Exploring business model innovation for circular bio-economy : a case study on aqua-agro interactions in food production on Åland

Abstract: Because of the growing population in the world, leading to increased resource demand and at the same time the need for conserving the environment, there is a growing interest in transitioning from present economic systems to a more sustainable future. Out of this context, the concept circular bio-economy (CBE) is highlighted by policy makers and governments, and adopted by businesses, because it is as a way of decreasing human-induced environmental impacts, generate new market opportunities and use resources more efficiently. The CBE concept aims to replace the fossil-based resources with bio-based resources and change the current linear economies to circular ones. One example of CBE development is the interaction between aquaculture and agriculture, framed as aqua-agro interactions, which is promoted as one way of increasing food production, conserving the environment and ensure food security by taking care of the side-streams and the wasted nutrient flows from each other’s sectors. On Åland, which is an island in the Baltic Sea and a part of Finland, they have both aquaculture and agriculture food production. They also have a newly developed regional food strategy, where the aim is to develop a more sustainable and circular food production. Instead of working from individual circular systems, the suggestion is to implement bio-circular business models where actors on Åland can find circular solutions and together contribute to a more sustainable food system. To succeed with this transformation the farmers will need to change their current business models commonly refers to as “business as usual”. To move away from “business as usual” models and develop new ones that accord with ideas of CBE, firms in particular, has to develop new business models. There is thus a need for research that focuses on sustainable business models innovation that will help the firms realise the opportunities and adoption this new way of thinking. Therefore, this study investigates and critically assesses the criteria for sustainable business model innovation (SBMI) to assist development for CBE with a particular focus on aqua-agro interactions on Åland. An exploratory case study was conducted. Data were collected through semi-structured interviews with eight actors on Åland having a relation to aquaculture and agriculture sectors. The data were analysed through the conceptual framework developed in this study and consisting of analytical labels received from the literature review. The literature review reveal that the concept of cascading bio-based resources and closing resource loops are appropriate concepts to promote business model innovation for CBE development. Further, relevant criteria to facilitate business model innovation in line with these concepts include combination of collaboration, policy and regulation that support innovations, a willingness from the society, and last the need for more research and innovation. The criteria were strengthen by the result of the case study. Findings from exploratory case study research show that in order to develop CBE business models with emphasis on aqua-agro interactions it requires a consensus between the actors that shape the developments in relation to the criteria. Further contribution of this study, is that there is a need to not just innovate business models. Because of the existing system constraints there is also a need for system innovation.