Industrial Networks : Purposes and Configurations in the Circular Economy

Abstract: Today, it is common knowledge that mitigation of and adaptation to climate change, biodiversity loss, and pollution require sustainability transitions. An essential sustainability transition, for mitigating and adapting to resource depletion, is the shift from unsustainable to sustainable production and consumption patterns. At the nexus of academic, business, and policy discussions about sustainable resource management is the circular economy concept. Those researching the circular economy advocate that ecosystems in nature should be used as a blueprint for sustainable production and consumption. Ecosystems in nature are complex and dynamic systems which include many diverse and autonomous, yet interrelated and interdependent, parts. Actors will have to search for and establish collaborations with others that control processes that can feed their own or which their own can feed. In other words, actors will depend on a higher degree of relational means, and lower degree of contractual means, when working together.If companies are meant to change how they create and deliver value in the circular economy by configuring circular supply chains that replicate ecosystems in nature, academia needs to produce knowledge on the matter. One requisite is that researchers find ways to study energy and material flows in complex and dynamic systems. Recent literature has emphasized that actors must make apt changes to their supply chain configurations or develop new supply chain configurations that enable collaboration within and across supply chains. Nevertheless, there remains only a limited amount of literature addressing the subject. Several researchers into the circular supply chain have thus identified this as a research gap and argue that there is an urgent need to direct attention to circular supply chain configurations that enable collaboration within and across supply chains. In particular, there are two areas of major importance. Firstly, how collaboration makes actors more dependent on each other and the consequences of this development for issues such as the agency of actors, conflicts between actors, and relationship governance. Secondly, how configuring circular supply chains within and across industrial boundaries need to consider the distance between actors and the effects of product design on the circular supply chain configuration.This thesis, which is located at the intersection of industrial dynamics, industrial networks, and supply chain management, suggests the network as a metaphor for depicting the architecture of such complex and dynamic systems. In particular, interrelations and interdependences between diverse and autonomous parts of the network are studied using the industrial network approach. In essence, the economy is viewed as networks of relationships between the actors which control resources and perform activities. By applying the industrial network approach to supply chain management, this thesis outlines an approach for studying how companies configure circular supply chains for cyclical, restorative, and regenerative energy and material flows.As the state of prior theory was nascent, open-ended inquiries of an exploratory nature were necessary. Accordingly, the research questions were answered using qualitative case studies. The outcome was rich data about unique contexts, which was collected in various ways, such as through interviews, observations, and document analysis. An abductive case study approach, blending inductive and deductive processes, was considered particularly appropriate for studying industrial networks. However, a systematic literature review was also used because parts of the theory behind industrial network configurations in the circular economy are more mature.This thesis makes three main contributions. Firstly, it identifies three purposes of industrial networks in the circular economy. It is shown that industrial networks enable the agency of actors to produce holistic change in the industrial network. However, since an actor’s view of the industrial network is restricted, the actor depends on other actors’ complementary views in order to be able to produce such change. Secondly, this thesis introduces two conceptual frameworks that contribute to the understanding of how to configure industrial networks that enable collaborations within and across industrial boundaries. Thirdly, this thesis supports the idea that product design affects how to configure industrial networks for the circular economy. It also contributes to the literature by arguing that the relationship between product design and industrial network configuration is bidirectional. Product design is a collaborative process which both shapes the future industrial network and is shaped by the current industrial network.