Co-creating a path to circularity for SMEs

The challenge

Many SMEs are already taking steps toward circularity. Saving energy and materials and recycling within their own operations have become part of everyday business. Some have ideas for circular materials, products or services. The harder part is often what comes next: testing those ideas, putting them into practice and scaling what works.

Changing material sources, designing for circularity, repurposing offcuts, selling recycled materials and offering rental services all involve more players. Companies need to know what they can contribute, which capabilities they lack and who can help. Together, those partners can design and run a first small-scale experiment.

Take a challenge identified by one group in the 2026 Textile Co-Creation Lab: turning offcuts into marketable products. The group brought together a DEI organization supporting women's empowerment, a bio-based dye producer, a recycled material supplier and a company integrating circular procurement and recycling management. Before joining the Lab, they did not know how their capabilities could complement one another. By connecting materials, technology, design and recovery management, they found the beginnings of a circular solution they could test further.

Over eight years, Lab partners have launched business model experiments across different circular economy pathways. They have explored recycled materials; digital and low-carbon design and production; cross-industry uses for resources; circular design across the product life cycle and product-as-a-service models; single-material products; natural fibers; and digital product passports. More than 30 topics have been discussed and tested. Examples include:

There is no single path to a circular economy. Companies can start with the challenges they face, find the right partners and use small experiments to turn an idea into a solution they can test.

Our approach

At the Textile Co-Creation Lab, BMI Taiwan helps companies turn circular challenges into experiments they can run. We start with three steps:

• Narrow the challenge to a scope that can be validated.
• Clarify each company's role, capability gaps and the partners it needs.
• Run a small-scale experiment first, then use the feedback to decide whether to invest further.

Using the Circular Transition Goals and Roadmap, we help participants explore opportunities in circular procurement, manufacturing, design, services and recycling management. Teams identify the assumptions they need to test, agree on each partner's role and design focused experiments that generate useful feedback. This helps companies test technical and market feasibility before changing their operations or committing significant capital.

The results

• More than 120 companies participated over eight years, starting in 2019.
• The Lab helped launch more than 30 cross-company collaboration projects.
• The Lab created a space for dialogue among manufacturers, brands, recyclers, technology providers, government agencies, verification bodies and industry experts.
• Companies clarified their roles, capability gaps and the partners they needed.
• Cross-disciplinary teams turned collaborative ideas into actionable small-scale experiments.
• Companies could begin their circular transition with small-scale experiments before making major process changes or capital investments.
• The co-creation network has expanded into furniture, ICT, outdoor education, social enterprise, bio-based dyes, chemicals and recycling equipment.

Want to explore how co-creation can help SMEs take their first steps toward circularity?

Read the full story: How can SMEs start their circular economy transition without a dedicated team or budget? →

The method stayed with the team. It always does.