sustainability

Article
Governing a Sustainable Business Ecosystem in
Taiwan’s Circular Economy: The Story of Spring
Pool Glass
Ying-Che Hsieh 1, *, Kuo-Yi Lin 2 , Chao Lu 3 and Ke Rong 4
1 Institute of Technology Management, National Tsing Hua University, 101, Sec. 2, Kuang-Fu Road,
Hsinchu City 30013, Taiwan
2 Department of Business Administration, Asia University, 500, Liufeng Road, Wufeng Dist.,
Taichung City 41354, Taiwan; [email protected]
3 School of Management, Shanghai University, 99, Shangda Road, Shanghai 200444, China; [email protected]
4 Institute of Economics, School of Social Science, Tsinghua University, Beijing 100084, China;
[email protected]
* Correspondence: [email protected]; Tel.: +886-3-574-2417

Received: 8 May 2017; Accepted: 16 June 2017; Published: 20 June 2017

Abstract: The business ecosystem has provided a new paradigm for management research.
Most research in the field has focused on profit-driven industries, neglecting the area of the circular
economy. This research sets out to capture the mechanisms that the leading firm in the circular
economy uses to govern its business ecosystem. The research strategy adopted is a longitudinal
case study of the largest glass recycling company in Taiwan, Spring Pool Glass. Our findings
illustrate that continuous value capture is the key to governing a sustainable business ecosystem
in the glass recycling industry. The mechanisms include continuous value capture to enter new
markets, using stakeholder networks to enlarge the business ecosystem, brand image and corporate
social responsibility, company capabilities and research and development in the recycling process,
and reacting to government policy.

Keywords: business ecosystem; circular economy; Taiwan; glass recycling

1. Introduction
The concept of the ecosystem provides a systemic way to describe social systems via the business
ecosystem [1], platform ecosystem (mainly information technology based research) [2,3], innovation
ecosystem [4–6], and entrepreneurial ecosystem [7] and thereby to extract theories of complementary
invention and develop indirect network effects. It offers researchers a new concept with which to
capture the complexity and dynamic nature of modern industrial systems [8]. Researchers have
used this concept to capture new phenomena that could not be fully explained by previous theories
(e.g., Shanzhai cellphones, the ARM versus the Intel ecosystem). As the actors to be considered in
investigating new phenomena these days may be dispersed across different firms, industries, or even
countries, previous concepts such as subcontracting or supply chains may not be sufficient to portray
the whole picture [8].
Business ecosystem research has now been carried out in many areas such as strategic
management, innovation, operations management, and others. Most of the current research has
focused on the economic value created by the business ecosystem. For example, Li’s research
claimed that the services, tools, or technologies shared in a platform ecosystem could enhance the
performance of its members [9]. However, little research has focused on how the operations of a
business ecosystem could have a positive impact on our environment (overall sustainability). As global

Sustainability 2017, 9, 1068; doi:10.3390/su9061068 www.mdpi.com/journal/sustainability

Sustainability 2017, 9, 1068 2 of 15

and regional environmental initiatives have started to emphasize environmental protection, more and
more countries and international organizations have begun to recognize the importance of waste
management, recycling, reuse, and sustainable development. We feel there is a chance and also a ‘need’
to develop a new stream of business ecosystem research linked to the circular economy, with the aim of
contributing to the knowledge of how a leading firm might lead a ‘good’ and ‘sustainable’ ecosystem,
in order to maintain both business and environmental value at the same time.
The concept of the circular economy has prospered in recent years, covering the ideas of industrial
symbiosis and extended product life [10]. The manufacturing operations, delivery processes, and
waste management of companies have also become significant factors in the consumer’s purchasing
decision. In turn, scholars, governments, and industry have started to pay great attention to this area,
embracing the idea of the green economy. Recently, this trend has also swept Taiwan. According to
The Wall Street Journal, in the past, Taiwan was known as ‘the garbage island’, but it has now become
a model of resource recycling [11]. This huge transformation has necessitated numerous industries to
change their old processing patterns.
In the development of industry, Taiwan plays an important role from glass products to high-tech
products and from material extracting to manufacturing. In terms of discarded glass bottles, the average
annual volume of recycling in 2014 and 2015 had reached 227 thousand tons [12]. Moreover, about six
thousand tons of waste liquid crystal display (LCD) are discarded each year due to the growth of the
optoelectronic and high-tech industries [13]. Such waste glass can cause unpredictable contamination
of landfill, incineration, or composting processes. Hence, the treatment of waste glass should be moving
in the direction of the recovery and reuse of LCD. The recycling of glass can help to reduce resource
consumption, waste, the use of energy, and air and water pollution. Glass recycling industries are
being taken more seriously by global policy and environmental trends. However, they face problems
in the form of uncertainty about market needs and low profit margins.
Hence, this study seeks to investigate the largest glass recycling firm in Taiwan, Spring Pool Glass,
in the hope of learning from their experience of governing their business ecosystem under the circular
economy, which has demonstrated both economic and environmental value, in the Asian context.

2. Literature Review

2.1. Business Ecosystem Research

The business ecosystem is a concept that is currently seeing a boom in terms of the number
of scholars using it to provide a perspective on business communities. The concept takes the
analogy of biology, in which random collections of elements tend to gradually form a more structured
community [1,14]. The business ecosystem concept moves beyond the view of traditional market
positioning and industrial structure, positing instead three major characteristics: symbiosis, platform
and co-evolution [9]. As the ecosystem matures, its leading firms should pursue strategies not only in
their own interests [15] but also to improve the overall health of their ecosystem [16]. Since Moore [1]
first proposed the concept, four streams of research have emerged and contributed to the body of
knowledge on business ecosystems [17].

2.1.1. Business Ecosystem

The first stream of research was inspired by the work of Moore proposing the concept of the
business ecosystem and its lifecycle [1]. He claimed that every business ecosystem will go through
four distinct stages: birth, expansion, leadership, and self-renewal/death. At the birth stage, firms
will capture value around a certain innovation by working with their customers and suppliers. At the
expansion stage, firms will expand into a larger market by cooperating with suppliers and partners,
seeking to maximize market share. At the leadership stage, the leading firm will provide a vision for
the future so that the stakeholders will be guided and encouraged to work together. At the self-renewal
stage, the challenge is to work with new ecosystems or innovations that emerge from the existing
Sustainability 2017, 9, 1068 3 of 15

ecosystem. The lifecycle approach provides scholars with a valid framework through which to analyze
the evolution of major businesses. Moore provided cases from the retail and automobile industries
to demonstrate his lifecycle approach [1]. Rong et al. also used the lifecycle approach to analyze the
platform strategy within the semiconductor industry [17].
The Cambridge Group extended business ecosystem research by proposing a 6C framework [18]
and a schema for regional ecosystems [7]. Rong et al. [18] proposed the 6C framework, comprised
of context, construct, configuration, cooperation, capability, and change, based on their research in
Internet-of-Things-based sectors. They argued that the 6C framework was useful for understanding
the complex network system that forms the business ecosystem. The context dimension looks at
how firms’ missions, drivers, and barriers change at different stages of the lifecycle. The construct
dimension, namely the ‘structure-infrastructure’ framework commonly used in manufacturing systems
and supply-chain management, defines the fundamental structure and supportive infrastructure in the
ecosystem. The configuration dimension defines the configuration patterns and external relationships
among partners in the ecosystem. The cooperation dimension illustrates the mechanisms by which
partners interact with each other to achieve common goals. The capability dimension reflects the
key success factors of a supply network such as communication and accessibility, integration and
synergy, learning ability, and adaptation and mobility. The change dimension seeks to identify how
system configuration patterns shift over time. Overall, the 6C framework provided a whole-system
architecture with which to study networks from a more comprehensive perspective [18].
Another model proposed by the Cambridge Group was a schema for regional ecosystems [7],
which takes a geographic perspective. Researchers have started to realize that there are regional
impacts on value creation and technology transfer in the ecosystem [19]. The Cambridge Group’s
conceptual model illustrated that startups would access the resource pool in social networks embedded
in a particular region. These resources might be human resources such as fresh graduates and skilled
workforces and institutions such as venture capitalists or local infrastructure. Then the value creation
process would transform the local resources embedded in the social network into value networks.
Finally, the value network would create a feedback loop back to the local resource pool, accompanied
by the clustering of manufacturing industries in a certain region. Their work provided a different
perspective on business ecosystems in a geographic regional setting.

2.1.2. Platform Ecosystem

The second stream of research has enriched the knowledge of business ecosystems by introducing
the concept of the platform ecosystem. Iansiti and Levien stated the importance of a platform
strategy for a keystone firm wishing to create its ecosystem [16]. The platform could be a physical
set such as the ‘efficient manufacturing capabilities that Taiwan semiconductor manufacturing offers
to computer-chip design companies that don’t have their foundries’ or an intellectual asset such
as Windows software [16] (p. 7). Rong et al. argued that the platform was a critical element of
the value creation process, acting as a business ecosystem’s interaction interface [17]. The services,
tools, and technologies provided by the platform would also enable the members of the ecosystem to
enhance their performance [9]. Gawer and Cusumano later identified two types of platform, internal
or company-specific and external or industry-wide [20]. Internal (company or product) platforms
offer the firm itself or its suppliers the opportunity to build products or features by sharing reusable
components or technologies. External (industry) platforms allow large numbers of firms to ‘open’
and share their products, services, or technologies to achieve a network effect that boosts innovation.
Gawer and Cusumano also identified practices for platform leaders to use to effectively manage
platform competition and innovation [20].

2.1.3. Innovation Ecosystem

The third stream focuses on the innovation ecosystem [21]. In the key paper in this stream [4]
(p. 98), Adner defines the innovation ecosystem as ‘the collaborative arrangements through which firms
Sustainability 2017, 9, 1068 4 of 15

combine their individual offerings into a coherent, customer-facing solution’. Adner’s work provides
a different angle for looking at how firms should develop their innovation strategy while considering
three fundamental risks. Researchers have also identified how external innovators influence the focal
firm’s (technology leader’s) new innovation. Adner and Kapoor found that the ‘location’ of the external
innovators could either enhance or erode the focal firm’s technology leadership [22]. Later, Adner
and Kapoor developed a framework considering focal competing technologies and the innovation
ecosystem in which they were embedded [23]. Their results identified four distinct regimes predicting
the pace of substitution of technology.

2.1.4. Entrepreneurial Ecosystem

The fourth stream focuses on the entrepreneurial ecosystem by taking the perspective of ecosystem
entrepreneurs, investigating how entrepreneurs should align their vision, goals, and structures with
those of the ecosystem leader [24]. This stream of research provides a different perspective from that
focusing on a leading firm (keystone firm, focal firm, platform leader, or hub firm) to look at the context
(entrepreneurial ecosystem) in which the new startup is embedded. Previous research has focused
on how entrepreneurs may go through a self-regulatory process to successfully manage challenges in
an ecosystem [24].

2.1.5. Research Gap Identification

Based on our literature review, research on business ecosystems has prospered since Moore
introduced the concept [1]. Scholars have tried to link different bodies of knowledge to contribute to
business ecosystem research such as operations management [25], entrepreneurship [24], strategy [26],
and innovation [20]. Most research has focused on how leading firms should manage their ecosystems
(including platform and innovation ecosystems) to retain their competitive advantage or, on the
other hand, how startup companies should deal with the ecosystems in which they are embedded
(entrepreneurial ecosystems). Current research is focusing on how firms could benefit from the
ecosystem network to achieve better business performance. However, little research has focused on
how the leading firms or startups might manipulate the ecosystems in which they are embedded
to achieve both environmental and business goals at the same time. Hence, this research aims to
answer this question, taking an alternative perspective on firms and their ecosystems as a sustainability
mechanism. In order to answer this question, the literature on the circular economy was also reviewed,
with the purpose of linking business ecosystems and the circular economy.
Furthermore, in terms of the research context, we also found that most empirical research
to date has focused on industries such as information technology [20,25,27,28] and automobile
manufacturing [1,29]. Little research has focused on less profitable industries such as the recycling
business. Hence, this research is also aimed at covering this neglected area. Finally, although some
empirical research has been conducted in the Asian context [25,29], mainly on the semiconductor
industry, little of it has emphasized how the Asian context influences the ecosystem in which the firms
are embedded. Hence, with this research we would also like to put more focus on that aspect.

2.2. Circular Economy

The central concept of a circular economy is the ‘valuation of materials within a closed-looped
system with the aim to allow for natural resource use while reducing pollution or avoiding resource
constraints and sustaining economic growth’ [30] (p. 825). The circular economy aims to provide a
better alternative to the ‘take, make and dispose’ [31] dominant economic development model, leading
to more sustainable development and a symbiotic ecosystem. Sustainable development requires
balanced and simultaneous consideration of the economic, environmental, technological, industrial,
and social aspects of a given economy or sector. The negative effects of the dominant economic
development model threaten the stability of economies and the integrity of natural ecosystems that are
essential for humanity’s survival [32].
Sustainability 2017, 9, 1068 5 of 15

Research on the circular economy has focused on three streams [30]. The first stream is policy
instruments and approaches. Research in this stream covers the topics of eco-industrial parks,
eco-industrial networks, and industrial symbiosis. It views the circular economy within a regional
setting, taking a government perspective to analyze how different countries have inspired and
supported eco-industrial parks. Governments are also actively moving towards a recycling economy
by converting waste into renewable resources through the circular economy’s business model.
The second stream has focused on the value chain, material flows, and products. It looks at
how materials are managed or reused through the value chain, covering wood and paper, plastics,
metals, phosphorus and other chemicals, water, etc. It has gradually increased its scope from narrow
waste to extensive economic orientation control, especially in the closed stages of the raw material
cycle, including production, distribution, consumption, and other steps [33]. The aim is to restore and
stabilize waste in such a way as to allow the supply chain to reuse raw materials repeatedly, creating a
circular economy. The three criteria of reduction, reuse, and recycle have been applied in materials
and energy areas [34]. National governments, industry, and other mainstream areas focus on product
design trends, the supply chain, the manufacturing process, and usage for sustainable development.
The third stream looks at technological, organizational, and social innovation. This stream has
sought to link circular economy research to business-oriented research. As most research on the circular
economy is technical and economical, this has led to a lack of stakeholder involvement and a lack of
shared vision [30]. The existing research has put emphasis on the interaction of process and planning
design [10,33]. The structure and interaction of process and planning that exist in the communication
system model and frame the actions of firms, highlighting the importance of the interrelationships
between multiple organizations and how this interaction could represent sustainable product-service
solutions as an important source of competitive advantage and the circular economy. The way that
circular economy agents interact is drawing more attention, offering a great opportunity to link the
circular economy to the business ecosystem literature.
Our review has illustrated that research on the circular economy has gradually expanded from
government policy to the management of the value chain and material flows and now to a more
business-oriented perspective. On the other hand, in the business ecosystem literature, research
has mainly focused on the network of various stakeholders and how it achieves economic value.
The two bodies of knowledge, initially unrelated, seem to have coincided as both have started to
expand. We believe this offers a good opportunity to investigate a new research area of how different
stakeholders could work in a more systematic way to achieve both environmental and business goals
at the same time, thereby ensuring overall sustainability.

3. Materials and Methods

3.1. Research Setting

We adopted a longitudinal case study approach [35] in this research by applying the evolutionary
stages of a business ecosystem [1] to observe how the sampled firm built up its business ecosystem in
the Asian context. This research sought to identify how the firm had developed over time to build up
its social networks and how these networks help the leading firm (i.e., the sampled firm) to govern its
business ecosystems.
We selected the glass recycling industry as the research target for two reasons. First, Taiwan is
famous for its high-technology industry, and every year the industrial glass waste (e.g., LCD) and
household glass waste consists of around 223 thousand tons in total [12,13]. Industrial glass waste such
as plate glass like LCD can seriously pollute the environment unless treated properly [36]. Second,
of all the recycling industries, the glass recycling industry’s profit margin is among the lowest. As glass
is 100% recyclable and can be recycled repeatedly with no loss in purity or quality, investigating
the glass recycling industry would be beneficial since its development should be representative of
the development of the recycling business as a whole. The glass recycling rate in Taiwan is around
Sustainability 2017, 9, 1068 6 of 15

92.1% [37], while the overall recycling rate is 55% [11], placing Taiwan’s recycling rates among the
Sustainability
highest 2017, 9, 1068
worldwide. 6 of 15
Thus, Taiwan represents the ‘best practice’ of the glass recycling industry globally.
The results could be beneficial for other glass recycling ecosystems wishing to emulate Taiwan’s
industry in Taiwan will contribute greatly to the knowledge of both business ecosystems and the
success. Hence, we believe that studying the leading firm in the glass recycling industry in Taiwan
circular economy.
will contribute greatly to the knowledge of both business ecosystems and the circular economy.
We adopted a single case study approach, focused on the leading firm in Taiwan’s glass
We adopted a single case study approach, focused on the leading firm in Taiwan’s glass recycling
recycling industry. Whether single or multiple cases generate better theory has been rigorously
industry. Whether single or multiple cases generate better theory has been rigorously discussed.
discussed. Eisenhardt argued that multiple cases were a powerful means of creating theory because
Eisenhardt argued that multiple cases were a powerful means of creating theory because they permit
they permit replication and extension [38]. However, Dyer and Wilkins claimed that a single case
replication and extension [38]. However, Dyer and Wilkins claimed that a single case study was able to
study was able to capture a more in-depth and richer background [39]. The ‘optimal’ number of
capture a more in-depth and richer background [39]. The ‘optimal’ number of cases is still a question
cases is still a question of academic debate and strongly ‘depends on how much is known and how
of academic debate and strongly ‘depends on how much is known and how much new information is
much new information is likely to be learned from incremental cases’ [38] (p. 622).
likely to be learned from incremental cases’ [38] (p. 622).
We selected the leading glass recycling company in Taiwan, Spring Pool Glass, as our main
We selected the leading glass recycling company in Taiwan, Spring Pool Glass, as our main case.
case. Spring Pool Glass has a market share of over 70% in Taiwan’s glass recycling industry
Spring Pool Glass has a market share of over 70% in Taiwan’s glass recycling industry (including
(including both industrial and household recycling). As of January 2017, it had 120 employees, five
both industrial and household recycling). As of January 2017, it had 120 employees, five factories,
factories, 30 logistic cars (capacity per car above 35 tons), and 30 points of sale (for recycled glass
30 logistic cars (capacity per car above 35 tons), and 30 points of sale (for recycled glass artwork).
artwork). Its main business covers glass recycling, an industrial tourism factory (a working factory
Its main business covers glass recycling, an industrial tourism factory (a working factory that tourists
that tourists can visit to observe the work carried out and purchase artwork), recycled-glass building
can visit to observe the work carried out and purchase artwork), recycled-glass building materials,
materials, and recycled artistic glass (use in works of art). The business coverage of Spring Pool
and recycled artistic glass (use in works of art). The business coverage of Spring Pool Glass in the
Glass in the circular economy is presented in Figure 1.
circular economy is presented in Figure 1.

Customer

SEG Tourism Glass Recycle Recycle

Factory Product
System
(Spring Pool Electrical
Handmade Glass)

Spring Pool Circular

Taibao Factory Material (Spring Pool Recycle)
(Spring Pool Glass Bean)

Yi Sing Factory
(Spring Pool LCD Recycle and Acoustic and
Heat Insulation Block)

Figure 1. Spring Pool Glass in a circular economy.

Figure 1. Spring Pool Glass in a circular economy.
3.2. Data Collection and Analysis
3.2. Data Collection and Analysis
To investigate the mechanisms of how Spring Pool Glass governs its ecosystem and how it
To investigate
has interacted the mechanisms
with other stakeholders ofover
howtime,
Spring wePool Glassthe
adopted governs its ecosystem
grounded and how
theory method in it has
this
interacted with other stakeholders over time, we adopted the grounded theory
research [35,40]. We started by identifying the key events so as to match them with the evolutionary method in this
research
stages [35,40].
of the Weecosystem
business started by[1].
identifying
Next, wethe key events
followed so as to match
the evolutionary them
stages to with the Spring
see how evolutionary
Pool
stages of the business ecosystem [1]. Next, we followed the evolutionary
Glass managed its social networks and how these relationships had contributed to its growth.stages to see how Spring
Pool Glass
The main managed its social
data collection networks
methods and
used in how these relationships
this research had contributed
were semi-structured to its archival
interviews, growth.
The direct
data, and main observation
data collection methods
(several used inEach
site visits). this interview
research were
lastedsemi-structured
from one to three interviews,
hours,
archival data, and direct observation (several site visits). Each interview lasted
and all were recorded and transcribed for analysis (Appendix A). We obtained data on aspects such from one to three
hours, and all were recorded and transcribed for analysis (Appendix A). We obtained data on
aspects such as the organization’s history, business models, public reports in the press, campaigns,
and future development plans and also from their website and Facebook fan pages. Then, the data
were analyzed through a coding process consisting of three steps. First, the text of each individual
Sustainability 2017, 9, 1068 7 of 15

Sustainability 2017, 9, 1068 7 of 15

as the organization’s history, business models, public reports in the press, campaigns, and future
development
interview wasplans and also
screened from
to get antheir website
overall and Facebook
understanding fan conversation.
of the pages. Then, the dataeach
Next, wereinterview
analyzed
throughwas
record a coding
dividedprocess consisting
into different of three steps.
categories, and theFirst, the text of each
relationships individual
between interviewwere
the categories was
screened to
analyzed in get an overall
order to clarifyunderstanding of theofconversation.
the interactions Next, each and
different stakeholders interview record was divided
the development of the
glass recycling
into different ecosystem.
categories, andInthetherelationships
third step, between
these broad categorieswere
the categories wereanalyzed
subdivided intotosmaller
in order clarify
categories, and findings
the interactions of differentthatstakeholders
went beyond and the
theoriginal research
development of objectives were separated
the glass recycling ecosystem. out.InThis
the
process refined
third step, thesethe specific
broad researchwere
categories objectives to be explored
subdivided into smallerin the sample firm.
categories, and A comparison
findings was
that went
made
beyond across the multiple
the original research interviews,
objectives helping the author
were separated out. to
Thisgain a better
process understanding
refined of how
the specific research
Spring PooltoGlass
objectives governed
be explored its ecosystem.
in the sample firm. Potential biases orwas
A comparison errors
madewere alsothe
across identified
multiple atinterviews,
this stage,
based
helpingonthe any conflicts
author or ainconsistencies
to gain better understandingbetween of different
how Spring respondents. At the same
Pool Glass governed time, the
its ecosystem.
secondary data were
Potential biases also were
or errors categorized and analyzed.
also identified This supported
at this stage, based on any the conflicts
main results and protects
or inconsistencies
against
between bias.
different respondents. At the same time, the secondary data were also categorized and
analyzed. This supported the main results and protects against bias.
4. Case Study
4. Case Study
This section will present the case based on the lifecycle of the business ecosystem to
This section
demonstrate howwill present
Spring Poolthe casecaptures
Glass based onvalue the lifecycle of theup
and builds business
its socialecosystem
networks. to This
demonstrate
section
howalso
will Spring Pool the
present Glass captures
story valuePool
of Spring and Glass
buildsfrom up its social networks.
a different perspective.This In
section will and
the birth also
present thestages,
expansion story ofwe Spring Pool Glass
will focus on howfromthe a different perspective.
entrepreneur built upIn the
the firm’s
birth and expansion
social network stages,
and
we will focus
captured valueonwithin
how the theentrepreneur
ecosystem. In built
theup the firm’sstage,
leadership socialwe network and captured
will focus on how the value within
company
the ecosystem.
governs In the The
its ecosystem. leadership stage, we
development will focus
of Spring Poolon how ecosystem
Glass’s the company governs its
is presented ecosystem.
in Figure 2.
The development of Spring Pool Glass’s ecosystem is presented in Figure 2.

Market Share
Birt Expansion Leadership

70%
LCD Waste
Glass

60%
AH (Acoustic
and Heat)
Insulation
Event: SEG Block
50% Market Financial Tourism
Share Crisis Factory

40%
Spring Pool Glass
Factory

20% Event:
Offshoring
Manufacturing
Trend Spring Pool Glass
Industrial Co., Ltd.
Event: Oil
Crisis

1961 1972 1978 1981 1991 1994 2002 2008 2013 2017

Figure 2.
Figure Developmentof
2. Development ofSpring
Spring Pool
Pool Glass’s
Glass’s ecosystem.
ecosystem.

4.1. Birth
4.1. BirthStage:
Stage:1972–1980
1972–1980
Before Mr.
Before Mr.WuWu started Spring
started Pool Pool
Spring Glass Glass
in 1972,inhe1972,
had been
he working
had been in the glass manufacturing
working in the glass
industry since his
manufacturing graduation
industry from
since his elementary
graduation school
from in 1961. school
elementary Initially
inhe joined
1961. the Hsinchu
Initially he joinedGlass
the
Factory to
Hsinchu obtain
Glass basic knowledge
Factory of glass
to obtain basic manufacturing.
knowledge of glass Two years later, he
manufacturing. Twowas transferred
years later, hetowas
the
China Glass Industrial Research Institute, a research institute sponsored by the Hsinchu
transferred to the China Glass Industrial Research Institute, a research institute sponsored by the Glass Factory,
to learn how
Hsinchu GlasstoFactory,
melt glass, mix colors,
to learn how toandmeltmake
glass,glass
mix artwork. From
colors, and make1969 to 1972,
glass Mr. From
artwork. Wu served in
1969 to
the military
1972, Mr. Wu soserved
as to fulfill
in thethemilitary
mandatoryso asmilitary
to fulfillservice required by
the mandatory the Taiwan
military government.
service required by the
Taiwan government.
After Mr. Wu resigned from the military in 1972, he decided to start his own business in the
glass recycling industry, sensing its potential. At that time, the industry was dominated by small
Sustainability 2017, 9, 1068 8 of 15

After Mr. Wu resigned from the military in 1972, he decided to start his own business in the glass
recycling industry, sensing its potential. At that time, the industry was dominated by small recyclers.
Recyclers would gather waste glass from households (the recycler did not have to pay for this) or
factories (over a certain amount of waste glass, these recyclers did have to pay) and sell it to glass
manufacturers as an input. Mr. Wu started his business as a self-employed individual, carrying waste
glass, mainly cathode ray tube (CRT) monitors and waste glass bottles, with his own scooter and
crushing the waste glass in his own backyard. Due to his previous experience and contacts in the glass
industry, his initial sales strategy was to provide high-quality recycled glass to small factories so as to
build a good reputation.
Next, to enlarge his glass supply, Mr. Wu also started to collect waste glass from other counties
and bought a second-hand truck to increase his capacity. However, local factions from other counties
were a big challenge to Mr. Wu’s attempts to collect waste glass. He later resolved this problem by
using the contacts he had made during his military service and a former colleague from the Hsinchu
Glass Factory.
In 1975, when the ‘Taiwan Economic Miracle’ started to boom, the market for waste glass was
seen as having a bright future due to the oil crisis. Hence, Mr. Wu bought his first land to use to stack
waste glass (2000 m2 ). During the same period, Mr. Wu also owned his own fleet of trucks, helping
him to secure his waste glass supply. However, in 1978, the glass industry in Taiwan went through a
depression due to the trend of offshoring manufacturing. Glass factories were not buying waste glass
due to the shortage of demand. In order to stack his oversupply of waste glass, Mr. Wu was forced to
buy another plot of land in 1978 (this time 10,000 m2 in size). However, this investment later became a
great advantage for his company, while there was a high entry barrier for latecomers to the industry.

4.2. Expansion Stage: 1981–2008

In 1981, Mr. Wu established Spring Pool Glass Industrial Co., Ltd. (Hsinchu, Taiwan), to transform
his business from a home-run operation to a more structured setting. The company also introduced
new automatic machines to classify and smash the waste glass, dramatically increasing its capacity to
deal with waste glass from 1 to 50 tons per hour. Overall, in this stage, Spring Pool Glass enlarged
its ecosystem on both the demand and the supply side. On the supply side, due to its long-term
collaboration with waste glass suppliers, mainly family-based, Spring Pool Glass started to dominate
the glass recycling business. On the demand side, due to the increase in its capabilities, Spring Pool
Glass was also able to sell these recycled materials (glass) to large factories for manufacturing use.
At the time, recycled glass was classified into three different levels according to its quality. The first
class was sent to glass factories for manufacturing, the second class was used in ceramics, and the
third as a material in cement making.
However, by 1991, nearly 90% of the glass manufacturing industry had migrated to Mainland
China or Southeast Asia. Most of Spring Pool Glass’s competitors (in the glass recycling business)
had left the Taiwanese market, and many of those that stayed had changed their commercial land-use
permits and hence left the glass recycling business. This trend provided Spring Pool Glass with
an opportunity to expand its market share. However, at the same time, due to the lack of demand
(the migration of glass manufacturing firms), Spring Pool Glass started to invest in research and
development (R&D) to search for new channels that might consume its recycled glass. In 1999, Spring
Pool Glass invented new technology that remakes recycled glass into an eco-friendly building material,
the ‘glass bean’, which later become a high-value-added product. Moreover, at this stage, Spring Pool
Glass also gained the ability to analyze the composition of its waste glass on a more scientific basis,
which increased its capability for dealing with waste glass.
During this time, the electronics industry started to prosper in Taiwan. A lot of industrial glass
waste was produced such as LCD, flat glass, fiber glass, container glass, and sodium silicate glass.
Most of the glass manufacturing firms lacked the knowledge to deal with this glass waste as the
composition was different from the glass recycled previously. In order to consume this industrial waste
Sustainability 2017, 9, 1068 9 of 15

glass from the electronics industry, Spring Pool Glass invested more in R&D, seeking opportunities to
transform such glass into standalone products. In 2002, Spring Pool Glass cooperated with Company
A, the largest manufacturer of LCD glass, ceramics, and related materials, primarily for industrial and
scientific applications. Spring Pool Glass purchased Company A’s waste LCD glass and transformed
it for use in ceramics and to make cement aggregate. Spring Pool Glass also began to export some
recycled glass that was not suitable for Taiwan’s manufacturers to its foreign partners.
In 1997, the Taiwanese government implemented a new policy, the ‘four-in-one resource recycling
project’, seeking to build a complete recycling system in Taiwan. This act brought Spring Pool Glass
both advantages and disadvantages. The main advantage was that, due to the government promotion,
the overall recycling rate increased. With the involvement of cleaning teams and recyclers, Spring
Pool Glass is saved the effort of collecting waste glass with its own fleet of trucks. However, the main
disadvantage stemmed from the resulting transparency of the recycling market. All waste glass
collected by the cleaning team and recyclers now had a ‘price’ and competitors had to bid to obtain it
from the government. To win the bid, Spring Pool Glass had to pay a slightly higher price than it had
done previously. Moreover, one of Spring Pool Glass’s strengths, its stakeholder network (for waste
glass collection), was limited after the launch of this project.
By the end of the expansion stage, Spring Pool Glass was processing more than 50% of all glass
recycling in Taiwan, making it a leading firm in the glass recycling ecosystem. Two main factors
enabled Spring Pool Glass to maintain its advantage. First, it had achieved an economic scale that
produced a profit. As glass recycling is a very low-margin business, firms need to achieve a certain
scale in order to generate a profit. Second, its competitors faced high barriers to entry. Spring Pool
Glass had continually aligned its recycling technology with changes in the country’s development.
As glass products changed over time (e.g., from household glass waste to LCD waste), Spring Pool
Glass was always learning and researching how to recycle the latest waste glass. Any new firm would
have to gain this knowledge in order to compete.

4.3. Leadership Stage: 2008 to Present

In 2008, Spring Pool Glass established a brand for its own recycled-glass artwork called SEG
(Spring Pool Electrical Handmade Glass). It recruited many senior glass artisans to craft handmade art
pieces in its industrial tourism site in Hsinchu. It also established 11 selling points for these recycled
art pieces across Taiwan. The purpose was to promote its own branding and inherit Hsinchu City’s
glass culture and in turn promote its corporate social responsibility (CSR) and make citizens aware of
the importance of recycling. Moreover, in 2013, through its own R&D, Spring Pool Glass developed
‘an insulation block’ from recycled glass, which has excellent soundproofing and heat prevention
qualities. This new product has since been used as a building material in the construction industry,
bringing higher margins than before.
Since Spring Pool Glass is the leading firm in the glass-recycling ecosystem in Taiwan, there are
mechanisms that govern its ecosystem, involving different stakeholders. From the supply side, Spring
Pool Glass collects waste glass from households and industrial manufacturing. The household waste
glass comes from two channels: first, the cleaning team and recyclers in collaboration with the
government (the four-in-one resource recycling project), and second its long-term collaboration with
individual recyclers. In the case of industrial glass waste, Spring Pool Glass collects from LCD factories
and glass manufacturers. The main reasons these big factories are willing to provide waste glass
to Spring Pool Glass are (1) it pays an adequate price, (2) the large amount of land and technology
required to deal with industrial glass waste, and (3) Spring Pool Glass’s long-standing good reputation
and its CSR campaign promoted through its industrial tourism factory.
From the demand side, Spring Pool Glass is providing recycled materials to manufacturing firms
in different industries such as ceramics, asphalt, cement, and glass manufacturing. Glass manufacturers
have great incentives to buy recycled materials from Spring Pool Glass due to the subsidies they can
receive by participating in the four-in-one resource recycling project. At the same time, Spring Pool
Sustainability 2017, 9, 1068 10 of 15

Glass is also selling products directly to end customers. It produces three main products from its
Sustainability 2017, 9, 1068 10 of 15
recycled glass: (1) artistic glass manufactured in its industrial tourism factory, (2) ‘glass beans’ used for
paving‘glass
roads and walls,
beans’ used for and (3) ‘insulation
paving roads andblocks’ used(3)as‘insulation
walls, and a construction material.
blocks’ used as a construction
Inmaterial.
addition to its supply and demand advantages, Spring Pool Glass is the only company to have
joined commercial
In addition associations
to its supply forandboth the glass
demand manufacturing
advantages, Spring Pooland Glass
glass isrecycling
the only industries
company tosuch
as the have
Taiwanjoined commercial
Glass Commercial associations for both Hsinchu
Association, the glass manufacturing
Glass Commercial and glass recycling industries
Association, and Taiwan
suchRecycling
Resource as the Taiwan Glass Commercial
Industries Association. Association, Hsinchu Glass
This has enlarged SpringCommercial
Pool Glass’sAssociation, and
social network,
Taiwan Resource Recycling Industries Association.
enabling it to capture value more quickly than its competitors. This has enlarged Spring Pool Glass’s social
network, enabling it to capture value more quickly than its competitors.
In sum, as of 2017, Spring Pool Glass dealt with 70% of the recycled glass in Taiwan. 70% of its
In sum, as of 2017, Spring Pool Glass dealt with 70% of the recycled glass in Taiwan. 70% of its
revenue comes from selling recycled materials for reuse, mainly in glass manufacturing, ceramics,
revenue comes from selling recycled materials for reuse, mainly in glass manufacturing, ceramics,
asphalt, and and
asphalt, cement.cement. 20%20%ofofits
its revenue comesfrom
revenue comes from its sales
its sales of building
of building materials,
materials, namely thenamely
glass the
glass bean
bean and the insulation block. 10% of its revenue comes from selling recycled-glass artwork.artwork.
and the insulation block. 10% of its revenue comes from selling recycled-glass The
The corporate
corporateimageimageof ofSpring
Spring Pool
Pool Glass is that
Glass is thatofofproviding
providinghigh-quality
high-quality recycled
recycled glass
glass at aat a reasonable
reasonable
price. price.
The Thesocial network
social networkofofits its founder,
founder, Mr.Mr.Wu, Wu,andand the company’s
the company’s abilityability to capture
to capture value have value
enabled itit to
have enabled tobecome
becomeand andremain
remain thethe
leading firmfirm
leading in theinglass-recycling ecosystem
the glass-recycling in Taiwan.
ecosystem The
in Taiwan.
recyclingecosystem
The recycling ecosystem of of Spring
SpringPool PoolGlass
Glass is presented
is presentedin Figure 3. 3.
in Figure

Commercial
Associations
Regional
Standalone
Commercial Commercial Products
Associations in Glass Associations
Manufacturing
Handcraft
Commercial Art Piece
Household Associations
Waste Glass in Recycling
Glass Bean

Spring Pool
Recycling Insulation
Station Block

Household
Recycling
System Spring Pool Glass
Cleaning
Squadron Recycled Raw
Materials

Recycler
Sales Abroad
(Raw Materials)
Glass Manufacturer
(e.g., Taiwan Glass)
Shops Raw Materials
(e.g., Restaurants)

LCD Manufacturer
(e.g., Corning)
Industrial
Waste Glass

Figure 3. Spring Pool Glass recycling ecosystem in Taiwan.

Figure 3. Spring Pool Glass recycling ecosystem in Taiwan.

5. Discussion
5. Discussion
Our research illustrates
Our research thatthat
illustrates continuous
continuousvalue
value capture is the
capture is the key
keytotogoverning
governing a sustainable
a sustainable
business ecosystem.
business Through
ecosystem. Throughthethe
case analysis
case analysisofofSpring
Spring Pool Glass,we
Pool Glass, weidentified
identified
fivefive elements
elements of of
continuous
continuous valuevalue capture
capture in the
in the glass
glass recycling
recycling business.
business.

5.1. Continuous
5.1. Continuous ValueValue Capture
Capture to Enter
to Enter NewNew Markets
Markets
Continuous
Continuous value value capture
capture by by
thethe leadingfirm
leading firmin
in this
this circular
circular economy
economyis is
critical for for
critical several
several
reasons. First, the demand and supply of the waste glass industry is unbalanced most of the time.
reasons. First, the demand and supply of the waste glass industry is unbalanced most of the time.
Spring Pool Glass needs to search continually for new uses for its recycled materials, and for new
Sustainability 2017, 9, 1068 11 of 15

uses for different sources of waste glass. For example, recycled LCD glass is turned into insulation
blocks, glass products are turned into glass beans, and other recycled materials that Taiwan’s market
cannot consume are exported. These value-capturing activities bring innovative ways of transforming
the recycled glass into new products, which brings high value/margins for the company. Second,
through the value-capturing activity, the leading firm will play the lead role in joining with other
ecosystems to create new business models. For example, Spring Pool Glass has joined the electronics
manufacturing ecosystem to recycle its waste LCD glass. Also, by remodeling waste glass, Spring Pool
Glass participates in the artwork ecosystem, selling its recycled art pieces. In the recycling business (as
a part of the circular economy), continuous value capture, as a mechanism for linking the ecosystem to
other ecosystems to create higher margins, is very important.
Balancing and maintaining the proper margins of different stakeholders to retain the overall
health of the ecosystem is also critical [41]. As the margins in the glass recycling business in Taiwan
are very low, it is critical that the leading firm supports some of the stakeholders such as individual
recyclers and cleaning teams so as to secure the ecosystem.

5.2. Importance of Stakeholder Networks for Enlarging the Business Ecosystem

We have also observed the impact of the entrepreneur’s personal network on the value network,
which in turn enlarges its business ecosystem. This echoes the view of Shi and Shi [7]. The business
story of the founder of Spring Pool Glass shows that his personal network has impacted the business
throughout the different lifecycles of the business ecosystem. In the birth stage, Mr. Wu’s experience
in the Hsinchu Glass Factory and his mandatory military service supported his business expansion
by helping him to deal with glass manufacturers and local factions. In the expansion stage, due to
the company’s long-term collaboration with individual restaurants and recyclers, the stable supply
of waste glass supported its continued growth. In the leadership stage, its cumulated stakeholder
network, such as the trust built up with different stakeholders, connections to different companies
through commercial associations, and its relationship with the local government, has helped Spring
Pool Glass to govern the business ecosystem.
The stakeholder network has also influenced the profit making of Spring Pool Glass. As the
supply of waste glass has become market-oriented, for example requiring the purchase of waste glass
from LCD factories, glass manufacturing factories, and the government’s cleaning team, its good
relationships within its stakeholder network has enabled Spring Pool Glass to continue collecting
waste glass for free with its own fleet of trucks.

5.3. Brand Image and CSR

In the recycling industry, brand image and CSR activities are observed to bring positive benefits
to firms. This is especially important now that the concept of sustainability has become a trend in
the Asian countries. Spring Pool Glass has started to promote its brand and CSR since becoming the
leading firm in the ecosystem. Its industrial tourism site has become a very important marketing
channel, giving it impact and recognition among the Taiwanese citizens, which has also strengthened
its social network. The art pieces crafted at the industrial tourism site are also being sold in several
stores across Taiwan, emphasizing its efforts to turn waste glass into art. Moreover, Spring Pool Glass
has also cooperated with universities, attending several green building competitions and providing its
recycled building materials. These promotions have positioned Spring Pool Glass as not only a glass
recycling company, but a pioneer in the recycling business, looking to fulfill its social responsibility.
Moreover, the overall image and CSR of Spring Pool Glass have also influenced the willingness
of foreign companies to collaborate with it. For example, Company A is willing to provide its waste
LCD glass to Spring Pool Glass in part because of the latter’s overall good image. The story of Spring
Pool Glass has illustrated that, even in the circular economy, brand promotion and CSR are important
mechanisms for maintaining relationships with stakeholders as the trend of sustainability is influencing
Asian countries.
Sustainability 2017, 9, 1068 12 of 15

5.4. Company Capabilities and R&D in the Recycling Process

The capabilities a company requires in order to perform the recycling process are critical for the
leading firm. The core capability of Spring Pool Glass is that it has been able to maintain low costs and
high quality during the recycling process, mainly because it has its own fleet of trucks and because of
the efficiency of its factory processing. In addition, the land that Spring Pool Glass has bought has
allowed it to provide land piling to subsidiary companies and factories. This has helped the entire
glass cluster to perform better, controlling quality and delivery dates. In terms of innovation and
learning ability, Spring Pool Glass cooperates with institutes, other companies, and universities, as well
as engaging in continuous R&D to support value-capturing activities. Continuous R&D is also very
important for enhancing its own capabilities. For example, Spring Pool Glass has developed its own
automatic glass-crushing machine, the ability to conduct composition analysis when recycling glass,
the ‘insulation block’ generated from recycled LCD and glass, and the ‘glass bean’ generated from
recycled glass. Overall, the capabilities of the leading firm are very important in the circular economy.
Spring Pool Glass’s main capabilities are the efficiency of its factory processing, its fleet of trucks,
its R&D, and its land.

5.5. Reacting to Government Policy regarding the Circular Economy

Government institutions will also affect how leading firms govern their ecosystems. In Taiwan,
the government’s four-in-one resource recycling project had an impact on the glass recycling ecosystem
by changing the rules within it. It led to citizens in the community, a cleaning squadron, recyclers,
and a recycling fund combining to ensure garbage was recycled and reused. This mechanism also
ensured that stakeholders in the system gained a reasonable profit.
During the policy shaping process, Spring Pool Glass was highly involved as a keystone firm
representing the glass recycling industry. From the government’s point of view, one of the key elements
required in order for the four-in-one resource recycling project to succeed was recycling logistics and
processing. As these are the key advantages of Spring Pool Glass (it has its own fleet of trucks, strong
capabilities in the recycling process, and various production lines), its commitment to and participation
in this project is very important.
The four-in-one resource recycling project also imposed two major changes on the way Spring Pool
Glass governed its ecosystem. First, due to the government’s efforts to collect household waste, Spring
Pool Glass was able to cut down on its own efforts in this regard. However, Spring Pool Glass now
had to bid for the government-collected waste glass. This change decreased its previous advantage
of having close connections with households and recyclers (social network), but at the same time
increased its supply of waste glass. It also brought about another challenge for Spring Pool Glass of
how it would consume the increased volume of recycled waste glass. Second, the government’s action
provided incentives for glass manufacturers such as Taiwan Glass to purchase recycled glass as their
input materials. Glass manufacturers were forced to place a deposit in a government fund, which could
be redeemed if the glass manufacturer used recycled glass as its input. In sum, the government’s
policy has changed the mechanisms by which the leading firm trades with different stakeholders.

6. Conclusions
This research has identified a set of mechanisms by which the leading glass-recycling firm in
Taiwan governs its ecosystem. First, continuous value capture is important for the leading firm as the
demand and supply of waste glass are mostly unbalanced. Second, the entrepreneur’s social network
has been found to have influenced his business’s development throughout its ecosystem’s lifecycle.
Third, brand image and CSR have influenced the company’s relationships with its stakeholders, acting
as an invisible force that binds their connections. Moreover, the company’s capabilities in the recycling
process determine its costs and quality, which are critical factors to surviving in the glass recycling
Sustainability 2017, 9, 1068 13 of 15

industry (due to its low margins). Finally, we have also observed that government policy has had
a huge impact in reframing the relationships between the various stakeholders.
Theoretically and practically, this research makes several contributions. First, to our
understanding, we believe we are breaking new ground in seeking to link the concepts of the business
ecosystem and the circular economy, which we believe will be an important research stream in the
future, embracing economic and environmental value simultaneously. Second, this research has
provided evidence from a different research context than the prior literature. Most research on
business ecosystems has focused on (high-margin, profit-driven) industries such as information and
communication technology, automobiles, and retail. This research provides a different perspective,
investigating how a leading firm governs its ecosystem under low-margin conditions. Finally, as
Taiwan is also a pioneer of the circular economy in Asia, this research provides an informative case
study illustrating how the leading firm in the recycling ecosystem has adjusted to (1) a new government
policy and (2) an increase in silicon-related waste due to regional development. These lessons could
also be valuable for the future development of the Southeast Asian countries.
In spite of the rigorous research methods, the case mainly concerns the glass recycling industry
alone, which will limit its generalizability to other industries. Future research could be conducted in
other recycling industries, as different recycling ecosystems will likely have their own characteristics
(related to the recycled materials). We also suggest that future research should seek further
opportunities for linking business ecosystem and circular economy research.

Acknowledgments: The authors gratefully acknowledge Chun-Tzu Wu and Ting-An Wu from Spring Pool
Glass who supported this research by providing access to their company, as well as sharing their experience
and knowledge.
Author Contributions: Ying-Che Hsieh designed this study, carried out the empirical work, wrote the literature
review, and drafted the manuscript. Kuo-Yi Lin participated in the empirical studies and helped to draft the
literature review. Chao Lu and Ke Rong participated in the design of the study and the data analysis. All authors
read and approved the final manuscript.
Conflicts of Interest: The authors declare no conflict of interest.

Appendix A

Table A1. Glass recycling ecosystem interview list.

Company Location Types of Business Interviewee’s Position Method Duration

Spring Pool Glass Hsinchu Leading firm Chairman/founder Interview 4h
Spring Pool Glass Hsinchu Leading firm CEO Site visit, interview 3h
Spring Pool Glass Hsinchu Leading firm Factory director Site visit, interview 3h
Spring Pool Glass Hsinchu Leading firm Two senior glass artists Site visit, interview 2h
Spring Pool Glass Hsinchu Leading firm Specialist Interview 3h
Spring Pool Glass Hsinchu Leading firm Specialist Interview 3h
Spring Pool Glass Hsinchu Leading firm Specialist Interview 3h
Spring Pool Glass Taichung Leading firm Specialist Phone call 1h
Spring Pool Glass Miaoli Leading firm Specialist Interview 2h
Company A Hsinchu Waste glass supplier Director Interview 2h
Company A Hsinchu Waste glass supplier Director Interview 2h
Company A Hsinchu Waste glass supplier Director Interview 2h

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