Ecosystem Initiation: A key policy challenge for circular economy transition

Ecosystem Initiation: A key policy challenge for circular economy transition | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Ecosystem Initiation: A key policy challenge for circular economy transition Roelof Vogel, Martin Geissdoerfer This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8100547/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 6 You are reading this latest preprint version Abstract The circular economy (CE) is increasingly viewed as a key pathway to sustainable development, but its uptake remains behind expectations. We explore the concept of circular economy ecosystems to advance our understanding of the market sector conditions necessary for the adoption of circular economy practices by producers, consumers and other stakeholders within an ecosystem. Our methodology is a multiple case study with data collection through semi-structured qualitative interviews of key informants instrumental in the initiation of the ecosystem cases, enriched by secondary data. We identify the special conditions necessary for establishing a circular economy ecosystem and the implications for stakeholders, with a special focus on local government. We deduct a novel framework to analyse and understand the agency involved in a circular economy ecosystem. Our framework depicts seven functions with actors from each function potentially involved in the circular ecosystem. Finally, the article outlines the limitations of our work, and testable propositions and methodological avenues for longitudinal case studies, and agent-based modelling to empirically validate and refine the proposed concepts, advancing the research frontier on circular ecosystems. Circular ecosystems circular economy local government circular economy transitions industrial ecology Figures Figure 1 Figure 2 1. INTRODUCTION The circular economy (CE) has become a promising pathway toward sustainable development (Geissdoerfer, 2017), but while the need for a transition is well established at the global level, adoption is lagging at the local level (Hanemaaijer et al., 2023; IRP, 2024). The CE concept remains in the ‘validity challenge period’ identified by Blomsma and Brennan (2017) and often remains confined to niche markets today (Vogel et al., 2024). Circular economy transitions, by definition, must take a whole-of-economy systems perspective (Thompson et al., 2024), based on individual market sector approaches (Pieroni et al., 2021). These market sector transitions conceptually consist of the cumulative adoption of circular economy solutions in that sector (Temeer and Dewulf, 2019; Schagen et al., 2024). Circular economy innovation and the circular economy value delivery into a market sector relies not only on producers and consumers but involves other stakeholders who potentially have influence on the dynamics of the socio-economic activity in the market sector (Geissdoerfer et al., 2025). Current conceptualizations of circular business model innovation increasingly struggle to adequately consider this extended set of stakeholders for the analysis, design, and communication of many circular solutions (Geissdoerfer et al., 2020; Kanda et al., 2021; Pieroni et al., 2019). To explain these dynamics, the concept of a circular economy ecosystem emerged prominently in CE literature in 2018 and has gained increasing importance in circular economy studies (Pietrulla, 2022). To address the gap identified in translating global CE imperatives to local action, prior work in this area suggests that local government may potentially take up a range of different roles in ecosystems (Aarikka-Stenroos et al., 2021; Chertow & Ehrenfeld, 2012; Gibbs & Deutz, 2007; Uusikartano et al., 2020). Our research interest lies at the intersection of the conceptual gap in the local implementation of CE transition and the initiation of circular ecosystems by local governments. Our research topic, therefore, is to explore how circular economy ecosystems are initiated, orchestrated, and governed, and the role that local government may potentially play in this. We problematize this research topic by identifying our research question as: Why and how might local government initiate and orchestrate a circular economy ecosystem? The importance of the question arises from the increasingly prominent ambition that cities and their local governments hold to facilitate a CE transition within their jurisdiction (Arsova et al., 2022; Chlebna et al., 2024). The objective of our research, therefore, is to identify the options available to local governments for the initiation of circular economy ecosystems as a pathway to CE transition. We selected the case study method for our research project. Empirical data were collected through semi-structured interviews from multiple stakeholder group perspectives (Yin, 2018). We explore the concept of circular economy ecosystems to advance the understanding of the market sector conditions necessary for the adoption of circular economy practices by producers and consumers within an ecosystem (Kanda et al., 2021; Kanda, 2023). We identify the special conditions necessary for initiating a circular economy ecosystem and the implications for different stakeholders, including local government. We propose a novel framework to analyse and understand the agency involved in a circular ecosystem. We identify a research gap in the literature concerning circular ecosystem initiation, orchestration and governance as it relates to local government (see for example Aryee et al., 2025, Table 2 , p. 14). Whilst Uusikartano et al. (2020, p. 23) provide a useful analysis on the roles (operator, organizer, financer, supporter, policymaker, regulator) that local government may have in an ecosystem and the modes of their agency (facilitator or dirigiste), they identify a gap in understanding of public agency and governance of CE ecosystems and recommend, “Future studies could therefore examine […] what kind of power structures and issues emerge among the different actors and stakeholders of CE, which roles different stakeholders can have, and whether the recognized public actor roles be performed as such or in an adapted manner by private sector actors as well.” Our research addresses the gap related to the role of local government and its potential influence on initiating, orchestrating, and governing circular ecosystem development. The article is structured in five sections: First, we review the literature for guidance on ecosystems and establish the known challenges and key success factors related to CE transitions. This is followed by our research method and findings sections. In the discussion, we refine a novel model for circular ecosystems transitions and deduct guidelines for local government initiation of a circular ecosystem before concluding the article, discussing limitations and future research avenues. 2. LITERATURE In this section, we review related work in the key theoretical fields on which this research builds: ecosystems and, especially, circular economy ecosystems. 2.1 Ecosystems The term and concept of an ecosystem, loosely connected to the systems thinking concept, was coined by Tansley, a British plant ecologist at Oxford University in 1935 (Trudgill, 2007). The first reference to the ecosystems concept in an organizational and business sense is attributed to Moore (1993, p. 76), referring to the need for a company to “be viewed not as a member of a single industry but as part of a business ecosystem that crosses a variety of industries.” The concept of ecosystems has gained increasing prominence in business science since the 1990s and has significantly developed from its first business use (Baldwin et al., 2024). To understand the concept of ecosystems in a socio-economic context, we start with Moore’s (1993, p.76) description of the need for cooperation, “companies co-evolve capabilities around a new innovation: they work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.” Ecosystems are based on multi-lateral and non-hierarchical relationships, unlike the case of hierarchical industrial supply chains, for example (Adner, 2017). The actors in an ecosystem are autonomous but interdependent (Baldwin et al., 2024; Gomes et al., 2023), with a mutual emphasis on cooperative relationships to achieve “a focal value proposition [where each actor] captures enough of the value created by the group to keep them involved.” (Baldwin et al., 2024, p. 3). Further, Adner (2017, p. 40) categorizes ecosystems as being either (1) “ecosystem-as-affiliation” with an actor-centric perspective, or (2) “ecosystem-as-structure” with the perspective of “ecosystems as configurations of activity defined by a value proposition.” To further clarify the ecosystem concept, Baldwin et al. (2024) propose three conditional criteria to characterize socio-economic ecosystems, namely, autonomy, complementarity, and modularity: Autonomy: in a free market economy, every actor must remain solvent, or be restructured to do so, and must capture enough value to cover their costs when engaged in an ecosystem. Complementarity provides an incentive for actors to engage in the ecosystem and extract more value from participation than would be possible if they were operating separately. Modularity supports “the notion that ecosystems can arise through an evolutionary process of disaggregation from [fully] integrated to more modular architectures, or a process of aggregation in which new or existing components are linked in new ways for joint-value creation” (Baldwin et al., 2024, p. 2). 2.2 Circular Ecosystems As key underlying schools of thought, the fields of industrial ecology (Ashton, 2008) and industrial symbiosis (Chertow, 2007) have bequeathed the ecosystem perspective and its analytical consequences to the field of circular economy, where it increasingly gains traction (Geissdoerfer et al., 2025). The circular economy ecosystem perspective was first introduced in 2016 and has gained increasing importance in circular economy studies (Pietrulla, 2022). The focus of circular economy ecosystem literature is on value creation and capture through incorporating circular economy principles in product, process, technology, or service design and its delivery to users (Kanda, 2023; Kanda et al., 2021). The need to better understand the interrelationship and collaboration between different actors, CE innovation, and circular business models (CBMs) was initially approached through an industrial symbiosis and industrial ecology lens (Zucchella & Previtali, 2019), before leading to the circular ecosystem perspective that a firm-, business unit-, or product-centric focus is often inadequate to address the number of stakeholders, the complexity and the required coordination that characterizes many CBMs (Geissdoerfer et al., 2020; 2025; Kanda et al., 2021). The same authors forward the view that an ecosystem perspective allows companies to move beyond pure economic value creation to include social and environmental value and use it as a competitive advantage. Konietzko et al. (2020, p.1) provide a contrasting view that circularity “needs to be understood as a property of a system (e.g., the mobility system of a city), rather than a property of an individual product of service (e.g., a car or a car-sharing service).” One lens on circular ecosystems emphasizes cooperative relationships and the affiliation of actors who agree to collaborate with one another as the key organizing principle (Barquette et al., 2023). This is closely aligned with the concept of ‘ecosystem-as-affiliation’ where all relevant stakeholders along a material flow chain must be considered to enact circularity (Pietrulla, 2022). An alternative lens highlights the ecosystem-as-structure focus on the activities required of actors and the interdependent coordination of ecosystem activities, such as end-of-life resource management. Taking a biomimetic view, Tate et al. (2019) posit that a shift in perspective from closed, mechanistic business ecosystems to a circular value-driven ecosystem highlights the need for material and information flows to become more integrated to do so. Kanda (2023, p. 8) calls for “a complementary approach that combines insights from systems and ecosystem perspectives including the agency and governance of actors in these different conceptualizations”. According to Geissdoerfer et al. (2025) there are three different types of circular economy ecosystems: multi-actor ecosystems , including business, industrial and innovation ecosystems, bring together producers, suppliers, service providers, end users, regulators and civil society to achieve a shared circular outcome, often through geographically bounded industrial systems and joint value creation across multiple actors; platform and knowledge ecosystems, comprising digital/platform and knowledge ecosystems, which coordinate heterogeneous actors around technological or market-oriented platforms and around knowledge translation, enabling data sharing, economic interaction and the uptake of CE research into practice; and sector-specific ecosystems , such as urban, entrepreneurial/start-up, service, multi-project and food ecosystems, which focus on particular material, spatial or industry contexts, for example urban flows and infrastructures, the scaling of sustainable start-ups, service co-creation, or circular construction chains that connect multiple projects. While not using ‘ecosystem’ terminology, Cramer (2020) establishes a framework for the regional governance of circular economy implementation that highlights four functions into which stakeholders and their actors can be grouped: technology development and optimization; socio-cultural changes; market creation; and creation of preconditions. Local government is identified in the creation of preconditions function. To this, a fifth function is added: system orchestration, with a system intermediary, known as a ‘transition broker’, as the key actor. In presenting this work, Cramer (2020) further identifies a research need to add a function/s to account for civil society as a key actor in the ecosystem. Bourdin and Torre (2024, p. 9), taking an economic geography lens, introduce a framework for a territorial circular economy as a “dynamic, interconnected set of economic players, institutions, policies, and practices within a specific territory [...] to optimize resource flows, reduce waste, and promote regeneration through circular economy principles.” The visual framework depicts a ‘central arena’ in which the circular ecosystem activity takes place, with each of the nominated influences interacting within this arena (Bourdin & Torre, 2024, p.11). Drawing on the work of Cramer (2020) and Bourdin and Torre (2024), we synthesize a circular ecosystem framework with a comprehensive set of functions as the organizing principle. This approach aligns with Cramer (2020) and the work of other scholars who foreground functions and functional groups in the analysis of systems (Bertassini et al., 2021; Elzinga et al., 2023), and system intermediaries “through the functions they perform, sometimes constituting a specific actor category with a separate identity, as either an individual or an organisation” (Kivimaa et al., 2019, p. 1063). To identify the encompassing functions in a circular ecosystem representative of all stakeholder groups and other influences in the “dynamic, interconnected set” (Bourdin and Torre, 2024, p. 9), we draw on related work (Bertassini et al., 2021; Bourdin & Torre, 2024; Cramer, 2020; Elzinga et al., 2023; Kanda et al., 2021; Kivimaa et al., 2019; Moggi & Dameri, 2020; Tabas et al., 2025) to construct a synthesis matrix (Table 1). In column 1 of Table 1, we identify the comprehensive set of functions that represent all circular ecosystem influences and are incorporated into a synthesized circular ecosystem framework (Figure 1). Columns 2 to 4 of Table 1 include the interpretations of scholars who identify functions as the organizing principle of ecosystems (Bertassini et al., 2012; Cramer, 2020; Elzinga et al., 2023), whilst columns 5 to 9 include the interpretations of scholars who identify stakeholders (and their representative actors) as the organizing principle of ecosystems (Bourdin & Torre, 2024; Kanda et al., 2021; Kivimaa et al., 2019; Moggi & Dameri, 2020; Tabas et al., 2025). The synthesis of the comprehensive set of circular ecosystem functions in column 1 (Table 1) is guided by: (1) explicit identification of circular economy knowledge building and diffusion, and the circular economy innovation process; (2) separate functions for market sector supply and market sector demand; (3) recognition of the full spectrum of public sector involvement; and importantly, (4) recognition of the institutional influence of dominant values, norms, and culture in society. The last of these guidelines addresses the expressed need to do so (Cramer, 2020), as well as the inclusions made by other scholars (Table 1: Bertassini et al., 2021; Elzinga et al., 2023; Kanda et al., 2021; Tabas et al., 2025). The circular ecosystem framework depicts a central ‘arena’ in which the dynamics of the ecosystem plays out (Figure 1). The core function in the ecosystem arena is that of initiation and orchestration . The other six ecosystem functions engage and interact in the arena as determined by the dynamics of the specific circular economy value proposition, value creation, and value delivery process on foot. To this depiction, we add the typology of four perspectives that together embrace the full range of socio-economic activity: the business and technology , Table 1: Synthesis of Functions in a Circular Ecosystem Synthesized Functions in a CE Ecosystem Framework Functions identified in Related Work (by Author/s) (classified according to taxonomy in column 1) Stakeholders (and actors representing them) and Institutional Elements identified in related work (by author/s) (classified according to primary functional activity of stakeholders and the function taxonomy in column 1) Bertassini et al. (2021) Cramer (2020) Elzinga et al. (2023) Bourdin & Torre (2024) Kanda et al. (2021) Kivimaa et al. (2019) Moggi & Dameri (2020) Tabas et al. (2025) 1 2 3 4 5 6 7 8 9 Initiation & Orchestration _ System Orchestration Provision of Problem & Solution Directionality; Coordination of Transition Resource Mobilization & Support "a locus of coordination driven by key actors" (p. 2817) "Intermediary actors are often identified through the functions they perform" (p. 1063) Participative governance and "shared common values" as a pre-condition to ecosystem formation (p. 2838) _ CE Knowledge Building & Diffusion Circular Innovation Opportunities Research & Technology Development Knowledge Development; Knowledge Diffusion Innovation Culture & Knowledge Sharing _ _ "Sharing of knowledge" as a pre-condition to ecosystem formation (p. 2838) _ CE Innovation: Value Proposition, Creation & Delivery Value Proposition Research & Technology Development Resource Mobilization; Entrepreneurial Experimentation Resource Mobilization & Support "A joint approach to value creation for customers underpinned by value networks" (p. 2817) _ "One of the most important issues for CE is the achievement of financial self-sufficiency over time" (p. 2838) "Customers should be co-creators of CE value" (p. 411) Market Sector Structure & Supply Stakeholders Interactions Market Creation (supply side) _ Local Collaborations; Human Capital & Labour Market; Effective Resource & Waste Management Networks; Geographical & Organized Proximity "Members in an ecosystem deliver value through an interrelated system of interdependencies" (p. 2817) _ "Monitoring the use of shared infrastructure" and "all stakeholders are linked by a shared sense of trust and belong to the ecosystem with common values " (p. 2838) _ Market Sector Demand for Goods & Services Stakeholders Interactions Socio-cultural changes Market Creation (demand side) Local Collaborations _ _ _ "Customer engagement […] emphasizes [need for] customer awareness" (p. 410) Dominant Values, Norms & Culture Circular Values Opportunities Identified as a need by Cramer (2020b) but not included in their model Creating Legitimacy _ "a company can move beyond economic value creation to include social and environmental value and use it as a competitive advantage" (p. 2826) _ _ "Raising customer awareness may require companies to educate them" (p. 410) Public Sector Services, Policy & Regulation _ Socio-cultural Changes; Creation of Preconditions Market Destabilization (removing regulation and financial advantages for existing regime) Government & Regulatory Bodies _ _ "a pivotal role in the development of the ecosystem was played by the municipality" (p. 2838) _ the social and behavioral , the government and policy , and the circular economy innovation collaboration perspectives. Figure 1 visually depicts the relationship of stakeholders to their representative actors, who take up roles in one or multiple circular ecosystem functions. The circular economy innovation collaboration perspective identifies the collaboration of the business and technology , and the social and behavioral perspectives, reflecting the predominantly socio-technical processes of circular economy innovation (Konietzko et al., 2020), and the predominantly socio-economic nature of consumption behavior (Tabas et al., 2025). In summary, we find that whereas related work may provide some conceptual and implementation guidance to local government wishing to initiate and orchestrate a circular ecosystem, current models fail to adequately explain local government initiation, orchestration, and governance of circular ecosystems. This identifies a gap in understanding that we seek to address in our research project. 3. METHODS The methodological approach of this research is the case study method, with qualitative data collection through semi-structured interviews enriched by secondary data from published organisation data and reports (Yin, 2018). This approach has been taken to explore the phenomenon how might local government initiate and orchestrate a circular economy ecosystem? We find the case study method the most appropriate for investigating “a contemporary phenomenon (the “case”) in depth and within its real-world context, especially when the boundaries between phenomenon and context may not be clearly evident” (Yin, 2018, p. 15). The key selection criteria for the case studies were: stage of circular ecosystem maturity; clarity of the focal circular economy value proposition; examples of local government-initiated circular ecosystems, as well as not; examples from two countries to generalize the results beyond one country; access to the initiating ecosystem actor; and access to other actors in the ecosystem important to its evolution. To meet these criteria, we identified and researched six case studies, including four exemplars of local government initiation of a circular ecosystem, and two where local government had no role in initiation. The case studies span Australia and the Netherlands with exemplars of both categories of case study selected in each country (i.e., local government as initiator, or not). We selected cases spanning a range of market sectors, including hospitality, light industrial, textile and clothing, construction, and waste management, to make our results as generalizable as possible within the confines of a parsimonious number of case studies. In each case we selected successful circular ecosystems that led to a desired circular economy outcome. We sought case study samples across this range of market sectors and across two countries to limit the level of bias that a narrower selection criterion may have introduced. We recognised, nonetheless, that our selection of case studies may have a bias towards developed economies and limited to those market sectors we sampled. Further details of our case study organisations are provided in Table 2 and include the motivational trigger for the initiation of each of the circular economy ecosystems. Interviewee details and secondary data sources are provided in Table 3 . Table 2 Summary of interview organisations, interviewee roles, and ecosystem details Case # Circular Ecosystem Descriptor Market Sector & Industries AU/ NL Focal Value Proposition in the Circular Ecosystem Ecosystem Actors Initiating Broker / Intermediary Motivational trigger to circular ecosystem initiation 1 Circular Hotels initiative Hospitality: Hotel Industry & Supply Chain NL CE opportunities across the hotel industry partners & supply chain Local government, Hotels. Food & Catering, Linen & Laundry, Packaging Local government officer Extending the CE ambitions of Amsterdam into one of the city’s largest business sectors (80,000 hotel bed capacity) 2 Recreational Parkland Bridge Recreational Parkland: Light industrial manufacturing AU CE innovation stimulated by directed local government procurement projects Local government, manufacturers, Knowledge providers. Local government officer Vision & mission inspired by a program initiated by HM Prison Service in the UK to redesign mattresses 3 Industrial Materials Exchange Commercial & Industrial: Excess industrial materials AU Digital platform for industrial materials exchange Local government, Research & development provider, Manufacturing industry. Local government officer Vision & mission inspired at the intersection of diversion of excess materials and digital marketplace solutions 4 Circular Denim Clothing Retail: Clothing & textiles NL Denim fashion clothing with a recycled fiber content Local government, Customers, Retailers, Textile Manufacturers, Weavers, Yarn producers, textile waste industry Local & National government and Industry as co-founders SME in the denim industry with CE vision & ambition partnered with a national government looking for EU inspired "green deal" opportunities 5 Recycled fiber 'White Linen' Hospitality: Commercial white linen NL Commercial white linen with high percentage of recycled fiber Textile Manufacturers, Weavers, Yarn producers, Textile waste industry Two industry professionals as co-founders Environmental and sustainability vision and mission of two industry professionals (stimulated by involvement as actors in case 1 above). 6 Asphalt Polymer additive Road Construction: Plastic Polymers AU CE opportunities for the use of recycled soft plastics and other polymer sources Local government, Plastic/Polymer waste industry, Asphalt & road industry. Business entrepreneur Vision & mission of the business owner to maximize recycled plastics & polymer in road asphalt Table 3 Interviewee Organizational Roles and Secondary Data sources Case # CE Ecosystem Descriptor Interviewee Organizational roles No. of Interviews Secondary data sources 1 Circular Hotels initiative (1) Local govt. Officer (2) CE Manager at Hotel, (3) Packaging Supplier, (4) Linen Supplier 4 (1) Website (2) City of Amsterdam reports 2 Recreational Parkland Bridge (1) Local government officer & CE thought leader 2 (1) Media posts (2) Workshop / Conference presentations 3 Industrial Materials Exchange (1) Local government officer & CE thought leader (2) CEO (3) Technology Developer 4 (1) Organisation Website (2) Media posts 4 Circular Denim Clothing (1) Ecosystem manager appointed by local government (2) Advisory Board Member to the ecosystem 2 (1) Organisation Website (2) Media posts 5 Recycled fibre 'White Linen' (1) Business Entrepreneur (2) Business CEO 3 (1) Website (2) As a participant at partner launch event (3) As a participant at partner meeting (RFID topic) 6 Asphalt Polymer additive (1) Founder & R&D lead (2) Local government CE Officer 4 (1) Company media posts (Linkedin) To achieve saturation on key themes, more than one interview was conducted with several interviewees where this was needed to seek further clarification following initial analysis of the research data, with a total of 19 interviews conducted. We transcribed the interviews and then checked the transcription by listening back to the original recordings. The transcripts were used alongside the secondary documents to inform the analysis, supported by NVivo 14 software as the repository for the coded interviews. The research was undertaken in accordance with the ethical conduct in human research and approved by Monash University’s human research ethics committee. The project was fully explained, and all interviewees provided explicit consent prior to participating in the research on the understanding that the data would be anonymized and that research data are not made public. Purposeful interviewee selection was based on the requirement for a high degree of knowledge and direct circular ecosystem involvement. In each of the six cases, the initiator and orchestrator of the ecosystem was interviewed, thus providing deep insights into these dynamic aspects of the circular ecosystem phenomenon. In addition, the other interviewees provided views from the full range of ecosystem functional groups, including knowledge providers, research and development providers, goods and service providers, consumers, and policy and regulation providers. The open-ended interview questions explored several lines of inquiry: the background of stakeholder organizations; circular economy innovation; actor roles and the dynamics of circular economy ecosystem involvement; as well as the role and influence of local government. We undertook a deductive analysis of our findings. First, we sought evidence of the agency of local government in initiating and orchestrating a circular ecosystem and coded for direct involvement of local government officers in the initiation and orchestration of each case. Second, we assessed evidence for the seven functions we identified in the circular ecosystem framework (Fig. 1) and coded for each of the functions. Secondary data was integrated with interviewee data to achieve a higher clarity of the related themes. 4. FINDINGS In this section, we present the details of our findings in relation to two phenomena: deductive evidence of the agency of local government to initiate and orchestrate a circular ecosystem, and deductive evidence for the seven functions identified in our circular ecosystem. First, we find that local government has the agency to initiate circular ecosystems. In each of the three cases where local government had initiated a circular ecosystem (Table 1 , cases 1–3), what followed was the successful establishment of a group of stakeholders who met the three conditions of actor involvement in an ecosystem: autonomy, complementarity, and modularity (Baldwin, 2024). In each case, the local government, as orchestrator, had convened a group of stakeholders who were prepared to cooperate, collaborate, and co-create a circular economy value proposition that they would (or could in the future) mutually benefit from and that a critical density of heterogeneous stakeholders was achieved (Tate et al., 2019). The local government officer who initiated the Industrial Materials Exchange circular ecosystem reflected, “ And so I put my hand up as the lead [to orchestrate the initiating stakeholders] .” What differentiated the two categories of case studies, was the ambition by the local government to initiate and establish a circular ecosystem in the first (Table 2 , cases 1–3), as opposed to the other (Table 2 , cases 4–6). We further find from the second category that local governments may not necessarily have any involvement in a successful circular ecosystem as an actor, as exemplified by Case Study 5 (Table 2 ). Second, we find deductive evidence for each of the seven functions identified in the synthesized circular ecosystem framework (Fig. 1). In Table 3 we provide a comprehensive summary of the evidence for the seven circular ecosystem functions and explicitly link the data to each function. A key finding that emerges from our data relates to the dynamics within a circular ecosystem. A key finding that emerges from our data relates to the dynamics of hegemony of dominant values, norms and culture within a circular ecosystem. For example, in the asphalt additive case, the observed, “It's the same with infrastructure projects. If we wait for the stodgy old engineers that run most of these big engineering companies and government departments to come around to a transition to circularity…. we haven't got time for that” , and adds a further comment on local government procurement, “ if you leave it to procurement professionals, you'll have the odd enlightened soul working in those departments, but generally speaking, you know, they're closed-minded and obstinate people. ” In a second example, the CEO of the Excess Materials Exchange SME, commented on seeking to change the dominant views and culture within potential customer organisations, “ A lot of them are long-time local government people [and] in their role, say twenty years. They just don't rock the boat.” In the Circular Hotels Initiative case, the initiating local government officer provided an insight to the orchestration process, “ You keep each other in line. So, you have to learn to create openings with each other and see each other as a kind of partner, and to help each other.” In the Recreational Parkland Bridge case, the initiating local government officer and colleagues identified a 100-year-plus lifespan bridge as the CE value proposition to replace high-maintenance, shorter-lifespan prior practice. In the same case example, a local university’s engineering department became a founding circular ecosystem partner and fulfilled an important role in the CE knowledge-building and diffusion function. Table 4 Evidence of Actor involvement in CE Ecosystem Functions. Six Cases Circular Ecosystem Functions Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Circular Hotels initiative Recreational Parkland Bridge Industrial Materials Exchange Circular Denim Clothing Recycled fiber 'White Linen' Asphalt Polymer additive Circular Ecosystem Initiation & Orchestration Local government officer initiates the "Koplopersgroep Circulaire Hotels" in 2021. Local government procurement driven initiative in delivery of public services. Local government identification of the CE business need, CE value proposition, and project initiation. Local government in partnership with a national government agency & a clothing manufacture SME. Initiation & orchestration by two industry entrepreneurs (inspired by Circular Hotels initiative). Initiation & orchestration by business entrepreneur. CE Innovation and value stream Pursuit of CE value propositions, creation & delivery (for example: food waste reduction; 'circular' linen) Pursuit of CE value propositions, creation & delivery for a specific local government need (parkland bridges). Pursuit of CE value creation & delivery of a digital platform for online buyer/seller transactions Pursuit of CE value creation & delivery of a denim fashion clothing with a recycled fiber content. Pursuit of CE value creation & delivery of commercial white linen with a high recycled fiber content. Pursuit of CE value creation & delivery of recycled polymer additive to improve road asphalt performance. CE Knowledge building & diffusion Use of the "Circular Scan" program to identify opportunities. Engagement of university research partners. National research agency and a technical university as knowledge building partners. Involvement of full supply chain to experiment & knowledge build high recycled fiber content denim fabric. Involvement of full supply chain to experiment & knowledge build high recycled fiber content fabrics. Experimentation and performance testing by founder and road construction partner in the CE ecosystem. Market Sector Structure & Supply * Initial 10 companies from the sector engaged with local government * Evolved into 'Green Hotels Club' (Mar. 2023) Seven companies became engaged in competitive process for CE solution building and tender. Market sector involvement in the CE delivery testing phase of the CE innovation. Full international supply chain involvement (Waste; shredding; yarn spinning; weaving; dying; clothing manufacture). Full international supply chain involvement (Waste; shredding; blending; yarn spinning; weaving; dying). Engagement with road construction companies that contract to local governments to build and/or resurface roads. Public Sector Services, Policy & Regulation * SMEs cited as priority. * "Circular Scan" tool. * Local government officer becomes the program manager (3 yrs). Local government led weekly review meetings with tenderers and their supply chain partners. Local government CE value proposition; funding acquisition; and orchestration of CE delivery testing partners. Local government managed CE ecosystem project with appointment of program manager (1st 3 yrs). Management of 'waste' exports across international borders (Note: NOT at local government level). Local governments as technical specifiers and procurers of road re-surfacing contractors. Dominant Values, Norms & Culture Project to reduce hotel buffet food waste through influencing customer behaviorally dominant values, norms & culture. Challenge to conventional design solution to design a maintenance free, 100 years plus parkland bridge. Challenge to dominant values & norms in the classification of 'excess' industrial material flows as waste. Participant: "We must focus on [.] how we can get rid of the textile waste mountain and change behaviour again." Founder: " After the start-up phase, we are now seen as a solution within the industry, [..] including the industry associations." * Entrepreneur: "A lot of them are long-time local government people [and] in their role, say 20 yrs. They just don't rock the boat.” Market Sector Demand Multiple supply chain actors were engaged in the ecosystem to explore B2B CE opportunities for 'downstream' customers. Demand for the CE solution was directly created by the local government procurement for innovation project. Demand for the digital marketplace platform developed in the CE value delivery development phase. Seven participating denim brand owners at start, each committing to target 20% PCR content in denim jeans in 3 years. Five founding linen supply companies (NL) in 2022; demand has grown to ~ 25 companies in 2025. A local government has entered a 'circular contract' to buy asphalt additive equal to waste soft plastic supplied. 5. DISCUSSION Based on our findings, we present our typology of circular ecosystems. A circular ecosystem can be conceptualized as a set of functions that are the organizing principle of the circular ecosystem. Our approach follows Elzinga et al. (2023), who introduce the concept of functional analysis to mission-specific innovation systems (MIS), and to Cramer (2020), who identifies functions in a model to explain regional governance in circular implementation. In our typology, stakeholders are represented by actors in the ecosystem functions, and these actors may be individuals or groups of individuals who engage in the activities of the circular ecosystem. Stakeholders , through their actors , may be active and have influence in more than one function. Our findings that local governments may have agency to take up the catalytic function of initiation and orchestration , echoes that of prior work (Uusikartano et al., 2020). However, the nuance in the findings extends this work to identify that this is the exception and is context dependent. For a local government to have agency, it requires at least one local government officer with the capability and capacity to enact agency, combined with an ambition to materialize a suitable circular economy innovation concept. This was illustrated in the Excess Materials Exchange case example with a local government officer with agency (capability, capacity, and leadership support) and ambition to divert excess industrial materials from landfill. Further, our findings confirmed the process of orchestrating a group of stakeholders who were prepared to cooperate, collaborate, and co-create a circular economy value proposition and the agency of local government to do so, and orchestrate the heterogeneous critical density to enable a circular ecosystem to become functional (Linde et al., 2021; Tabas et al., 2025). The nuance in our findings is that the stakeholders are not necessarily all orchestrated to join the circular ecosystem at a point in time before the functional process of circular economy innovation commences. In the Circular Hotels Initiative case example, the initiating core group of stakeholders invited others to join them as the circular economy innovation process progressed. Whilst the initiating group was primarily hotels, subsequent stakeholders who were invited to join, for example, came from the laundry service, packaging, and the hotel industry’s food supply chain. We found that circular ecosystems can be conceptualized as a set of seven interacting functions as the organizing principle of a circular ecosystem. The conceptual design of these functions aims to represent the full range of functional activity that occurs in circular ecosystems. Our approach of functions as the organizing principle of an explanatory framework is like that of Elzinga et al. (2023) who introduced the concept of functional analysis to mission-specific innovation systems (MIS), and of Cramer (2020), who identifies functions in a model to explain regional governance of circular economy implementation. In contrast to a functional organizing principle, many circular ecosystem scholars have focused on a range of stakeholder perspectives, including stakeholder relationships (Tabas et al., 2025; Tapaninaho & Heikkinen, 2021); stakeholder value capture (Bertassini et al., 2021); stakeholder supply-chain collaboration (Kuhlmann et al., 2023); and stakeholder ecosystem co-design (Moggi & Demeri, 2020). A further group of circular ecosystem scholars has focused on a range of actor perspectives, including: actor cooperation (Barquette et al., 2023); multi-actor, multi-level contexts (Boldrini & Antheaume (2021); actors in entrepreneurial circular ecosystems (Kanda et al., 2025); actor roles that local government may take up (Uusikartano et al., 2020); and the role of actors as the organizing principle for ecosystems (Aryee et al., 2025). Importantly, our conceptual design of the circular ecosystem framework, with functions as the organizing principle, is compatible with prior work. This recognizes that stakeholders , through their actors , take on roles in functional groups that create the dynamic interaction within the ecosystem. The empirical confirmation of the seven functions within the circular ecosystem framework (Fig. 1) includes that of (1) initiation and orchestration , reflecting the institutional need to catalyze ecosystems and that “ successful circular economy initiatives require orchestration of ecosystem partners ” (Parida et al., 2019, p. 716). Reflective of ecosystems with a primary focus on materializing circular economy innovation and solutions, the separate functions of (2) circular economy innovation: value proposition, creation and delivery , and (3) circular economy knowledge building and diffusion are prominent. The inclusion of these functions confirms prior scholarly work on the importance of entrepreneurship and value stream creation in circular ecosystems (Bertassini et al., 2021; Kanda et al., 2025; Konietzko et al., 2020), as well as knowledge building and diffusion (Asgari & Asgari, 2021; Moggi & Dameri, 2020). Further, the functions (4) market sector structure and supply and (5) market sector demand reflect the supply and demand functions for goods and services in the ecosystem (Tabas et al., 2025), whilst (6) public sector services, policy and regulation is the function that provides policy and regulation to the economic system within which the circular ecosystem is established, as well as support services to socio-economic activity in the ecosystem (Uusikartano et al., 2020). The (7) dominant values, norms and culture function addresses the need identified by Cramer (2020) for inclusion of a societal influence function. Its inclusion, as conceptualized in our work, reflects the important influence of socio-economic behaviour in the ecosystem (Elzinga et al., 2023; Tabas et al., 2025). Recognizing that this may not be an essential consideration in the analysis of all circular ecosystems, the frameworks and definitions that rely more specifically on stakeholders and their nominated actors remain valid for analysis where the choice between the two optional streams of analysis deems it so (e.g., Peçanha & Ferreira, 2025). In summary, what is novel in the conceptualization of our circular ecosystem framework is the inclusion of the function of dominant values, norms, and culture . The hegemony of dominant values, norms, and culture in society arises from the socio-economic actors who benefit the most from maintaining it (Vogel et al., 2025). We see circular economy innovation and diffusion as a disruptive socio-economic activity, given that the principles of circular economy often conflict with incumbent socio-economic activity in a consumption-driven, loosely regulated 1 , free-market linear economy (Blomsma et al., 2021). For this reason, we posit that there is a strong need to identify the functional role that dominant values, norms, and culture have in a circular ecosystem. The circular ecosystem enables actors within it to account for the activities and influence they may need to enact from this functional perspective to create the conditions necessary for the contemplated circular value proposition, creation, and delivery to succeed. Introducing this functional activity addresses a gap identified by Cramer (2020, p. 18) in the role of civil society and the potential “inclusion of an additional function, in which civil society is the key actor.” A second, more nuanced, point of differentiation from prior work is the recognition that actors in a circular ecosystem may take up different roles in a range of functions, illustrated by the example of clothing retailers represented in the textile market sector structure and supply function, whilst highly active in other functions, such as in the dominant values, norms, and culture to advocate for local, sustainable production, and being active in the function circular economy innovation: value proposition, creation & delivery . Our findings exemplified that the local government officer in the Industrial Materials Exchange case example took up roles in (1) initiation and orchestration; (2) circular economy innovation and value stream; (3) circular economy knowledge building and diffusion; and (4) market demand. Arising from our novel CE ecosystem framework and building on the definitions provided by Adner (2017) and Aryee et al. (2025) we propose the following definition: A circular economy ecosystem is bounded by the alignment structure of the multilateral set of stakeholders and their actors, organized into the functional groups that need to interact for a focal circular economy value proposition and its stakeholder complimentary benefits to materialize. We propose this definition in alignment with our CE ecosystem framework, referencing the importance of functions within an CE ecosystem (in contrast to the foregrounding of actors by Aryee et al. (2025) for example), whilst also clarifying the roles of stakeholders and their appointed actors , who through their agency, have influence in the dynamics and outcomes of the CE ecosystem. Finally, as guidance for local governments, we present Fig. 2, which tabulates examples of stakeholders and their representative actors, including local government officers, who may have the (context-specific) opportunity to engage in a circular ecosystem. 6. CONCLUSION The objective of our research was to identify the options available to local governments for the initiation of circular economy ecosystems as a pathway to CE transition. To do so, we undertook case study research on six circular ecosystem case examples, three of which had been initiated by local governments, and three that had not. In our literature review, we synthesized a novel circular ecosystem framework, foregrounding functions as the organizing principle (Fig. 1), and confirmed its validity with our empirical findings. We provide a typology and a novel definition of circular ecosystems based on our framework. To meet our research objective, we provide local government a guidance framework (Fig. 2) on the (context-specific) roles it may play in circular ecosystems, including as initiator and orchestrator. In achieving our aim, we make two contributions. First, we identify that local government has the agency to initiate and orchestrate circular ecosystems, and the possibility to take up other context-specific functional roles. Second, we present a novel circular ecosystem framework to explain the key functions that stakeholders and their nominated actors fulfill in their interactions to materialize a focal CE value proposition for their mutual benefit. Our framework visualizes seven critical functions and categorizes the business & technology , social & behaviour , and policy & regulation perspectives. Notably, the framework supports the functional role analysis of actors in a circular ecosystem, including that of local government actors. For practitioners, the framework clarifies how firms, investors, and civil-society actors can purposefully assume—or shift between—ecosystem roles to maximize collective value creation, de-risk investment, and capture first-mover advantages in emerging circular economy sectors. Importantly, our frame introduces a second stream for the conceptual and definitional analysis of circular ecosystems, which is more nuanced than current frameworks and definitions, with functions as the foregrounded organizing principle, as opposed to stakeholders and actors. Whilst our framework recognizes stakeholders and actors, it does so in their agency to be active in functional groups that interact to create the so-bounded circular ecosystem. Our research is not without limitations. The phenomenon of CE ecosystems is a relatively new topic in the CE field. Based on a parsimonious number of case studies, all deemed of appropriate quality for the research, we provide several novel perspectives that will benefit from further validation: a circular ecosystem analysis framework with functions as the organizing principle, and a guidance model for local government with the ambition to initiate and orchestrate a circular ecosystem. We acknowledge that our research has biases that limit the transferability of our findings: we investigated only mature circular ecosystems with successful outcomes, and while we purposefully sought diversity across market sectors in two developed economies, this remains a limitation to transferability. Arising from these limitations and new research gaps, we make the following recommendations for further studies: (1) an investigation of circular ecosystems that have failed and the reasons for these failures; (2) an investigation into market sectors that are best suited for local government to establish circular ecosystems; and (3) an investigation of the use of the circular ecosystem analytical framework and the benefit (or not) of foregrounding societally dominant values, norms, and culture , and the role this function has in determining circular ecosystem dynamics. Declarations Conflict of Interest Statement: The authors declare no conflict of interest. FUNDING INFORMATION The primary author received partial funding from Monash Business School, Monash University, Australia, for a research trip to the Netherlands in 2023. SUPPORTING INFORMATION No supporting information is available for sharing in the public domain. References Aarikka-Stenroos, L., Ritala, P. & Thomas, L. D. W. 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Business Strategy and the Environment, 28 , 274-285. https://doi.org/10.1002/bse.2216 Footnotes We make this judgement based on the regulation that is required to meet global circular economy needs (IRP, 2024). Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Review Version 1 posted Reviews received at journal 14 Nov, 2025 Reviewers agreed at journal 14 Nov, 2025 Reviewers invited by journal 14 Nov, 2025 Editor assigned by journal 13 Nov, 2025 Submission checks completed at journal 13 Nov, 2025 First submitted to journal 12 Nov, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. 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07:07:32","extension":"xml","order_by":7,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":121620,"visible":true,"origin":"","legend":"","description":"","filename":"e7c324c7f6c945cdba25ef1af442be381structuring.xml","url":"https://assets-eu.researchsquare.com/files/rs-8100547/v1/ad8a10ef82d9269b64b66cdf.xml"},{"id":96916153,"identity":"0a0dd5d4-f869-45e7-9878-63f6193489c4","added_by":"auto","created_at":"2025-11-27 14:08:07","extension":"html","order_by":8,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":133878,"visible":true,"origin":"","legend":"","description":"","filename":"earlyproof.html","url":"https://assets-eu.researchsquare.com/files/rs-8100547/v1/5629e904c48a3502b84aba63.html"},{"id":96793067,"identity":"318bb12e-04e5-4aa5-96ef-7a765c86a7de","added_by":"auto","created_at":"2025-11-26 07:07:31","extension":"png","order_by":1,"title":"Figure 1","display":"","copyAsset":false,"role":"figure","size":863775,"visible":true,"origin":"","legend":"\u003cp\u003eThe Circular Ecosystem Framework (with functions as the organizing principle)\u003c/p\u003e\n\u003cp\u003e(developed from Bourdin \u0026amp; Torre, 2024; Cramer, 2020; Elzinga et al., 2023).\u003c/p\u003e","description":"","filename":"EcosystemInitiation25JIE9051Figure1.png","url":"https://assets-eu.researchsquare.com/files/rs-8100547/v1/ff437bef1b15497769a705c1.png"},{"id":96793068,"identity":"0deb729c-1ec0-4809-943c-cc6e88a4a500","added_by":"auto","created_at":"2025-11-26 07:07:31","extension":"png","order_by":2,"title":"Figure 2","display":"","copyAsset":false,"role":"figure","size":580263,"visible":true,"origin":"","legend":"\u003cp\u003eOpportunities for Local Government engagement in Circular Ecosystems.\u003c/p\u003e\n\u003cp\u003e(framework developed from Bourdin \u0026amp; Torre, 2024; Cramer, 2020; Elzinga et al., 2023).\u003c/p\u003e","description":"","filename":"EcosystemInitiation25JIE9051Figure2.png","url":"https://assets-eu.researchsquare.com/files/rs-8100547/v1/19891a27d1b4a9be1aa2f35b.png"},{"id":96922814,"identity":"13095837-fb82-471a-8534-159162def874","added_by":"auto","created_at":"2025-11-27 14:19:59","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":2767076,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8100547/v1/d4413276-d60a-41f4-b8ed-2948ed29ad85.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Ecosystem Initiation: A key policy challenge for circular economy transition","fulltext":[{"header":"1. INTRODUCTION","content":"\u003cp\u003eThe circular economy (CE) has become a promising pathway toward sustainable development (Geissdoerfer, 2017), but while the need for a transition is well established at the global level, adoption is lagging at the local level (Hanemaaijer et al., 2023; IRP, 2024). The CE concept remains in the \u0026lsquo;validity challenge period\u0026rsquo; identified by Blomsma and Brennan (2017) and often remains confined to niche markets today (Vogel et al., 2024). Circular economy transitions, by definition, must take a whole-of-economy systems perspective (Thompson et al., 2024), based on individual market sector approaches (Pieroni et al., 2021). These market sector transitions conceptually consist of the cumulative adoption of circular economy solutions in that sector (Temeer and Dewulf, 2019; Schagen et al., 2024).\u003c/p\u003e\u003cp\u003eCircular economy innovation and the circular economy value delivery into a market sector relies not only on producers and consumers but involves other stakeholders who potentially have influence on the dynamics of the socio-economic activity in the market sector (Geissdoerfer et al., 2025). Current conceptualizations of circular business model innovation increasingly struggle to adequately consider this extended set of stakeholders for the analysis, design, and communication of many circular solutions (Geissdoerfer et al., 2020; Kanda et al., 2021; Pieroni et al., 2019). To explain these dynamics, the concept of a circular economy ecosystem emerged prominently in CE literature in 2018 and has gained increasing importance in circular economy studies (Pietrulla, 2022).\u003c/p\u003e\u003cp\u003eTo address the gap identified in translating global CE imperatives to local action, prior work in this area suggests that local government may potentially take up a range of different roles in ecosystems (Aarikka-Stenroos et al., 2021; Chertow \u0026amp; Ehrenfeld, 2012; Gibbs \u0026amp; Deutz, 2007; Uusikartano et al., 2020). Our research interest lies at the intersection of the conceptual gap in the local implementation of CE transition and the initiation of circular ecosystems by local governments. Our research topic, therefore, is to explore how circular economy ecosystems are initiated, orchestrated, and governed, and the role that local government may potentially play in this. We problematize this research topic by identifying our research question as: \u003cem\u003eWhy and how might local government initiate and orchestrate a circular economy ecosystem?\u003c/em\u003e\u003c/p\u003e\u003cp\u003eThe importance of the question arises from the increasingly prominent ambition that cities and their local governments hold to facilitate a CE transition within their jurisdiction (Arsova et al., 2022; Chlebna et al., 2024). The objective of our research, therefore, is to identify the options available to local governments for the initiation of circular economy ecosystems as a pathway to CE transition.\u003c/p\u003e\u003cp\u003eWe selected the case study method for our research project. Empirical data were collected through semi-structured interviews from multiple stakeholder group perspectives (Yin, 2018). We explore the concept of circular economy ecosystems to advance the understanding of the market sector conditions necessary for the adoption of circular economy practices by producers and consumers within an ecosystem (Kanda et al., 2021; Kanda, 2023). We identify the special conditions necessary for initiating a circular economy ecosystem and the implications for different stakeholders, including local government. We propose a novel framework to analyse and understand the agency involved in a circular ecosystem.\u003c/p\u003e\u003cp\u003eWe identify a research gap in the literature concerning circular ecosystem initiation, orchestration and governance as it relates to local government (see for example Aryee et al., 2025, Table \u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e, p. 14). Whilst Uusikartano et al. (2020, p. 23) provide a useful analysis on the roles (operator, organizer, financer, supporter, policymaker, regulator) that local government may have in an ecosystem and the modes of their agency (facilitator or dirigiste), they identify a gap in understanding of public agency and governance of CE ecosystems and recommend, \u0026ldquo;Future studies could therefore examine [\u0026hellip;] what kind of power structures and issues emerge among the different actors and stakeholders of CE, which roles different stakeholders can have, and whether the recognized public actor roles be performed as such or in an adapted manner by private sector actors as well.\u0026rdquo; Our research addresses the gap related to the role of local government and its potential influence on initiating, orchestrating, and governing circular ecosystem development.\u003c/p\u003e\u003cp\u003eThe article is structured in five sections: First, we review the literature for guidance on ecosystems and establish the known challenges and key success factors related to CE transitions. This is followed by our research method and findings sections. In the discussion, we refine a novel model for circular ecosystems transitions and deduct guidelines for local government initiation of a circular ecosystem before concluding the article, discussing limitations and future research avenues.\u003c/p\u003e"},{"header":"2.\tLITERATURE","content":"\u003cp\u003eIn this section, we review related work in the key theoretical fields on which this research builds: ecosystems and, especially, circular economy ecosystems.\u003c/p\u003e\n\u003ch2\u003e2.1 Ecosystems\u003c/h2\u003e\n\u003cp\u003eThe term and concept of an ecosystem, loosely connected to the systems thinking concept, was coined by Tansley, a British plant ecologist at Oxford University in 1935 (Trudgill, 2007). The first reference to the ecosystems concept in an organizational and business sense is attributed to Moore (1993, p. 76), referring to the need for a company to \u0026ldquo;be viewed not as a member of a single industry but as part of a \u003cem\u003ebusiness ecosystem\u0026nbsp;\u003c/em\u003ethat crosses a variety of industries.\u0026rdquo; The concept of ecosystems has gained increasing prominence in business science since the 1990s and has significantly developed from its first business use (Baldwin et al., 2024).\u003c/p\u003e\n\u003cp\u003eTo understand the concept of ecosystems in a socio-economic context, we start with Moore\u0026rsquo;s (1993, p.76) description of the need for cooperation, \u0026ldquo;companies co-evolve capabilities around a new innovation: they work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.\u0026rdquo; Ecosystems are based on multi-lateral and non-hierarchical relationships, unlike the case of hierarchical industrial supply chains, for example (Adner, 2017). The actors in an ecosystem are autonomous but interdependent (Baldwin et al., 2024; Gomes et al., 2023), with a mutual emphasis on cooperative relationships to achieve \u0026ldquo;a focal value proposition [where each actor] captures enough of the value created by the group to keep them involved.\u0026rdquo; (Baldwin et al., 2024, p. 3). Further, Adner (2017, p. 40) categorizes ecosystems as being either (1) \u0026ldquo;ecosystem-as-affiliation\u0026rdquo; with an actor-centric perspective, or (2) \u0026ldquo;ecosystem-as-structure\u0026rdquo; with the perspective of \u0026ldquo;ecosystems as configurations of activity defined by a value proposition.\u0026rdquo;\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eTo further clarify the ecosystem concept, Baldwin et al. (2024) propose three conditional criteria to characterize socio-economic ecosystems, namely, autonomy, complementarity, and modularity: \u003cem\u003eAutonomy:\u003c/em\u003e in a free market economy, every actor must remain solvent, or be restructured to do so, and must capture enough value to cover their costs when engaged in an ecosystem. \u003cem\u003eComplementarity\u003c/em\u003e provides an incentive for actors to engage in the ecosystem and extract more value from participation than would be possible if they were operating separately. \u003cem\u003eModularity\u003c/em\u003e supports \u0026ldquo;the notion that ecosystems can arise through an evolutionary process of disaggregation from [fully] integrated to more modular architectures, or a process of aggregation in which new or existing components are linked in new ways for joint-value creation\u0026rdquo; (Baldwin et al., 2024, p. 2).\u0026nbsp;\u003c/p\u003e\n\u003ch2\u003e2.2 Circular Ecosystems\u003c/h2\u003e\n\u003cp\u003eAs key underlying schools of thought, the fields of industrial ecology (Ashton, 2008) and industrial symbiosis (Chertow, 2007) have bequeathed the ecosystem perspective and its analytical consequences to the field of circular economy, where it increasingly gains traction (Geissdoerfer et al., 2025). The circular economy ecosystem perspective was first introduced in 2016 and has gained increasing importance in circular economy studies (Pietrulla, 2022). The focus of circular economy ecosystem literature is on value creation and capture through incorporating circular economy principles in product, process, technology, or service design and its delivery to users (Kanda, 2023; Kanda et al., 2021).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe need to better understand the interrelationship and collaboration between different actors, CE innovation, and circular business models (CBMs) was initially approached through an industrial symbiosis and industrial ecology lens (Zucchella \u0026amp; Previtali, 2019), before leading to the circular ecosystem perspective that a firm-, business unit-, or product-centric focus is often inadequate to address the number of stakeholders, the complexity and the required coordination that characterizes many CBMs (Geissdoerfer et al., 2020; 2025; Kanda et al., 2021). The same authors forward the view that an ecosystem perspective allows companies to move beyond pure economic value creation to include social and environmental value and use it as a competitive advantage. Konietzko et al. (2020, p.1) provide a contrasting view that circularity \u0026ldquo;needs to be understood as a property of a system (e.g., the mobility system of a city), rather than a property of an individual product of service (e.g., a car or a car-sharing service).\u0026rdquo;\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eOne lens on circular ecosystems emphasizes cooperative relationships and the affiliation of actors who agree to collaborate with one another as the key organizing principle (Barquette et al., 2023). This is closely aligned with the concept of \u0026lsquo;ecosystem-as-affiliation\u0026rsquo; where all relevant stakeholders along a material flow chain must be considered to enact circularity (Pietrulla, 2022). An alternative lens highlights the ecosystem-as-structure focus on the activities required of actors and the interdependent coordination of ecosystem activities, such as end-of-life resource management. Taking a biomimetic view, Tate et al. (2019) posit that a shift in perspective from closed, mechanistic business ecosystems to a circular value-driven ecosystem highlights the need for material and information flows to become more integrated to do so.\u0026nbsp;Kanda (2023, p. 8) calls for \u0026ldquo;a complementary approach that combines insights from systems and ecosystem perspectives including the agency and governance of actors in these different conceptualizations\u0026rdquo;.\u003c/p\u003e\n\u003cp\u003eAccording to Geissdoerfer et al. (2025) there are three different types of circular economy ecosystems: \u003cem\u003emulti-actor ecosystems\u003c/em\u003e, including business, industrial and innovation ecosystems, bring together producers, suppliers, service providers, end users, regulators and civil society to achieve a shared circular outcome, often through geographically bounded industrial systems and joint value creation across multiple actors; \u003cem\u003eplatform and knowledge\u0026nbsp;\u003c/em\u003eecosystems, comprising digital/platform and knowledge ecosystems, which coordinate heterogeneous actors around technological or market-oriented platforms and around knowledge translation, enabling data sharing, economic interaction and the uptake of CE research into practice; and \u003cem\u003esector-specific ecosystems\u003c/em\u003e, such as urban, entrepreneurial/start-up, service, multi-project and food ecosystems, which focus on particular material, spatial or industry contexts, for example urban flows and infrastructures, the scaling of sustainable start-ups, service co-creation, or circular construction chains that connect multiple projects.\u003c/p\u003e\n\u003cp\u003eWhile not using \u0026lsquo;ecosystem\u0026rsquo; terminology, Cramer (2020) establishes a framework for the regional governance of circular economy implementation that highlights four functions into which stakeholders and their actors can be grouped: technology development and optimization; socio-cultural changes; market creation; and creation of preconditions. Local government is identified in the \u003cem\u003ecreation of preconditions\u003c/em\u003e function. To this, a fifth function is added: system orchestration, with a system intermediary, known as a \u0026lsquo;transition broker\u0026rsquo;, as the key actor. In presenting this work, Cramer (2020) further identifies a research need to add a function/s to account for civil society as a key actor in the ecosystem. Bourdin and Torre (2024, p. 9), taking an economic geography lens, introduce a framework for a territorial circular economy as a \u0026ldquo;dynamic, interconnected set of economic players, institutions, policies, and practices within a specific territory [...] to optimize resource flows, reduce waste, and promote regeneration through circular economy principles.\u0026rdquo; The visual framework depicts a \u0026lsquo;central arena\u0026rsquo; in which the circular ecosystem activity takes place, with each of the nominated influences interacting within this arena (Bourdin \u0026amp; Torre, 2024, p.11).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eDrawing on the work of Cramer (2020) and Bourdin and Torre (2024), we synthesize a circular ecosystem framework with a comprehensive set of functions as the organizing principle. This approach aligns with Cramer (2020) and the work of other scholars who foreground functions and functional groups in the analysis of systems (Bertassini et al., 2021; Elzinga et al., 2023), and system intermediaries \u0026ldquo;through the functions they perform, sometimes constituting a specific actor category with a separate identity, as either an individual or an organisation\u0026rdquo; (Kivimaa et al., 2019, p. 1063). To identify the encompassing functions in a circular ecosystem representative of all stakeholder groups and other influences in the \u0026ldquo;dynamic, interconnected set\u0026rdquo; (Bourdin and Torre, 2024, p. 9), we draw on related work (Bertassini et al., 2021; Bourdin \u0026amp; Torre, 2024; Cramer, 2020; Elzinga et al., 2023; Kanda et al., 2021; Kivimaa et al., 2019; Moggi \u0026amp; Dameri, 2020; Tabas et al., 2025) to construct a synthesis matrix (Table 1). In column 1 of Table 1, we identify the comprehensive set of functions that represent all circular ecosystem influences and are incorporated into a synthesized circular ecosystem framework (Figure 1). Columns 2 to 4 of Table 1 include the interpretations of scholars who identify functions as the organizing principle of ecosystems (Bertassini et al., 2012; Cramer, 2020; Elzinga et al., 2023), whilst columns 5 to 9 include the interpretations of scholars who identify stakeholders (and their representative actors) as the organizing principle of ecosystems (Bourdin \u0026amp; Torre, 2024; Kanda et al., 2021; Kivimaa et al., 2019; Moggi \u0026amp; Dameri, 2020; Tabas et al., 2025). The synthesis of the comprehensive set of circular ecosystem functions in column 1 (Table 1) is guided by: (1) explicit identification of circular economy knowledge building and diffusion, and the circular economy innovation process; (2) separate functions for market sector supply and market sector demand; (3) recognition of the full spectrum of public sector involvement; and importantly, (4) recognition of the institutional influence of dominant values, norms, and culture in society. The last of these guidelines addresses the expressed need to do so (Cramer, 2020), as well as the inclusions made by other scholars (Table 1: Bertassini et al., 2021; Elzinga et al., 2023; Kanda et al., 2021; Tabas et al., 2025).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThe circular ecosystem framework depicts a central \u0026lsquo;arena\u0026rsquo; in which the dynamics of the ecosystem plays out (Figure 1). The core function in the ecosystem arena is that of \u003cem\u003einitiation and orchestration\u003c/em\u003e. The other six ecosystem functions engage and interact in the arena as determined by the dynamics of the specific circular economy value proposition, value creation, and value delivery process on foot. To this depiction, we add the typology of four perspectives that together embrace the full range of socio-economic activity: the \u003cem\u003ebusiness and technology\u003c/em\u003e,\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eTable 1: Synthesis of Functions in a Circular Ecosystem\u003c/p\u003e\n\u003ctable border=\"1\" cellspacing=\"0\" cellpadding=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd rowspan=\"2\" valign=\"top\"\u003e\n \u003cp\u003e\u003cstrong\u003eSynthesized Functions in a CE Ecosystem Framework\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"3\" valign=\"top\"\u003e\n \u003cp\u003e\u003cstrong\u003eFunctions identified in Related Work (by Author/s)\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003e(classified according to taxonomy in column 1)\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"5\" valign=\"top\"\u003e\n \u003cp\u003e\u003cstrong\u003eStakeholders (and actors representing them) and Institutional Elements identified in related work (by author/s)\u003c/strong\u003e\u003c/p\u003e\n \u003cp\u003e\u003cstrong\u003e(classified according to primary functional activity of stakeholders and the function taxonomy in column 1)\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003eBertassini et al. (2021)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eCramer (2020)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eElzinga et al. (2023)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eBourdin \u0026amp; Torre (2024)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eKanda et al. (2021)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eKivimaa et al. (2019)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eMoggi \u0026amp; Dameri (2020)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eTabas et al. (2025)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e\u003cstrong\u003e1\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e2\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e3\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e4\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e5\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e6\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e7\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e8\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"top\"\u003e\n \u003cp\u003e9\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003eInitiation \u0026amp; Orchestration\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eSystem Orchestration\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eProvision of Problem \u0026amp; Solution Directionality; Coordination of Transition\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eResource Mobilization \u0026amp; Support\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;a locus of coordination driven by key actors\u0026quot; (p. 2817)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;Intermediary actors are often identified through the functions they perform\u0026quot; (p. 1063)\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eParticipative governance and \u0026quot;shared common values\u0026quot; as a pre-condition to ecosystem formation (p. 2838)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003eCE Knowledge\u0026nbsp;\u003cbr\u003e\u0026nbsp;Building \u0026amp; Diffusion\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eCircular Innovation Opportunities\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eResearch \u0026amp; Technology Development\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eKnowledge Development; Knowledge Diffusion\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eInnovation Culture \u0026amp; Knowledge Sharing\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;Sharing of knowledge\u0026quot; as a pre-condition to ecosystem formation (p. 2838)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003eCE Innovation:\u0026nbsp;\u003cbr\u003e\u0026nbsp;Value Proposition,\u0026nbsp;\u003cbr\u003e\u0026nbsp;Creation \u0026amp; Delivery\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eValue Proposition\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eResearch \u0026amp; Technology Development\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eResource Mobilization; Entrepreneurial Experimentation\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eResource Mobilization \u0026amp; Support\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;A joint approach to value creation for customers underpinned by value networks\u0026quot; (p. 2817)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;One of the most important issues for CE is the achievement of financial self-sufficiency over time\u0026quot; (p. 2838)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;Customers should be co-creators of CE value\u0026quot; (p. 411)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003eMarket Sector Structure \u0026amp; Supply\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eStakeholders Interactions\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eMarket Creation (supply side)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eLocal Collaborations; Human Capital \u0026amp; Labour Market; Effective Resource \u0026amp; Waste Management Networks; Geographical \u0026amp; Organized Proximity\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;Members in an ecosystem deliver value through an interrelated system of interdependencies\u0026quot; (p. 2817)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;Monitoring the use of shared infrastructure\u0026quot; and \u0026quot;all stakeholders are linked by a shared sense of trust and belong to the ecosystem with common values \u0026quot; (p. 2838)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003eMarket Sector\u0026nbsp;\u003cbr\u003e\u0026nbsp;Demand for\u0026nbsp;\u003cbr\u003e\u0026nbsp;Goods \u0026amp; Services\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eStakeholders Interactions\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eSocio-cultural changes\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eMarket Creation (demand side)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eLocal Collaborations\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;Customer engagement [\u0026hellip;] emphasizes [need for] customer awareness\u0026quot; (p. 410)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003eDominant Values, Norms \u0026amp; Culture\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eCircular Values Opportunities\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eIdentified as a need by Cramer (2020b) but not included in their model\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eCreating Legitimacy\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;a company can move beyond economic value creation to include social and environmental value and use it as a competitive advantage\u0026quot; (p. 2826)\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;Raising customer awareness may require companies to educate them\u0026quot; (p. 410)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd\u003e\n \u003cp\u003e\u003cstrong\u003ePublic Sector\u0026nbsp;\u003cbr\u003e\u0026nbsp;Services,\u0026nbsp;\u003cbr\u003e\u0026nbsp;Policy \u0026amp; Regulation\u003c/strong\u003e\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eSocio-cultural Changes;\u003cbr\u003e\u0026nbsp;Creation of Preconditions\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eMarket Destabilization (removing regulation and financial advantages for existing regime)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003eGovernment \u0026amp; Regulatory Bodies\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e\u0026quot;a pivotal role in the development of the ecosystem was played by the municipality\u0026quot; (p. 2838)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd\u003e\n \u003cp\u003e_\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003e\u003cstrong\u003e\u003cbr\u003e\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003ethe \u003cem\u003esocial and behavioral\u003c/em\u003e, the \u003cem\u003egovernment and policy\u003c/em\u003e, and the \u003cem\u003ecircular economy innovation collaboration\u0026nbsp;\u003c/em\u003eperspectives.\u003c/p\u003e\n\u003cp\u003eFigure 1 visually depicts the relationship of stakeholders to their representative actors, who take up roles in one or multiple circular ecosystem functions. The \u003cem\u003ecircular economy innovation collaboration\u0026nbsp;\u003c/em\u003eperspective identifies the collaboration of the \u003cem\u003ebusiness and technology\u003c/em\u003e, and the \u003cem\u003esocial and behavioral\u003c/em\u003e perspectives, reflecting the predominantly socio-technical processes of circular economy innovation (Konietzko et al., 2020), and the predominantly socio-economic nature of consumption behavior (Tabas et al., 2025).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eIn summary, we find that whereas related work may provide some conceptual and implementation guidance to local government wishing to initiate and orchestrate a circular ecosystem, current models fail to adequately explain local government initiation, orchestration, and governance of circular ecosystems. This identifies a gap in understanding that we seek to address in our research project.\u003c/p\u003e"},{"header":"3. METHODS","content":"\u003cp\u003eThe methodological approach of this research is the case study method, with qualitative data collection through semi-structured interviews enriched by secondary data from published organisation data and reports (Yin, 2018). This approach has been taken to explore the phenomenon \u003cem\u003ehow might local government initiate and orchestrate a circular economy ecosystem?\u003c/em\u003e We find the case study method the most appropriate for investigating \u0026ldquo;a contemporary phenomenon (the \u0026ldquo;case\u0026rdquo;) in depth and within its real-world context, especially when the boundaries between phenomenon and context may not be clearly evident\u0026rdquo; (Yin, 2018, p. 15).\u003c/p\u003e\u003cp\u003eThe key selection criteria for the case studies were: stage of circular ecosystem maturity; clarity of the focal circular economy value proposition; examples of local government-initiated circular ecosystems, as well as not; examples from two countries to generalize the results beyond one country; access to the initiating ecosystem actor; and access to other actors in the ecosystem important to its evolution. To meet these criteria, we identified and researched six case studies, including four exemplars of local government initiation of a circular ecosystem, and two where local government had no role in initiation. The case studies span Australia and the Netherlands with exemplars of both categories of case study selected in each country (i.e., local government as initiator, or not). We selected cases spanning a range of market sectors, including hospitality, light industrial, textile and clothing, construction, and waste management, to make our results as generalizable as possible within the confines of a parsimonious number of case studies. In each case we selected successful circular ecosystems that led to a desired circular economy outcome. We sought case study samples across this range of market sectors and across two countries to limit the level of bias that a narrower selection criterion may have introduced. We recognised, nonetheless, that our selection of case studies may have a bias towards developed economies and limited to those market sectors we sampled. Further details of our case study organisations are provided in Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e and include the motivational trigger for the initiation of each of the circular economy ecosystems. Interviewee details and secondary data sources are provided in Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eSummary of interview organisations, interviewee roles, and ecosystem details\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"8\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c8\" colnum=\"8\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCase #\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eCircular Ecosystem Descriptor\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eMarket Sector \u0026amp; Industries\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eAU/ NL\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003eFocal Value Proposition in the Circular Ecosystem\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c6\"\u003e\u003cp\u003eEcosystem Actors\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c7\"\u003e\u003cp\u003eInitiating Broker / Intermediary\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c8\"\u003e\u003cp\u003eMotivational trigger to circular ecosystem initiation\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e1\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eCircular Hotels initiative\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eHospitality: \u003c/p\u003e\u003cp\u003eHotel Industry \u0026amp; Supply Chain\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eNL\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eCE opportunities across the hotel industry partners \u0026amp; supply chain\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eLocal government, Hotels. Food \u0026amp; Catering, Linen \u0026amp; Laundry, Packaging\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eLocal government officer\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c8\"\u003e\u003cp\u003eExtending the CE ambitions of Amsterdam into one of the city\u0026rsquo;s largest business sectors (80,000 hotel bed capacity)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e2\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eRecreational Parkland Bridge\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eRecreational Parkland: \u003c/p\u003e\u003cp\u003eLight industrial manufacturing\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eAU\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eCE innovation stimulated by directed local government procurement projects\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eLocal government, manufacturers, Knowledge providers.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eLocal government officer\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c8\"\u003e\u003cp\u003eVision \u0026amp; mission inspired by a program initiated by HM Prison Service in the UK to redesign mattresses\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e3\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eIndustrial Materials Exchange\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eCommercial \u0026amp; Industrial: \u003c/p\u003e\u003cp\u003eExcess industrial materials\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eAU\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eDigital platform for industrial materials exchange\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eLocal government, Research \u0026amp; development provider, Manufacturing industry.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eLocal government officer\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c8\"\u003e\u003cp\u003eVision \u0026amp; mission inspired at the intersection of diversion of excess materials and digital marketplace solutions\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e4\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eCircular Denim Clothing\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eRetail:\u003c/p\u003e\u003cp\u003e Clothing \u0026amp; textiles\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eNL\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eDenim fashion clothing with a recycled fiber content\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eLocal government, Customers, Retailers, Textile Manufacturers, Weavers, Yarn producers, textile waste industry\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eLocal \u0026amp; National government and Industry as co-founders\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c8\"\u003e\u003cp\u003eSME in the denim industry with CE vision \u0026amp; ambition partnered with a national government looking for EU inspired \"green deal\" opportunities\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e5\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eRecycled fiber 'White Linen'\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eHospitality: Commercial white linen\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eNL\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eCommercial white linen with high percentage of recycled fiber\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eTextile Manufacturers, Weavers, Yarn producers, Textile waste industry\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eTwo industry professionals as co-founders\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c8\"\u003e\u003cp\u003eEnvironmental and sustainability vision and mission of two industry professionals\u003c/p\u003e\u003cp\u003e(stimulated by involvement as actors in case 1 above).\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e6\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eAsphalt Polymer additive\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eRoad Construction: Plastic Polymers\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eAU\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eCE opportunities for the use of recycled soft plastics and other polymer sources\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eLocal government, Plastic/Polymer waste industry, Asphalt \u0026amp; road industry.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eBusiness entrepreneur\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c8\"\u003e\u003cp\u003eVision \u0026amp; mission of the business owner to maximize recycled plastics \u0026amp; polymer in road asphalt\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eInterviewee Organizational Roles and Secondary Data sources\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"5\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCase #\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eCE Ecosystem Descriptor\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eInterviewee Organizational roles\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eNo. of Interviews\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003eSecondary data sources\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e1\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eCircular Hotels initiative\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1) Local govt. Officer\u003c/p\u003e\u003cp\u003e(2) CE Manager at Hotel, \u003c/p\u003e\u003cp\u003e(3) Packaging Supplier,\u003c/p\u003e\u003cp\u003e(4) Linen Supplier\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e4\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(1) Website\u003c/p\u003e\u003cp\u003e(2) City of Amsterdam reports\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e2\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eRecreational Parkland Bridge\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1) Local government officer \u0026amp; CE thought leader\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e2\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(1) Media posts\u003c/p\u003e\u003cp\u003e(2) Workshop / Conference presentations\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e3\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eIndustrial Materials Exchange\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1) Local government officer \u0026amp; CE thought leader\u003c/p\u003e\u003cp\u003e(2) CEO\u003c/p\u003e\u003cp\u003e(3) Technology Developer\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e4\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(1) Organisation Website\u003c/p\u003e\u003cp\u003e(2) Media posts\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e4\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eCircular Denim Clothing\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1) Ecosystem manager appointed by local government\u003c/p\u003e\u003cp\u003e(2) Advisory Board Member to the ecosystem\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e2\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(1) Organisation Website\u003c/p\u003e\u003cp\u003e(2) Media posts\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e5\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eRecycled fibre 'White Linen'\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1) Business Entrepreneur\u003c/p\u003e\u003cp\u003e(2) Business CEO\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e3\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(1) Website\u003c/p\u003e\u003cp\u003e(2) As a participant at partner launch event\u003c/p\u003e\u003cp\u003e(3) As a participant at partner meeting (RFID topic)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003e6\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eAsphalt Polymer additive\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e(1) Founder \u0026amp; R\u0026amp;D lead\u003c/p\u003e\u003cp\u003e(2) Local government CE Officer\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e4\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e(1) Company media posts (Linkedin)\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eTo achieve saturation on key themes, more than one interview was conducted with several interviewees where this was needed to seek further clarification following initial analysis of the research data, with a total of 19 interviews conducted. We transcribed the interviews and then checked the transcription by listening back to the original recordings. The transcripts were used alongside the secondary documents to inform the analysis, supported by NVivo 14 software as the repository for the coded interviews.\u003c/p\u003e\u003cp\u003eThe research was undertaken in accordance with the ethical conduct in human research and approved by Monash University\u0026rsquo;s human research ethics committee. The project was fully explained, and all interviewees provided explicit consent prior to participating in the research on the understanding that the data would be anonymized and that research data are not made public. Purposeful interviewee selection was based on the requirement for a high degree of knowledge and direct circular ecosystem involvement. In each of the six cases, the initiator and orchestrator of the ecosystem was interviewed, thus providing deep insights into these dynamic aspects of the circular ecosystem phenomenon. In addition, the other interviewees provided views from the full range of ecosystem functional groups, including knowledge providers, research and development providers, goods and service providers, consumers, and policy and regulation providers. The open-ended interview questions explored several lines of inquiry: the background of stakeholder organizations; circular economy innovation; actor roles and the dynamics of circular economy ecosystem involvement; as well as the role and influence of local government.\u003c/p\u003e\u003cp\u003eWe undertook a deductive analysis of our findings. First, we sought evidence of the agency of local government in initiating and orchestrating a circular ecosystem and coded for direct involvement of local government officers in the initiation and orchestration of each case. Second, we assessed evidence for the seven functions we identified in the circular ecosystem framework (Fig.\u0026nbsp;1) and coded for each of the functions. Secondary data was integrated with interviewee data to achieve a higher clarity of the related themes.\u003c/p\u003e"},{"header":"4. FINDINGS","content":"\u003cp\u003eIn this section, we present the details of our findings in relation to two phenomena: deductive evidence of the agency of local government to initiate and orchestrate a circular ecosystem, and deductive evidence for the seven functions identified in our circular ecosystem.\u003c/p\u003e\u003cp\u003eFirst, we find that local government has the agency to initiate circular ecosystems. In each of the three cases where local government had initiated a circular ecosystem (Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e, cases 1\u0026ndash;3), what followed was the successful establishment of a group of stakeholders who met the three conditions of actor involvement in an ecosystem: autonomy, complementarity, and modularity (Baldwin, 2024). In each case, the local government, as orchestrator, had convened a group of stakeholders who were prepared to cooperate, collaborate, and co-create a circular economy value proposition that they would (or could in the future) mutually benefit from and that a critical density of heterogeneous stakeholders was achieved (Tate et al., 2019). The local government officer who initiated the Industrial Materials Exchange circular ecosystem reflected, \u0026ldquo;\u003cem\u003eAnd so I put my hand up as the lead [to orchestrate the initiating stakeholders]\u003c/em\u003e.\u0026rdquo; What differentiated the two categories of case studies, was the ambition by the local government to initiate and establish a circular ecosystem in the first (Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e, cases 1\u0026ndash;3), as opposed to the other (Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e, cases 4\u0026ndash;6). We further find from the second category that local governments may not necessarily have any involvement in a successful circular ecosystem as an actor, as exemplified by Case Study 5 (Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eSecond, we find deductive evidence for each of the seven functions identified in the synthesized circular ecosystem framework (Fig.\u0026nbsp;1). In Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e we provide a comprehensive summary of the evidence for the seven circular ecosystem functions and explicitly link the data to each function. A key finding that emerges from our data relates to the dynamics within a circular ecosystem. A key finding that emerges from our data relates to the dynamics of hegemony of dominant values, norms and culture within a circular ecosystem. For example, in the asphalt additive case, the observed, \u003cem\u003e\u0026ldquo;It's the same with infrastructure projects. If we wait for the stodgy old engineers that run most of these big engineering companies and government departments to come around to a transition to circularity\u0026hellip;. we haven't got time for that\u0026rdquo;\u003c/em\u003e, and adds a further comment on local government procurement, \u0026ldquo;\u003cem\u003eif you leave it to procurement professionals, you'll have the odd enlightened soul working in those departments, but generally speaking, you know, they're closed-minded and obstinate people.\u003c/em\u003e\u0026rdquo; In a second example, the CEO of the Excess Materials Exchange SME, commented on seeking to change the dominant views and culture within potential customer organisations, \u0026ldquo;\u003cem\u003eA lot of them are long-time local government people [and] in their role, say twenty years. They just don't rock the boat.\u0026rdquo;\u003c/em\u003e\u003c/p\u003e\u003cp\u003eIn the Circular Hotels Initiative case, the initiating local government officer provided an insight to the orchestration process, \u0026ldquo;\u003cem\u003eYou keep each other in line. So, you have to learn to create openings with each other and see each other as a kind of partner, and to help each other.\u0026rdquo;\u003c/em\u003e In the Recreational Parkland Bridge case, the initiating local government officer and colleagues identified a 100-year-plus lifespan bridge as the CE value proposition to replace high-maintenance, shorter-lifespan prior practice. In the same case example, a local university\u0026rsquo;s engineering department became a founding circular ecosystem partner and fulfilled an important role in the CE knowledge-building and diffusion function.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eEvidence of Actor involvement in CE Ecosystem Functions.\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"7\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u003cp\u003eSix Cases\u003c/p\u003e\u003cp\u003eCircular \u003c/p\u003e\u003cp\u003eEcosystem Functions\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eCase 1\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eCase 2\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eCase 3\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003eCase 4\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c6\"\u003e\u003cp\u003eCase 5\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c7\"\u003e\u003cp\u003eCase 6\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eCircular Hotels initiative\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eRecreational Parkland Bridge\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eIndustrial Materials Exchange\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003eCircular Denim Clothing\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c6\"\u003e\u003cp\u003eRecycled fiber 'White Linen'\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c7\"\u003e\u003cp\u003eAsphalt Polymer additive\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eCircular Ecosystem Initiation \u0026amp; Orchestration\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eLocal government officer initiates the \"Koplopersgroep Circulaire Hotels\" in 2021.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eLocal government procurement driven initiative in delivery of public services.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eLocal government identification of the CE business need, CE value proposition, and project initiation.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eLocal government in partnership with a national government agency \u0026amp; a clothing manufacture SME.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eInitiation \u0026amp; orchestration by two industry entrepreneurs (inspired by Circular Hotels initiative).\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eInitiation \u0026amp; orchestration by business entrepreneur.\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eCE Innovation and value stream\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003ePursuit of CE value propositions, creation \u0026amp; delivery (for example: food waste reduction; 'circular' linen)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003ePursuit of CE value propositions, creation \u0026amp; delivery for a specific local government need (parkland bridges).\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003ePursuit of CE value creation \u0026amp; delivery of a digital platform for online buyer/seller transactions\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003ePursuit of CE value creation \u0026amp; delivery of a denim fashion clothing with a recycled fiber content.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003ePursuit of CE value creation \u0026amp; delivery of commercial white linen with a high recycled fiber content.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003ePursuit of CE value creation \u0026amp; delivery of recycled polymer additive to improve road asphalt performance.\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eCE Knowledge building \u0026amp; diffusion\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eUse of the \"Circular Scan\" program to identify opportunities.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eEngagement of university research partners.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eNational research agency and a technical university as knowledge building partners.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eInvolvement of full supply chain to experiment \u0026amp; knowledge build high recycled fiber content denim fabric.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eInvolvement of full supply chain to experiment \u0026amp; knowledge build high recycled fiber content fabrics.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eExperimentation and performance testing by founder and road construction partner in the CE ecosystem.\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eMarket Sector Structure \u0026amp; Supply\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e* Initial 10 companies from the sector engaged with local government\u003c/p\u003e\u003cp\u003e* Evolved into 'Green Hotels Club' (Mar. 2023)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eSeven companies became engaged in competitive process for CE solution building and tender.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eMarket sector involvement in the CE delivery testing phase of the CE innovation.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eFull international supply chain involvement (Waste; shredding; yarn spinning; weaving; dying; clothing manufacture).\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eFull international supply chain involvement (Waste; shredding; blending; yarn spinning; weaving; dying).\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eEngagement with road construction companies that contract to local governments to build and/or resurface roads.\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003ePublic Sector Services, Policy \u0026amp; Regulation\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e* SMEs cited as priority.\u003c/p\u003e\u003cp\u003e* \"Circular Scan\" tool.\u003c/p\u003e\u003cp\u003e* Local government officer becomes the program manager (3 yrs).\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eLocal government led weekly review meetings with tenderers and their supply chain partners.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eLocal government CE value proposition; funding acquisition; and orchestration of CE delivery testing partners.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eLocal government managed CE ecosystem project with appointment of program manager (1st 3 yrs).\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eManagement of 'waste' exports across international borders (Note: NOT at local government level).\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eLocal governments as technical specifiers and procurers of road re-surfacing contractors.\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eDominant Values, Norms \u0026amp; Culture\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eProject to reduce hotel buffet food waste through influencing customer behaviorally dominant values, norms \u0026amp; culture.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eChallenge to conventional design solution to design a maintenance free, 100 years plus parkland bridge.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eChallenge to dominant values \u0026amp; norms in the classification of 'excess' industrial material flows as waste.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eParticipant: \"We must focus on [.] how we can get rid of the textile waste mountain and change behaviour again.\"\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eFounder: \" After the start-up phase, we are now seen as a solution within the industry, [..] including the industry associations.\"\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003e* Entrepreneur: \"A lot of them are long-time local government people [and] in their role, say 20 yrs. They just don't rock the boat.\u0026rdquo;\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eMarket Sector Demand\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eMultiple supply chain actors were engaged in the ecosystem to explore B2B CE opportunities for 'downstream' customers.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003eDemand for the CE solution was directly created by the local government procurement for innovation project.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003eDemand for the digital marketplace platform developed in the CE value delivery development phase.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003eSeven participating denim brand owners at start, each committing to target 20% PCR content in denim jeans in 3 years.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eFive founding linen supply companies (NL) in 2022; demand has grown to ~\u0026thinsp;25 companies in 2025.\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c7\"\u003e\u003cp\u003eA local government has entered a 'circular contract' to buy asphalt additive equal to waste soft plastic supplied.\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e"},{"header":"5. DISCUSSION","content":"\u003cp\u003eBased on our findings, we present our typology of circular ecosystems. A circular ecosystem can be conceptualized as a set of \u003cem\u003efunctions\u003c/em\u003e that are the organizing principle of the circular ecosystem. Our approach follows Elzinga et al. (2023), who introduce the concept of functional analysis to mission-specific innovation systems (MIS), and to Cramer (2020), who identifies functions in a model to explain regional governance in circular implementation. In our typology, \u003cem\u003estakeholders\u003c/em\u003e are represented by \u003cem\u003eactors\u003c/em\u003e in the ecosystem functions, and these \u003cem\u003eactors\u003c/em\u003e may be individuals or groups of individuals who engage in the activities of the circular ecosystem. \u003cem\u003eStakeholders\u003c/em\u003e, through their \u003cem\u003eactors\u003c/em\u003e, may be active and have influence in more than one function.\u003c/p\u003e\u003cp\u003eOur findings that local governments may have agency to take up the catalytic function of \u003cem\u003einitiation and orchestration\u003c/em\u003e, echoes that of prior work (Uusikartano et al., 2020). However, the nuance in the findings extends this work to identify that this is the exception and is context dependent. For a local government to have agency, it requires at least one local government officer with the capability and capacity to enact agency, combined with an ambition to materialize a suitable circular economy innovation concept. This was illustrated in the Excess Materials Exchange case example with a local government officer with agency (capability, capacity, and leadership support) and ambition to divert excess industrial materials from landfill.\u003c/p\u003e\u003cp\u003eFurther, our findings confirmed the process of orchestrating a group of stakeholders who were prepared to cooperate, collaborate, and co-create a circular economy value proposition and the agency of local government to do so, and orchestrate the heterogeneous critical density to enable a circular ecosystem to become functional (Linde et al., 2021; Tabas et al., 2025). The nuance in our findings is that the stakeholders are not necessarily all orchestrated to join the circular ecosystem at a point in time before the functional process of circular economy innovation commences. In the Circular Hotels Initiative case example, the initiating core group of stakeholders invited others to join them as the circular economy innovation process progressed. Whilst the initiating group was primarily hotels, subsequent stakeholders who were invited to join, for example, came from the laundry service, packaging, and the hotel industry\u0026rsquo;s food supply chain.\u003c/p\u003e\u003cp\u003eWe found that circular ecosystems can be conceptualized as a set of seven interacting \u003cem\u003efunctions\u003c/em\u003e as the organizing principle of a circular ecosystem. The conceptual design of these functions aims to represent the full range of functional activity that occurs in circular ecosystems. Our approach of functions as the organizing principle of an explanatory framework is like that of Elzinga et al. (2023) who introduced the concept of functional analysis to mission-specific innovation systems (MIS), and of Cramer (2020), who identifies functions in a model to explain regional governance of circular economy implementation.\u003c/p\u003e\u003cp\u003eIn contrast to a functional organizing principle, many circular ecosystem scholars have focused on a range of \u003cem\u003estakeholder\u003c/em\u003e perspectives, including stakeholder relationships (Tabas et al., 2025; Tapaninaho \u0026amp; Heikkinen, 2021); stakeholder value capture (Bertassini et al., 2021); stakeholder supply-chain collaboration (Kuhlmann et al., 2023); and stakeholder ecosystem co-design (Moggi \u0026amp; Demeri, 2020). A further group of circular ecosystem scholars has focused on a range of \u003cem\u003eactor\u003c/em\u003e perspectives, including: actor cooperation (Barquette et al., 2023); multi-actor, multi-level contexts (Boldrini \u0026amp; Antheaume (2021); actors in entrepreneurial circular ecosystems (Kanda et al., 2025); actor roles that local government may take up (Uusikartano et al., 2020); and the role of actors as the organizing principle for ecosystems (Aryee et al., 2025). Importantly, our conceptual design of the circular ecosystem framework, with \u003cem\u003efunctions\u003c/em\u003e as the organizing principle, is compatible with prior work. This recognizes that \u003cem\u003estakeholders\u003c/em\u003e, through their \u003cem\u003eactors\u003c/em\u003e, take on roles in functional groups that create the dynamic interaction within the ecosystem.\u003c/p\u003e\u003cp\u003eThe empirical confirmation of the seven functions within the circular ecosystem framework (Fig.\u0026nbsp;1) includes that of (1) \u003cem\u003einitiation and orchestration\u003c/em\u003e, reflecting the institutional need to catalyze ecosystems and that \u0026ldquo;\u003cem\u003esuccessful circular economy initiatives require orchestration of ecosystem partners\u003c/em\u003e\u0026rdquo; (Parida et al., 2019, p. 716). Reflective of ecosystems with a primary focus on materializing circular economy innovation and solutions, the separate functions of (2) \u003cem\u003ecircular economy innovation: value proposition, creation and delivery\u003c/em\u003e, and (3) \u003cem\u003ecircular economy knowledge building and diffusion\u003c/em\u003e are prominent. The inclusion of these functions confirms prior scholarly work on the importance of entrepreneurship and value stream creation in circular ecosystems (Bertassini et al., 2021; Kanda et al., 2025; Konietzko et al., 2020), as well as knowledge building and diffusion (Asgari \u0026amp; Asgari, 2021; Moggi \u0026amp; Dameri, 2020). Further, the functions (4) \u003cem\u003emarket sector structure and supply\u003c/em\u003e and (5) \u003cem\u003emarket sector demand\u003c/em\u003e reflect the supply and demand functions for goods and services in the ecosystem (Tabas et al., 2025), whilst (6) \u003cem\u003epublic sector services, policy and regulation\u003c/em\u003e is the function that provides policy and regulation to the economic system within which the circular ecosystem is established, as well as support services to socio-economic activity in the ecosystem (Uusikartano et al., 2020). The (7) \u003cem\u003edominant values, norms and culture\u003c/em\u003e function addresses the need identified by Cramer (2020) for inclusion of a societal influence function. Its inclusion, as conceptualized in our work, reflects the important influence of socio-economic behaviour in the ecosystem (Elzinga et al., 2023; Tabas et al., 2025). Recognizing that this may not be an essential consideration in the analysis of all circular ecosystems, the frameworks and definitions that rely more specifically on stakeholders and their nominated actors remain valid for analysis where the choice between the two optional streams of analysis deems it so (e.g., Pe\u0026ccedil;anha \u0026amp; Ferreira, 2025).\u003c/p\u003e\u003cp\u003eIn summary, what is novel in the conceptualization of our circular ecosystem framework is the inclusion of the function of \u003cem\u003edominant values, norms, and culture\u003c/em\u003e. The hegemony of dominant values, norms, and culture in society arises from the socio-economic actors who benefit the most from maintaining it (Vogel et al., 2025). We see circular economy innovation and diffusion as a disruptive socio-economic activity, given that the principles of circular economy often conflict with incumbent socio-economic activity in a consumption-driven, loosely regulated\u003csup\u003e1\u003c/sup\u003e, free-market linear economy (Blomsma et al., 2021). For this reason, we posit that there is a strong need to identify the functional role that dominant values, norms, and culture have in a circular ecosystem. The circular ecosystem enables actors within it to account for the activities and influence they may need to enact from this functional perspective to create the conditions necessary for the contemplated circular value proposition, creation, and delivery to succeed. Introducing this functional activity addresses a gap identified by Cramer (2020, p. 18) in the role of civil society and the potential \u0026ldquo;inclusion of an additional function, in which civil society is the key actor.\u0026rdquo;\u003c/p\u003e\u003cp\u003eA second, more nuanced, point of differentiation from prior work is the recognition that actors in a circular ecosystem may take up different roles in a range of functions, illustrated by the example of clothing retailers represented in the textile \u003cem\u003emarket sector structure and supply\u003c/em\u003e function, whilst highly active in other functions, such as in the \u003cem\u003edominant values, norms, and culture\u003c/em\u003e to advocate for local, sustainable production, and being active in the function \u003cem\u003ecircular economy innovation: value proposition, creation \u0026amp; delivery\u003c/em\u003e. Our findings exemplified that the local government officer in the Industrial Materials Exchange case example took up roles in (1) initiation and orchestration; (2) circular economy innovation and value stream; (3) circular economy knowledge building and diffusion; and (4) market demand.\u003c/p\u003e\u003cp\u003eArising from our novel CE ecosystem framework and building on the definitions provided by Adner (2017) and Aryee et al. (2025) we propose the following definition:\u003cdiv class=\"BlockQuote\"\u003e\u003cp\u003e\u003cem\u003eA circular economy ecosystem is bounded by the alignment structure of the multilateral set of stakeholders and their actors, organized into the functional groups that need to interact for a focal circular economy value proposition and its stakeholder complimentary benefits to materialize.\u003c/em\u003e\u003c/p\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eWe propose this definition in alignment with our CE ecosystem framework, referencing the importance of \u003cem\u003efunctions\u003c/em\u003e within an CE ecosystem (in contrast to the foregrounding of actors by Aryee et al. (2025) for example), whilst also clarifying the roles of \u003cem\u003estakeholders\u003c/em\u003e and their appointed \u003cem\u003eactors\u003c/em\u003e, who through their agency, have influence in the dynamics and outcomes of the CE ecosystem.\u003c/p\u003e\u003cp\u003eFinally, as guidance for local governments, we present Fig.\u0026nbsp;2, which tabulates examples of stakeholders and their representative actors, including local government officers, who may have the (context-specific) opportunity to engage in a circular ecosystem.\u003c/p\u003e"},{"header":"6. CONCLUSION","content":"\u003cp\u003eThe objective of our research was to identify the options available to local governments for the initiation of circular economy ecosystems as a pathway to CE transition. To do so, we undertook case study research on six circular ecosystem case examples, three of which had been initiated by local governments, and three that had not. In our literature review, we synthesized a novel circular ecosystem framework, foregrounding functions as the organizing principle (Fig.\u0026nbsp;1), and confirmed its validity with our empirical findings. We provide a typology and a novel definition of circular ecosystems based on our framework. To meet our research objective, we provide local government a guidance framework (Fig.\u0026nbsp;2) on the (context-specific) roles it may play in circular ecosystems, including as initiator and orchestrator. In achieving our aim, we make two contributions.\u003c/p\u003e\u003cp\u003eFirst, we identify that local government has the agency to initiate and orchestrate circular ecosystems, and the possibility to take up other context-specific functional roles. Second, we present a novel circular ecosystem framework to explain the key functions that stakeholders and their nominated actors fulfill in their interactions to materialize a focal CE value proposition for their mutual benefit. Our framework visualizes seven critical functions and categorizes the \u003cem\u003ebusiness \u0026amp; technology\u003c/em\u003e, \u003cem\u003esocial \u0026amp; behaviour\u003c/em\u003e, and \u003cem\u003epolicy \u0026amp; regulation\u003c/em\u003e perspectives. Notably, the framework supports the functional role analysis of actors in a circular ecosystem, including that of local government actors. For practitioners, the framework clarifies how firms, investors, and civil-society actors can purposefully assume\u0026mdash;or shift between\u0026mdash;ecosystem roles to maximize collective value creation, de-risk investment, and capture first-mover advantages in emerging circular economy sectors. Importantly, our frame introduces a second stream for the conceptual and definitional analysis of circular ecosystems, which is more nuanced than current frameworks and definitions, with functions as the foregrounded organizing principle, as opposed to stakeholders and actors. Whilst our framework recognizes stakeholders and actors, it does so in their agency to be active in functional groups that interact to create the so-bounded circular ecosystem.\u003c/p\u003e\u003cp\u003eOur research is not without limitations. The phenomenon of CE ecosystems is a relatively new topic in the CE field. Based on a parsimonious number of case studies, all deemed of appropriate quality for the research, we provide several novel perspectives that will benefit from further validation: a circular ecosystem analysis framework with functions as the organizing principle, and a guidance model for local government with the ambition to initiate and orchestrate a circular ecosystem. We acknowledge that our research has biases that limit the transferability of our findings: we investigated only mature circular ecosystems with successful outcomes, and while we purposefully sought diversity across market sectors in two developed economies, this remains a limitation to transferability.\u003c/p\u003e\u003cp\u003eArising from these limitations and new research gaps, we make the following recommendations for further studies: (1) an investigation of circular ecosystems that have failed and the reasons for these failures; (2) an investigation into market sectors that are best suited for local government to establish circular ecosystems; and (3) an investigation of the use of the circular ecosystem analytical framework and the benefit (or not) of foregrounding societally \u003cem\u003edominant values, norms, and culture\u003c/em\u003e, and the role this function has in determining circular ecosystem dynamics.\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003ch2\u003eConflict of Interest Statement:\u003c/h2\u003e\u003cp\u003eThe authors declare no conflict of interest.\u003c/p\u003e\u003c/p\u003e\u003ch2\u003eFUNDING INFORMATION\u003c/h2\u003e\n\u003cp\u003eThe primary author received partial funding from Monash Business School, Monash University, Australia, for a research trip to the Netherlands in 2023.\u0026nbsp;\u003c/p\u003e\u003ch3\u003eSUPPORTING INFORMATION\u003c/h3\u003e\n\u003cp\u003eNo supporting information is available for sharing in the public domain.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\n\u003cli\u003eAarikka-Stenroos, L., Ritala, P. \u0026amp; Thomas, L. 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Circular business models for sustainable development: A \u0026ldquo;waste is food\u0026rdquo; restorative ecosystem. \u003cem\u003eBusiness Strategy and the Environment, 28\u003c/em\u003e, 274-285. https://doi.org/10.1002/bse.2216\u003c/li\u003e\n\u003c/ol\u003e"},{"header":"Footnotes","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003e We make this judgement based on the regulation that is required to meet global circular economy needs (IRP, 2024).\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":true,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"journal-of-industrial-ecology","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"","sideBox":"","snPcode":"44498","submissionUrl":"https://submission.springernature.com/new-submission/44498/3","title":"Journal of Industrial Ecology","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Springer Hybrid","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"Circular ecosystems, circular economy, local government, circular economy transitions, industrial ecology","lastPublishedDoi":"10.21203/rs.3.rs-8100547/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8100547/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThe circular economy (CE) is increasingly viewed as a key pathway to sustainable development, but its uptake remains behind expectations. We explore the concept of circular economy ecosystems to advance our understanding of the market sector conditions necessary for the adoption of circular economy practices by producers, consumers and other stakeholders within an ecosystem. Our methodology is a multiple case study with data collection through semi-structured qualitative interviews of key informants instrumental in the initiation of the ecosystem cases, enriched by secondary data. We identify the special conditions necessary for establishing a circular economy ecosystem and the implications for stakeholders, with a special focus on local government. We deduct a novel framework to analyse and understand the agency involved in a circular economy ecosystem. Our framework depicts seven functions with actors from each function potentially involved in the circular ecosystem. Finally, the article outlines the limitations of our work, and testable propositions and methodological avenues for longitudinal case studies, and agent-based modelling to empirically validate and refine the proposed concepts, advancing the research frontier on circular ecosystems.\u003c/p\u003e","manuscriptTitle":"Ecosystem Initiation: A key policy challenge for circular economy transition","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-11-26 07:07:27","doi":"10.21203/rs.3.rs-8100547/v1","editorialEvents":[{"type":"communityComments","content":0},{"type":"editorInvitedReview","content":"","date":"2025-11-14T09:50:37+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"283639179428827807786445167048458494613","date":"2025-11-14T09:48:16+00:00","index":"hide","fulltext":""},{"type":"reviewersInvited","content":"","date":"2025-11-14T09:45:03+00:00","index":"","fulltext":""},{"type":"editorAssigned","content":"","date":"2025-11-13T21:25:36+00:00","index":"","fulltext":""},{"type":"checksComplete","content":"","date":"2025-11-13T06:53:44+00:00","index":"","fulltext":""},{"type":"submitted","content":"Journal of Industrial Ecology","date":"2025-11-13T01:59:25+00:00","index":"","fulltext":""}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"journal-of-industrial-ecology","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"","sideBox":"","snPcode":"44498","submissionUrl":"https://submission.springernature.com/new-submission/44498/3","title":"Journal of Industrial Ecology","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Springer Hybrid","inReviewEnabled":true,"inReviewRevisionsEnabled":false}}],"origin":"","ownerIdentity":"c45bab81-5e1b-44e8-b888-c08b5d17948a","owner":[],"postedDate":"November 26th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"under-review","subjectAreas":[],"tags":[],"updatedAt":"2026-01-04T05:08:34+00:00","versionOfRecord":[],"versionCreatedAt":"2025-11-26 07:07:27","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8100547","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8100547","identity":"rs-8100547","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}