ROLE OF INTER-FIRM NETWORKS AND RELATIONSHIPS IN THE ADOPTION AND DIFFUSION OF ECO-INNOVATIONS TO ACCELERATE THE CIRCULAR ECONOMY TRANSITION

Sustaining the world’s growing population requires higher levels of consumption of natural resources, resulting in increasing negative impacts on society and the environment. In order to remain within the limits of the planet’s capacity to provide resources while ensuring a strong social foundation for society, it is essential to shift towards a circular economy, a holistic and systemic approach to utilize resources more efficiently and sustainably. Transitioning to a circular economy requires the development and widespread adoption of disruptive eco-innovations by firms and their supply chains, which redesign societal behaviors, introduce new business models, and create technological and institutional changes that can transform existing production systems. However, the most pressing barriers that prevent the shift towards a more circular economy and hinder transformative eco-innovations are social and cultural, and there is a need to better understand these dynamics. This thesis proposes an economic sociology perspective to examine these dynamics by highlighting the importance of embedded social and cultural factors within networks and relationships to explain economic behaviors. The overall aim is to investigate the role of embedded social and cultural dynamics within inter-firm networks and relationships in the adoption and diffusion of disruptive eco-innovations that accelerate the circular economy transition. The dissertation is composed of three chapters: first, a review of the literature to explore the various types of inter-firm networks and relationships and how they affect eco-innovation adoption and diffusion; second, a historical case study of Jaguar Land Rover’s REALCAR closed-loop recycling initiative to understand how embedded relationships within inter-firm networks influenced circular economy eco-innovation adoption; and third, an agent-based model to analyze the mechanisms and targeting strategies that could enable faster adoption and diffusion of eco-innovations through inter-firm networks. The outcomes of this research highlight the critical role that embedded networks and relationships between firms play in the circular economy transition, and how they can be leveraged by decision-makers to overcome the key social and cultural barriers and more quickly shift to a circular economy.