Abstract
The place of knowledge management in ensuring effective transition into a circular economy by developing a circular business model as an alternative to the conventional linear economic model is under-investigated. Knowledge coordination, creation, and dissemination capability of a firm are important in developing the green industry and offering new job opportunities. This chapter adopted a literature review approach to establish the link between knowledge management and transition into a circular economy. Findings show that the firm's eco-innovation process depends largely on strategic knowledge management. Therefore, systems understanding and self-motivated creativity are essential professional knowledge levels in developing circular business models for sustainability. Hence, firms need to enhance the knowledge-based for continuous business process improvement, eco-efficiency, and eco-innovation.
TopBackground
The term circular economy is a sustainable economic model developed as an alternative to the conventional linear economic model. The conventional economic model of produce-consume-waste posed a serious challenge to sustainable development. The circular economy as an alternative economic model has a long origin that could be traced back to the 1970s (Allwood, 2014). Specifically, Stahel and Reday introduced some of the features of circular economy in 1976 based on their focus on industrial economics (Geissdoerfer et al., 2017). The authors in their focus on industrial economics came up with the concept ‘a loop economy’ in their explanation of workplace strategies for resource-efficiency, job opportunities, and dematerialisation of the industrial economy. Circular economy became more pronounced as a concept in China in 1998 (Qi, et al., 2016).
Key Terms in this Chapter
System Understanding: An application of the systems understanding in solving complex business problems and add value to innovative performance of an organisation.
Circular Business Model: A sustainable business model developed in response to the global decline in resources or raw-materials, and to address the environmental issues. It is an alternative to linear economic model to promote a more resource efficient production and consumption systems; thereby reducing the environmental impact of human and economic activities.
Resource Recovery: Is a sustainable business model that requires manufacturers to invest in innovative ways of using resources and materials for a long period, thereby creating more than one product use lifecycles.
Eco-Efficiency: A process of reducing ecological damage and at the same time maximizing the efficiency of company’s production process utilising less water, material, and energy while recycling.
Self-Motivated Creativity: The critical level of professional knowledge that promotes critical thinking by professionals for eco-innovation in a circular economy.
Product as a Service: A sustainable business model that enables companies or manufacturers to shift away from selling ownership of their products to customers, to quantifying and selling the utility derived from their products to customers.
Green Industries: A more sustainable pathway for growth, by providing adequate investments for sustainable business solutions and implementing public policy initiatives that encourage environmentally responsible private investments.