Abstract
The current linear economy has led to environmental pollution and resource depletion. To tackle these issues, a new economy model has emerged, namely the circular economy. Being a new economic model, the transition to a circular economy is particularly challenging for existing companies that have designed their business models and collaborations in a linear fashion. This aspect holds particularly true in resource‐intensive industries characterized by long value chains. Among these industries, the building one stands out as characterized by high resource consumption and complex value chains. We argue that in such an industry, the transition to circular economy calls for establishing collaborations between the different players involved to access external competences and engage in a new way the whole value chain. Open innovation enables to access these external competences and fosters collaboration throughout the whole value chain. Taking the façade of a building as a unit of analysis, we aimed at investigating how companies exploit open innovation to implement circular economy initiatives. To address this issue, we leverage the original open innovation framework developed by West & Bogers (2014) adapting it to the peculiarities of the circular economy transition. By applying the action research methodology to analyse the interplay between circular economy and open innovation in the building façade industry, we get evidence that open innovation plays a key role in enabling the transition towards circular economy in a façade‐as‐a‐service model. The need for external knowledge sources in circular product design is reported in order not to have mismatches throughout the product useful life. Besides, we point out the relevance of collaborations in circular economy transition to jointly design products and business models according to the circular economy principles.