Urban Business Models - Exploring business models in the urban environment with a focus on sustainability, circularity and inclusivity, leading to hybrid forms of collective value creation.

More and more people live in cities. This growth trend is expected to continue leading to ‘wicked’ interconnected problems in the urban environment related to, for example, mobility, social inclusivity, food supply, energy supply, sustainable livelihoods etcetera. In order to secure healthy, clean and flourishing cities many of these activities and related services will have to change drastically. This is why radically new perspectives on urban development are needed. To develop meaningful development programmes investing in citizen participation and city-wide multi-stakeholder collaboration is crucial. In this regard, one concept that has received an increasing amount of attention in relation to European cities is the circular economy (CE). The essence of CE is the deployment of configurations of resource-life extending strategies which enable the organisation of materials and resources in long and short term cycles in order to deliver value retention avoiding value loss and destruction. However, many activities and issues in the urban environment cannot be, or only to a limited extent, organised in material cycles. Therefore, an urban development approach which only focuses on material cycles is inadequate. To address this, the notion of the circular economy should be integrated with the ideas of ‘sustainability’ and ‘inclusivity’. Sustainability relates to the radical reduction of resources (more broadly than just materials) whilst inclusivity brings to the fore the human and social dimensions of urban life. This results in an urban development approach crafted on the integration of these three interlinked concepts, which can enable collective and multiple value creation. This integrated approach provides a promising starting point to address the complex urban problems that exist and might offer the basis for urban transitions. Key premises underpinning this perspective are that cities foster different types of capacities and competences –from material, spatial, social, institutional to financial - that are currently underutilised and can be deployed to create value. Utilising these idle capacities enables the emergence of innovative approaches to collective value creation and solutions between parties encapsulated in the concept of Urban Business Models (UBMs) developed herein. First, this White Paper explores how the integration of circularity, sustainability and inclusivity within the urban environment can foster collective value creation. Second, it unpacks the building blocks of UBMs and the role these can play in harnessing idle capacity and providing a means for structuring citizen participation in order to catalyse much needed urban transitions.