neutral and leading questions. It should be pointed out that it might be more polite to ask neutral questions due to the fact that leading questions might provoke negativity and irritation. The fourth type suggests that interview questions should be either direct or indirect. Interviewers should bear in mind that, under certain circumstances, direct questions (including but not limited to age, race, religion etc.) can be quite rude. However, direct questions can also provide the interviewer with specific information. The fifth type concerns primary and secondary interview questions. In some cases, it is useful to include secondary questions with the purpose of acquiring more information about the subject of interest. At the same time, secondary interview questions might serve the purpose of clarifying certain data (Eriksson and Kovalainen, 2016).

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they were mainly asked to entrepreneurs in order to determine whether they considered Växjö Kommun as their stakeholder and why.

2.7.3 Sampling: respondents and their background

This subchapter is dedicated to describing an essential part of the paper, sampling. The table below illustrates the sampling for the interviews, including respondents, interviewees’ background, interview dates, interview durations and notes. Such a visual tool helped to visualize the sampling for interviews and make the processes of both data collection and analysis more transparent.

The sampling method used was purposive sampling, also known as judgmental sampling (Neuman, 2005). Purposive sampling means that the authors used their own judgment to select their cases and meet their objectives. Here, the authors focused on people that had experience related to circular businesses, sustainability and entrepreneurship, according to the criteria that were set along with the R-imperatives earlier. The goal was to have participants who were aware of their actions toward circular economy. It helped to support the research question and purpose while trying to understand the case of the Växjö region. The authors mostly selected information-rich cases in line with the objectives of the thesis. As suggested by Patton (2002), the necessary kind of sample was defined before posing the questions. Moreover, in accordance with abductive reasoning, theoretical sampling was also used which consisted of interviewing when it was needed (Saunders et al., 2012). As the focus went back and forth between the theory and the collection and analysis of data as needed, this type of sampling helped allowed for adjustments according to the data which was gathered.

Table 3 visualizes and summarizes the sampling for the interviews. Interview

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Table 3. Summary of sampling for the interviews. Respondents Interviewees’ background Interview dates Interview durations Notes A Advisor for entrepreneurs in the Växjö region March 25, 2020

16 minutes A encounters new entrepreneurs who wish to create their company B Company owner – Furniture repair March 26, 2020 50 minutes C Runs different projects: Makes smoothies out of wasted food; Cooking session using wasted food; Catering using wasted food

April 02, 2020

42 minutes Researchers have already taken part in some of their projects

D (3 people) Farmers April 03, 2020

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E Farmer; Organizes cooking sessions out of the wasted food; Teaches farming to children; Plans to open an aquaponic farm April 05, 2020 1 hour 11 minutes F Head of the sustainability department at Växjö Kommun April 16, 2020 33 minutes G Responsible for the recycling center in Växjö April 21, 2020 37 minutes H Responsible for

the waste plan of Växjö region

April 22, 2020

25 minutes

The simplified version of this table is presented in the “Presentation and analysis of collected data” chapter and, particularly, in Table 4.

2.7.4 Business research ethics as an integral part of preparations for the interviews

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important to be aware of anticipated issues that might occur during the research process in order to protect respondents, develop trust and promote integrity. It was also important to avoid revealing organizations' malpractices (Creswell, 2014). To do so, Creswell (2014) advised several subjects to consider before and during the research process. Below are different subjects that were considered while generating the interview questions and performing the interviews:

• Think about how this project can benefit the respondents: the goal was to understand the situation in order to describe it and find way to improve it. the authors attempted to consider the emotional attachment people could have for their project to understand a process instead of a judgment.

• Avoid deception by describing and communicating the purpose of the study.

• Not force people to participate or to sign documents, not exploit them: The purpose of the interview was described to all of the interviewees in a personalized email, along with the reason for contacting them. The authors adapted to their schedules and gave the choice of the times of the interviews to them. During each interview, the authors asked for permission to make an audio recording, and the interviewees were told that they shouldn’t answer questions they did not like.

• Make sure that the participants receive the same favors by, for instance, sharing the results of the study with everyone: The researchers planned to send the research to all of the respondents when the work was completed. The same tone was adopted and the same approach concerning the questions was used during each of the interviews.

• Make sure not to take a side in the treatment of the data collected and report all the gathered data: During the interview, the researchers spotted frustration and interpretations. These were recognized, and attempts to not emphasize them were made. It was recognized that people could have emotional attachment to their project and that their judgment could be biased.

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if they wanted their profile hidden or not. All of them answered that their own name could be used. However, we decided to anonymize everything as it is usually done in order to avoid unwanted aftereffects.

• Transcribe the interview in the objective way without falsifying, creating or interpreting the results: All the interviews have been transcribed on a word-by-word basis in order to avoid any interpretation. The answers are not reformulated, they are purely transcribed.

• Validate the collected data, mostly when it is qualitative, by asking confirmation from the people whom were interviewed.

Another consideration to have is data management. According to Bryman and Bell (2015), sharing of the data should be explicit before the project. Acknowledging that entrepreneurs and Växjö Kommun might have private strategies about sustainability, an initial conversation was made between the researchers and the respondents. 2.7.5 Process of conducting interviews

It is important to outline some of the practical sides of the interviews that were conducted. Potential respondents were contacted via email and social networks well in advance, and they were provided with all the relevant information regarding the purpose of contacting them, who the researchers were, the purpose of the research and how they can contribute, information on confidentiality and a question of whether they would be able/willing to participate in the research.

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the authors of this paper need to first contact the respondents to get their permission to provide the interview transcript.

The authors also informed the interview respondents that in case of any sensitive question, they were not required to answer, and were free to tell the interviewer if they that they wanted to skip it. Luckily, all of the questions were answered and none of them was considered too sensitive.

What is more, it was important to integrate the “open coding” of Grounded Theory (Saunders et al., 2012). Thus, we carefully considered dividing the interview questions into themes. Not only did it improve to the interview structure but also it made the process of analyzing qualitative data a lot easier. At the same time, the number of interview questions depended on the researchers’ prediction of how much data was necessary to collect and, most importantly, it was desired to have enough flexibility in order to ask the most relevant questions. In other words, the “guided and semi-structured” interview type allowed the researchers to have enough room to be adaptable to the situation during the interviews.

A list of the interview questions for the entrepreneurs can be found in “Appendix 1 – Interview questions for entrepreneurs”. Questions for Växjö Kommun can be found in “Appendix 2 – Interview questions for Växjö Kommun”.

2.8 Qualitative data analysis

The key attribute of qualitative data and its analysis lies in the fact that it is a large corpus of disorganized data. Various documents, interview transcripts and notes are examples of textual material that is generated through qualitative data collection. Researchers should bear in mind that such data is not straightforward to analyze, especially due to the fact that no clear-cut rules exist. Only general approaches to qualitative data analysis have been developed and suggested to researchers (Bryman and Bell, 2015).

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identified. The ultimate goal of a researcher, in that case, is to find a universal explanation of studied phenomena. Grounded theory, at the same time, suggests that there is a close relationship between collected data, its analysis and subsequent theory, developed on the basis of analyzed data. Scholars noted that the data should be not only collected but also analyzed systematically (Bryman and Bell, 2015).

Saunders et al. (2012) defined grounded theory as a method for analyzing data that follows strict procedures. There are multiple methods of applying grounded theory, but the authors decided to focus on the one suggested by Charmaz (2006). In his technique, after gathering the data, the researchers first needed to label them. This was called the “initial coding” and it helped to generate an important number of themes in the data. This important number of themes helped to analyze the frequency and relevance of what was said during the data collection.

Once the “initial coding” had been done, the authors focused on the second type of coding, called “focus coding”. It consisted of rearranging the labels from the initial coding to put them into broader categories. Once those labels had been put into the new categories, general themes emerged from the collected data, allowing the analysis to be more structured.

They differ in a way that their investigations have different orders. For the purpose of the thesis, the Charmaz technique was adopted. It means that data would be labeled at first, which is called the “initial coding” and then put in a more general section, called “focus coding”. This technique helps to differentiate the themes from the qualitative data in order to make a structured analysis. From the pure data, they were transformed into a conceptual unit that thereafter constitutes part of the analytical subchapters.

The classification of the data appeared during the data analysis. After transcribing the interviews, the acquired material was read and labels were added to it when new types of data were found. This is what Charmaz (2006) calls the initial coding.

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First, they transcribed the interviews from audio with the help of the website Otranscribe, which made the transcription easier. This resulted in a total of about 50 pages of transcripts. Second, they collected of the interviews in a Google Docs document. The interviews were classified depending on the date of transcription, which was the same at the date of recording. During the process of analysis, themes emerged from the respondents. Following the grounded theory method and the “initial coding” phase, a unique color for each theme was assigned. That was done by assigning colors to different labels.

This resulted in a total of 15 themes:

• Business-laws

• Ideas and implementations

• Connections and networks

• Customers, activities and operations

• Sustainability

• Future and expansion

• Limitations

• Relations with Växjö Kommun and the Växjö region

• Thoughts about waste

• Ideas for acquiring waste material

• Other types of existing projects

• Local context and use of opportunities

• Circular/sustainable values

• Changing people’s behavior

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Once those themes were defined, the colors allowed the authors to identify them in the data. The themes were then further categorized into three groups although some fit into more than one:

• Visions and conviction concerning circular economy

• Växjö and its municipality

• The ability to run an organization

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3 Theoretical framework

This chapter is dedicated to presenting theories that are relevant for the purpose of this research paper. The theory mentioned in this chapter was used when preparing for collection of empirical material, conducting interviews and analyzing data. The chapter is divided into three subchapters: circular economy, entrepreneurship and the connection between them. The existing literature is presented, along with remarks from the researchers integrated into the text. The theoretical framework helped to a great extent with understanding the field, analyzing empirical material and answering the research question. Since the abductive approach was utilized in this paper, more theories were added to this chapter once the primary and secondary data were collected.

It is noteworthy that systematic literature review was used when searching for articles and the argument for choosing this method has already been presented earlier in this paper. What is more, themes were used when analyzing and organizing the literature. These themes helped with structuring key findings in a way that was beneficial for the research.

3.1 Circular economy

Circular economy was considered as one of the most essential topics for this paper and thus it was crucial to perform a meticulous literature review related to it. This chapter is structured so that theory is organized into themes and is combined with the researcher’s arguments.

3.1.1 Definition, emergence and implications

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The circular economy was firstly mentioned by Boulding (1966) and further conceptualized in the book Economics of Natural Resources and the Environment by David Pearce and Kerry Turner (1989). Currently, circular economy is widely discussed around the world. It is promoted by businesses, several national governments and the EU. However, circular economy is currently comprised of vague concepts that arise from various fields (Korhonen, Honkasalo and Seppälä, 2018). Therefore, it is so crucial to find all the reliable information about it and also contribute to the field with some new research results.

In order to better understand the key idea behind circular economy, it is important to present linear economy and then highlight dissimilarities.

The World Economic Forum (2014) noted that the linear economy takes roots from the early days of industrialization and has been dominant ever since. Since the times of the industrial revolution, we have been living in a linear economy that affected all sectors of our lives due to its “single use” philosophy that, in turn, became a lifestyle for many generations (Esposito, Tse and Soufani, 2018).

Circular economy’s strategy starts from extracting the natural resource, turning it into a product that has a certain economic value and, eventually, using this value as many times as possible (Korhonen, Honkasalo and Seppälä, 2018). Four key characteristics peculiar to the definition of the circular economy are: retrieval of value from waste, diminishing demand of resources and recirculation of energy and resources, multi-dimensional approach, pathway to sustainable future and innovation practices. These characteristics serve the purpose of being the basis for scholars’ consensus within the field (Prieto-Sandoval, Jaca and Ormazabal, 2018).

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Importantly, for both humanity’s and earth’s biosphere to thrive, consumption patterns should be amended (Franklin-Johnson, Figge and Canning, 2016). There are a few key drivers of circular economy that Veleva and Bodkin (2018) highlighted, namely zero waste goals and general sustainability commitment followed by not only municipalities but also companies. The most noticeable effect that the circular economy has on the economic system is that it increases its sustainability while promoting recycling, repairing and reusing. Hence, companies are showing more and more interest in researching the concept and finding ways to incorporate some of the key features into their business models (Elia, Gnoni and Tornese, 2017).

Circular economy is normally accompanied by establishment of new network relationships. For example, such networks can be related to recycling, sorting of product elements, classification, dismantling, reverse logistics and so forth. Customers that play an essential role within the circular economy consider their ownership of a product temporary and, most importantly, expect to part-exchange, sell, share, repair, update or return it at some later stage of the ownership (Spring and Araujo, 2017).

Spring and Araujo (2017) suggested that circular economy is ecologically inspired. In other words, its emergence depended greatly on the society’s concerns for environment-related issues. Prieto-Sandoval, Jaca and Ormazabal (2018) dedicated a significant part of their research to determining whether eco-innovation can be considered a substantial part of the circular economy. They concluded that eco-innovation plays one of the central roles within the field as it fosters development of innovative solutions for how circular economy can be implemented within legislation, production and consumption (Prieto-Sandoval, Jaca and Ormazabal, 2018). Korhonen et al. (2018) concluded their work by stating that circular economy is an emerging approach rather than a trendy theory. In fact, the approach concerns industrial production and consumption. Circular economy attracted a variety of companies and organizations through demonstrating its unique value and power (Korhonen et al., 2018).

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and high value material cycles. The second concept highlights the opportunities related to the sharing economy and, particularly, sustainable production (Korhonen, Honkasalo and Seppälä, 2018). Spring and Araujo (2017) noted that circular economy has a tremendous effect on product biographies, particularly when reconfiguration of networks is taking place. As a result, new entrepreneurial opportunities emerge within the society (Spring and Araujo, 2017).

3.1.2 Circular economy as opposed to other economies

Considering that linear economy as opposed to circular economy has already been briefly discussed, it was decided to dedicate a separate subchapter to this topic in order to draw attention to the fact that current models were obsolete, and society should reconsider consumption of resources.

Stahel (2016) outlined three kinds of industrial economy, namely linear, circular and performance. Linear economy’s key idea lies in converting natural resources into value-based materials and products. Circular economy, on the other hand, focuses on reprocessing products and materials with the end goal of reducing both resource consumption and waste. At the same time, it facilitates generation of jobs on the market and energy preservation. Meanwhile, the performance economy’s central point is about sharing, leasing and renting products and services (Stahel, 2016). The Ellen MacArthur Foundation (2015) highlighted the difference between circular economy and linear economy in terms of production and consumption. One of the key features of the circular economy is that it is restorative by design. Another important aspect is that it constantly strives to keep materials, components and products at not only their highest value but also utility. Meanwhile, “take-make-dispose” perfectly describes the approach undertaken within the linear model (Spring and Araujo, 2017).

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and Chiaroni, 2017). Undoubtedly, it is appealing to people around the world to transition from a wasteful (linear) to cyclical, reproductive and restorative economy. Thus, various sectors are working together with the common purpose of researching, framing and implementing the most promising strategies (Korhonen et al., 2018). 3.1.3 Barriers for the implementation of circular economy

It was important to consider the barriers for the implementation of the circular economy to be prepared for the empirical part of this paper. In particular, this subchapter brought awareness to potential barriers that entrepreneurs faced in their journey to become more circular. At the same time, theory mentioned in this subchapter enriched the researchers with valuable insights that were further used when creating the interview questions.

Even though circular economy is widely discussed in the EU, there are numerous barriers that impede its successful implementation. Kirchherr et al. (2018) noted that absence of synergistic governmental interventions to stimulate the circular economy drives the market barriers that, in turn, create cultural barriers. Most importantly, two cultural barriers are considered critical by both policymakers and businesses. Namely, hesitant company culture and lack of consumer awareness and interest. These barriers can, under the worst scenario, derail the transition towards the circular economy. At the same time, technological barriers are not considered to be significant and can be conquered without difficulty (Kirchherr et al., 2018). The central point of circular economy is to generate value by the means of material retention, while other burden-oriented techniques focus on evaluating resource use in relation to its value. Hence, current techniques are obsolete, especially when guiding decision-makers to achieve circular economy objectives (Franklin-Johnson, Figge and Canning, 2016). Additionally, there are certain barriers that can hinder expansion of the circular economy, including several financial factors and the availability of technical solutions (De Jesus and Mendonca, 2018).

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Mendonca (2018) noted that there are certain barriers and drivers that accompany development of the circular economy. Interestingly, “soft” factors such as institutional, regulatory and social, boost the global influence of the circular economy. Both economic and market limitations occur in cases when practical implementation of technically viable circular economy solutions take place (De Jesus and Mendonca, 2018). Eco-innovation is acclaimed as a crucial pathway for conquering barriers to a circular economy transition (De Jesus and Mendonca, 2018).

Kirchherr et al. (2018) highlighted that the circular economy is gaining momentum. However, even though the concept interests sustainable development professionals, governments, industry and academia remain fairly hesitant in terms of its actual implementation. It is noteworthy that circular economy’s theoretical basis is underrepresented within the literature Martins (2018). Homrich et al. (2018) stressed the absence of a convergence and general consensus in the literature on circular economy. In particular, they pointed out that the definitions and terminologies lack mutual points (Homrich et al., 2018).

3.1.4 Predicted future of circular economy

The authors of this thesis understand that entrepreneurial initiatives, regardless of the industry, plan their business strategies for a number of years in advance. Therefore, it was decided to mention scholars’ predictions of the circular economy and how it will develop in the foreseeable future. Not only did it help to figure out potential ways of how the concept will develop further but also served as an important factor in the research discussion and conclusion.

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Currently, forward flows (linear economy) are prioritized. Secondly, authors mentioned relative immaturity of the systems that are dealing with such an important matter as qualification of both materials and end products (Spring and Araujo, 2017). Managers are advised to follow three recommendations that will assist them with significantly increasing material retention. First, it is vital to promote longer lifetime use of resources. Second, it is essential to extend product return levels for both refurbished and initial use products. Third, the recycling process should be chosen wisely in order for it to be effective (Franklin-Johnson, Figge and Canning, 2016). Unruh (2018) developed a management framework that is biomimicry inspired. It is particularly useful for managing circular economy initiatives, especially those that revolutionize industrial sectors. For example, within three-dimensional (3d) printing (Unruh, 2018).

Within the strategic management field, scholars are facing difficulties with developing a framework that can assist businesses with either creating a new business model or adapting the existing one(s) in order to become more circular (Urbinati and Chiaroni, 2017). Urbinati and Chiaroni (2017) concluded their extensive research by outlining four models through which companies create circular business models, including full circular, downstream circular, upstream circular and linear.

Companies that create new and innovative business models by embracing circular economy principles within their value proposition are, without a doubt, playing a crucial role in supporting and promoting sustainable development. Manninen et al. (2018) made a significant contribution to development of a functional framework that assists companies with evaluating their environmental value propositions within their business models. This framework comprises two key components, namely a step-by-step approach to the assessment process and an environmental value proposition table (Manninen et al., 2018).

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Moreover, an international framework for ERP should be developed and implemented along with realistic targets for waste collection and its further usage (Kunz, Mayers and Van Wassenhove, 2018). Franklin-Johnson, Figge and Canning (2016) contributed by developing the longevity indicator (performance metric) that measures three potential lifetimes of a resource: earned recycled, earned refurbished and initial. This indicator is believed to be of a high value in terms of both performance assessment and decision making within the circular economy (Franklin-Johnson, Figge and Canning, 2016).

Through performing an extensive literature review, Korhonen et al. (2018) suggested that the research within the circular economy is emerging. The focus within the existing literature is on concrete computations, instruments, tools and metrics. At the same time, there are four key models that are widely discussed in the literature, including “waste management”, “product reuse”, “remanufacturing” and “closed loops” (Korhonen et al., 2018). Homrich et al. (2018) noted that there is increasing interest in the topic of circular economy and predicted an abundance of literature within the field in the coming years.

3.1.5 Partnerships as a way to achieve circularity

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entrepreneurial companies. By doing so, they create new business opportunities that, in turn, bring unique value to society and save the planet. For example, in the US, more and more large corporations are collaborating with entrepreneurs with the common purpose of promoting product reuse and reducing waste. This happens even despite the lack of federal regulations. By working together towards a common goal, both parties gain quite a lot, including but not limited to knowledge, technology and resources. What is more, such collaboration reduces costs and, ideally, encourages emergence of innovative business models that focus on circularity (Veleva and Bodkin, 2018).

The role of public agencies should not be underestimated as they have a vital role in the institutional framing, from legal set-ups to infrastructures (De Jesus and Mendonca, 2018). The most critical step that should be undertaken by the government is stepping up in a timely manner in order to retain circular economy’s momentum. Kirchherr et al. (2018) suggested two potential solutions for conquering the barriers of circular economy’s successful implementation. First of all, they advised governments to ease-out subsidies that foster consumption of linear products. Secondly, governments should develop policies that favor circular products. This strategy can be achieved through adjusting value added tax (VAT). For instance, by reducing it for products involving reparation pracices. Eventually, such a strategy may foster the implementation of the circular economy. Authors concluded that the proposed solutions cannot guarantee the success of the whole transition from linear to circular economy (Kirchherr et al., 2018).

3.2 Entrepreneurship

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3.2.1 Definition and factors that distinguish entrepreneurial initiatives from well-established organizations

Løwe Nielsen et al. (2017) pointed out that both the definition and interpretation of entrepreneurship differ noticeably across industries where it is present. Authors also noted that entrepreneurship exists in a vast variety of different industries, from aerospace to real estate. Its key idea is to introduce a useful, innovative and, under the best scenario, sustainable product or service to the market. At the same time, entrepreneurship strives for bringing positive change into both society and already existing organizations. Nonetheless, entrepreneurs are known for possessing a relatively independent way of working and demand for personal accomplishment. Most importantly, both society and existing organizations usually benefit from the emergence of entrepreneurs. For instance, society can become more prosperous due to general economic growth in the region, creation of new jobs and many other aspects that directly or indirectly foster the change. In other words, both entrepreneurs and society have mutual values. Established organizations, on the other hand, normally tend to hire entrepreneurial-minded people as they can propose new business development recommendations thanks to their ability to identify and embrace opportunities (Løwe Nielsen et al., 2017). Berglund, Johannisson and Schwartz (2012) highlighted the same idea in their work and, in particular, emphasized that entrepreneurship has a significant contribution to the development of society in terms of both general growth and wealth-making. Interestingly, over the past decades, this strategy has started to shift towards finding solutions for environmental issues and increasing sustainability (Berglund, Johannisson and Schwartz, 2012).

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Görling and Rehn (2008) introduced an alternative view upon entrepreneurial potential, opportunity discovery and success factors. The authors suggested that the traditional view of entrepreneurial activities consists of goal-oriented actions towards identifying business opportunities and working towards the establishment of a new venture. Opportunity discovery is one of the central actions undertaken by entrepreneurs with the purpose of identifying feasible business ideas (Görling and Rehn, 2008).

Sarasvathy (2001) focused on studying the process of new venture creation and why decision-making plays a vital role in it. The author contributed to the existing literature by distinguishing between causation and effectuation processes. Both can be deployed to pursue the ultimate goal, but there are several factors that differentiate them. The process of effectuation is based upon creativity, imagination and overall freedom. By contrast, the process of causation entails having a limited number of choices and a framework that should be followed strictly. Taking this into account, an entrepreneur should carefully consider both paths and make a decision on which one to proceed with (Sarasvathy, 2001). Dew et al. (2009) concluded their wide-ranging research by stating that entrepreneurs tend to utilize “effectual” logic when framing decisions. In short, such logic implies focusing less on predictive information while paying more attention to establishing a viable business venture, outlining potential markets, investing in a smart way and building long-lasting partner relationships with stakeholders. By contrast, novices tend to follow a “predictive frame” while “going by the book” most of the time (Dew et al., 2009).

Circular Economy in the Växjö Region Master’s Thesis