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Grassroots Thinking and Circular Business Models

The modern world is facing a number of unprecedented challenges – from climate change and biodiversity loss to social inequality and economic instability. Addressing these complex issues requires innovative and holistic approaches, which can offer sustainable solutions to the problems we face. Circular business models have emerged as one such approach that seeks to create economic value while minimizing environmental impact, promoting social equality, and ensuring long-term prosperity. 

by Professor Allen Alexander, Dr Ruth Cherrington and Dr Constantine Manolchev, winners of the Innovation Caucus Thought Leadership funding call, 2022

Different scenarios that have been proposed in the literature which offer a vision for a circular future and illustrate the key changes required to bring these visions to life. These include opportunities for institutional and behavioural changes in addition to technical advances. In recent years, there has been growing interest in the impact of bottom-up, grassroots innovation in the transition to a circular economy. The primary foundation of the concept is decentralised, small-scale manufacture within a self-sufficient local community. Instead of producing for international large-scale commerce, production is for local needs and requirements. This concept aligns with a regional development viewpoint which has led to a surge of efforts targeted at encouraging entrepreneurship at the local level, including government policies, company support programmes, and community-based networks.

To explore the potential of ‘bottom-up’ initiatives and grassroots thinking in developing circular business models, our team of researchers at the University of Exeter Business School looked at the region of Cornwall to build understanding of the concepts and why they’re important to innovation. 

The research was carried out over a period of four months, and involved a combination of a focussed literature review, participant observation and in-depth interviews with stakeholders from business, government and community groups across the region. The research continued by analysing secondary data on local economies and the characteristics of nested entrepreneurial ecosystems.

The project was led by Professor Allen Alexander, a leading researcher investigating the role that innovation and knowledge-based capabilities play in enabling a transition toward the Circular Economy.  The team consisted of researchers with diverse backgrounds and expertise. Dr Ruth Cherrington, who has significant experience supporting circular economy projects and working with the local community, was responsible for coordinating the research. Dr Constantine Manolchev, an experienced researcher in organisational studies, provided key insights into emerging themes and overseeing data analysis.

One of the key findings of the research was the importance of networks and social capital in driving grassroots innovation. The team found that successful entrepreneurs were often embedded in networks of family, friends, and business associates, which provided them with access to resources, knowledge, and opportunities. These networks also played a crucial role in generating trust and reputation, which in turn facilitated business transactions and attracted new customers and partners.

Another important factor was the role of culture and identity in shaping behaviour. The team found that actors were often motivated by a sense of purpose and a desire to make a difference in their communities, rather than purely financial gain. This was particularly evident in regions with a strong sense of regional identity and a history of civic engagement, where entrepreneurship was seen as a way of promoting local development and preserving local traditions.

The research also highlighted the importance of institutions and governance structures in shaping the conditions for entrepreneurship. The team found that regions with supportive policy environments, including access to funding, advice, and training, tended to have higher rates of innovative activity and better economic performance. However, they also identified a number of barriers, including regulatory complexity, bureaucratic inefficiency, and cultural resistance to change.

The implications of this research are significant, as they suggest that efforts to promote innovation need to go beyond simply providing funding or advice. Instead, policymakers and practitioners need to focus on building networks, fostering a sense of community and identity, and creating supportive policy environments that enable entrepreneurs and intrapreneurs to thrive. This requires a holistic approach to regional economic development, which recognizes the complex and multifaceted nature of networks and their relationship to social, cultural, and institutional factors.

Overall, the research provides valuable insights into the dynamics of grassroots innovation and entrepreneurship and its role in regional economic development. By highlighting the importance of networks, culture, and institutions in shaping entrepreneurial behaviour, the team has identified a number of key factors that policymakers and practitioners can use to support and promote entrepreneurship at the local level and beyond.

Click on this link to read the full report.