Literature review and exploratory field study for existing circular business models (D6.1)

Circularity has long been a topic of discussion among specialists. However, only recently has there been a push to introduce these principles into mainstream business thinking. As businesses explore circularity—whether it's closing material loops, extending product lifespans, or using a narrower range of materials—the inevitable question arises: Is it economically viable? Milton Friedman once asserted that businesses exist solely to generate profit. While we don't necessarily view this as an absolute truth, there's no denying the underlying economic reality: resources are finite. This scarcity means that we have to be judiciousin their use, focusing on what is truly essential. Prices, in an ideal world, should reflect these limitations, guiding businesses toward areas with the highest profit potential. However, here's where the challenge presents itself. There are instances when the price tag on a product doesn't truly capture all the external consequences, particularly the environmental and social ones. This discrepancy is evident in many linear business models, especially in sectors like digital health. Often, the costs of production,distribution, and disposal overshadow the product's price, leaving society to bear the brunt of the unaccounted externalities. With this backdrop, this report dives into the realm of digital health, aiming to understand how a circular business model might work in such a setting. We assert that any business model must place its end-users at its heart. In the context of digital health devices, this means focusing on how effectively these devices diagnose, monitor, and treat illnesses, or contribute to overall health maintenance. But it's also about acknowledging the realities of economic constraints, both from the user's and the producer's perspectives. For circularity to truly take root, every link in the value chain, from manufacturers torecyclers, must see a net positive return on their efforts. Based on a one-year research effort, including a systematic literature review and interviews, our report identified four promising circular business models tailored for digital health devices. This report also touches upon the challenges and nuances of integrating circularity, especially for established firms such as pharmaceutical and medical technology firms and their stakeholders. To sum it up, this report is an invitation to view the world of digital health through a circular lens, offering a fresh perspective that might just be the stepping stone we need toward a more sustainable economy.