Crafting open innovation for collaboration: Insights into multi-actor dynamics for the circular economy transformation

The European Union’s circular economy (CE) policy aims to foster closed-loop systems that reduce waste and resource use, yet its practical implementation remains limited. Open innovation (OI)—the cross-organizational sharing of knowledge and collaborative problem-solving—offers a promising but underexplored pathway to accelerate circular economy transformation, particularly by enabling collaboration among diverse actors. This study addresses a critical research gap by examining how OI instruments mobilize multi-actor collaboration for circular economy goals, using an in-depth case study of Fab City Hamburg (FCH)—a pioneering initiative combining OI and CE principles to promote local, open, and circular production. Drawing on qualitative analysis of two circular open labs within FCH and integrating insights from transition theory with the small wins governance framework, we offer original insights into the dynamics of open innovation for circular economy transformation. Our findings reveal that open innovation instruments foster spreading and partial deepening of circular practices by supporting learning, experimentation, and community-building. However, significant barriers to broadening collaborations persist, including conflicting understandings of openness and circularity, organizational asymmetries, and unstable funding structures. The study contributes to the literature on CE and OI by offering a multi-actor, governance-oriented perspective on collaborative circular innovation. We highlight both synergies and frictions in applying OI to CE contexts and provide practical guidance for policymakers, intermediaries, and practitioners seeking to foster collaborative innovation and overcome barriers in circular economy transitions.