Digital Institutions to Support Data-Driven Circularity Innovation : The Improvement of Textile and Apparel Recycling Processes through Blockchain Technology

Abstract: Purpose - The purpose of this master thesis is to explore if and how blockchain technology can improve textile and apparel recycling processes. It further aims to investigate which institutional and infrastructural preconditions have to be met for it to do so. This research seeks to extend the understanding of the technology’s potential and to derive theoretical and managerial implications. Design/ Methodology/ Approach - The study applies a qualitative, explorative research approach, following a deductive research strategy. Thereby, a theoretical framework was derived based on the results of a literature review. Primary data was collected using the method of semi-structured expert interviews and analysed using the method Thematic Analysis. The sample contained experts from different entities of the textile and apparel recycling industry, namely textile waste collectors, textile waste sorters, textile-to-textile recyclers, manufacturers, recycling experts and digital service-providers. Findings - The results show that blockchain technology in fact holds the potential to improve industry processes through its ability to verify data and assign value. However, the findings suggest that the main challenges of the textile and apparel recycling industry are grounded in its institutional complexity. Therefore, the lack of sufficient infrastructure, information exchange and value creation inhibit the industry from using blockchain technology to its full potential. Implications - To overcome this, it is advised that the individual industry players must collaborate to fulfil the essential institutional and infrastructural requirements. This means creating an inter-organisational network that relies on the exchange of recycling-relevant information, uniform data structures and unified norms and practices. Originality/ Value - Scientific research lacks a coherent understanding of the relation between blockchain technology and textile and apparel recycling. This research bridges this gap by illustrating the industry’s challenges and exploring blockchains potential to address them, while laying out the institutional and infrastructural preconditions for blockchain to contribute to an improved textile and apparel recycling.