Ecosystems as enablers of upscaling
Many companies use a business ecosystem to enable upscaling of their activities. To boost the impact of sustainability business models, identify opportunities and develop capabilities. Upcycling is increasing the added value of waste streams. Partners can play an important role. Even for companies that have moved from start-up to scale-up, the quality of their ecosystems, support systems, are essential for their success. In a research project, we focused on sustainable ecosystems in which societal and environmental contexts were studied.
Through case studies, three student teams - from the Universities of Linköping, Twente and Tilburg – described the roles of ecosystem partners at upcycling businesses good practices. In interactive virtual workshops, we exchanged experiences and discussed the implications of the results of the studies with students and businesses.
All teams used the following methodology:
In all case studies, the following actions were taken:
In the research, we located actors in the ecosystems on their level of support (e.g. EU/National, Federal, local/regional, etc.) along the value chain of the company.
Ecosystem partners can provide support various functions:
In a workshop, Richard Martina, researcher at the Amsterdam University of Applied Sciences HvA introduced the “engagement diagram” as developed by Inge Oskam (2020). The students mapped the ecosystems of their case studies using the engagement diagram.
Klara Smeds and Nathalie Martin, Master students from Linköping University conduced case studies at a start-up (Againity) and a large company in the upcycling business (Techniska Verken). They compared the ecosystems of these companies and distinguished typical Swedish characteristics. According to one of the respondents “the support did no enable the upcaling but made it possible to save time and simplify the upscaling process”. Timely market entry is important to gain competitive advantage. Trade organizations can be crucial. They provide useful information, contacts and lobby for policy instruments. For instance, policies regarding taxes on energy will impact the upscaling process of upcycling companies. The significance of actors for the upscaling process varies depending on the availability of internal resourses.
In both Swedish cases, it was relatively easy getting access to the support functions due to the fact that they are considered to be relevant in the market. The companies are also active in industries working for a common goal – sustainable development. This facilitates collaboration within ecosystems.
Rosan Verbaak and Mart Morsfieft, Master students from Twente University’s green hub followed the same pattern. They made a case study of a start-up (ECOR) and a large company in the upcycling business (Twence). The most important support functions present are the fostering networks and partnerships as well as the prototyping and piloting. Both are needed to enable the technological and commercial growth of a company. Both Dutch companies had fairly easy access to these support functions. In addition, the support was considered to be effective. Rosan and Mart found that prototyping and piloting assistance is crucial for a successful upscaling process as well as fostering networks and partnerships, although the relevance is depending on internal competences. Support by academic institutions in the idea and design phase was important for both, the start-up as well as the established company. It assists a quicker development of innovations and can lead to easier investments by other companies as well as more time available to develop a company.
For an established company, it is easier to receive the support necessary. This support concerns both the idea phase, as well as financing projects. An established firm usually is better known. The Twente team confirmed one of the Swedish conclusions: with the growing importance of sustainability and acting responsibly in the corporate world, offering solutions that not only recycle, but also upcycle several products can provide several benefits. In general, establishing collaborations is relatively easy for an upcycling company due to the fact that the world is in demand for sustainable solutions.
We observed some similarities between the Swedish and Dutch case studies: fostering networks, prototyping and piloting are considered to be crucial support functions within ecosystem. However, there are some differences between the two countries: trade organizations are the most important actors whereas academic institutions, media and governmental organizations are considered to be crucial in the Netherlands.
Next to that, it is mentioned that it is relatively easy to retrieve the support needed for the studied companies in Sweden. For the established company in the Netherlands this would be the same. However, as for ECOR, it is mentioned during the interviews that receiving support could be quite difficult, especially regarding financial support. The fact that Twence had less problem receiving support might be due to the fact that it is a company that is regionally and locally focused as well as that the main shareholders are the municipalities in this region. Therefore, for Twence, it is often easier to require the support needed.
The case studies have shown several crucial factors for a successful upscaling process. The most important factor that should be considered crucial is the amount and types of support present during the upscaling processes. Next to that, the actors involved in the upcycling processes can also be seen as crucial, albeit depending on the type of actor as well as the amount of support given. Lastly, the phases in which actors give support are also important for a successful upscaling process.
Important actors with regards to a successful upscaling process are academic institutions for the further development of innovations, whilst the support of governmental institutions is essential for the actualization and implementation of the upscaling process. Support from governmental institutions is needed because of financial subsidies and other regulatory frameworks, such as permits. For a company that is more regionally focused, it is important to note that societal actors are also of importance for a successful upscaling process, since they decide upon the image that a company has.
In the future, we aim to increase our research to more countries within outside of (Western) Europe because the Netherlands and Scandinavian countries might resemble.
In her Master thesis, Nienke Verenjans from Tilburg University researched the collaboration in ecosystems and the corresponding scale-up abilities. She concluded that entrepreneurs’ vision on circularity differ, as was visualized in engagement diagrams.
Alexander Smaal from Tilburg University researched the selection process of business ecosystem partners and the influence of the identity of founders in these processes.
Lastly, we discussed and exchanged experiences of the case studies. We concluded that apart from the roles of ecosystem partners, also the dynamics in the ecosystem is relevant. Most of the ecosystem actors are concentrated in the early phase (i.e. idea and design phase) of innovation. Academic and governmental actors are important. Academia for the in-depth sustainability knowledge and also governmental agencies for regulation. Business partners in ecosystems supply another type of support, e.g. financial or logistical strength.
Students, businesses and academics discussed the research results. We elaborated on e.g. optimal size of ecosystems (big is not always beautiful), the links with entrepreneurship theory, and new perspectives for research, see video impression below: