Re et al. (2023). The Role of Institutional Environment in Catalysing Circular Entrepreneurship. A Cross-Country Comparison of Finland and Italy

Summary: This chapter examines how the institutional environment influences the development of circular economy (CE) start-ups in Finland and Italy. Circular economy entrepreneurs focus on reducing material usage, prolonging resource life cycles, and minimizing waste. The study compares the national innovation systems in both countries to understand how different institutional frameworks support CE start-ups. Using six case studies, representing the key CE principles (reuse, reduce, recycle), the research explores the role of institutional pillars — regulative, normative, and cultural-cognitive — in shaping the entrepreneurship landscape. The findings highlight that CE start-ups in both countries face challenges because their solutions often conflict with existing institutional structures. The timing of laws (regulative pillar), the availability of funding (normative pillar), and public awareness (cultural-cognitive pillar) are key factors in either advancing or limiting the impact of these start-ups. The study emphasizes the need for a holistic integration of all institutional pillars to successfully catalyze CE ventures.

Usefulness of the results: The results of this study are significant for the circular economy because they underscore the importance of an enabling institutional framework in driving the success of CE start-ups. By understanding how different pillars (regulations, funding, and cultural awareness) influence CE initiatives, policymakers and stakeholders can design better support systems that help circular start-ups thrive. For example, aligning laws and funding opportunities with CE principles, while fostering a culture of sustainability among citizens, can create a more conducive environment for circular innovations to scale and achieve long-term impact.

Authors: Beatrice Re, University of Pavia, Italy; Kaisa Henttonen, University of Eastern Finland; Ville-Veikko Piispanen, University of Eastern Finland; Hanna Lehtimäki, University of Eastern Finland

Publishing date: 30.11.2023

Format of the publication: Chapter of the book

Publishing platform: The Routledge Handbook of Catalysts for a Sustainable Circular Economy (https://www.taylorfrancis.com/reader/download/90b6be55-35ed-44c3-912f-2af9fea9ede0/chapter/pdf?context=ubx)

More information: ville-veikko.piispanen@uef.fi