The Front-End of Circular Innovation in Incumbent Firms

The Circular Economy introduces ambiguity and complexity when developing products and services, by using materials and resources differently; innovations and related business models thus deviate markedly from those evident in the "linear economy". This reshapes the landscape for front-end of innovation activities, being especially challenging for incumbent firms that have long honed their innovation processes toward the dominant "linear" paradigm. Adopting a qualitative inquiry of eight multinational and well-established corporations, this study explores how incumbent firms reconfigure their "front-end" innovation processes as they start developing circular products and services. We conceptualize our findings in a grounded model of the "circular front-end innovation", illustrating how a shift in the dominant logics of incumbent firms-from linear to circular-influences activities in the front-end. We identify how these companies' front-end processes (opportunity identification and idea generation, concept design, and solution development) differ accordingly, with a need to broaden the idea search scope, conceptualize product-business model fit, and discover value from circularity. Our findings provide insights into how circular front-end processes are both constrained and enabled by considerations regarding materials and resource circulation, as well as the anticipation of circular business models, triggered by these considerations.