Fashion / textile SME’s (small to medium enterprises) are currently adding value to previously discarded textile waste by applying their practical skills, knowledge and expertise to rework and reuse. As a result, sustainable design strategies are beginning to emerge such as – zero waste pattern cutting, design for disassembly and upcycling. However, the scope for redesign will always influenced by the first iteration. We really need to consider the complete lifecycle at the front end of the innovation process to optimise lifecycles and reduce post consumer waste. Further work is also required to inspire and educate the next generation of designers to the immense creative potential of reuse, and help the industry to understand its viability, scalability and role in the future (DeCastro, 2014).

At the same time, fashion systems are moving beyond material innovation towards a circular economy to support systemic change for fashion globally. As a result, new business models are beginning to emerge, moving beyond GDP towards different kinds of metrics – which consider people, value systems and behaviour change. This paper explores how the principals of the circular economy and the four pillars of sustainability (environmental, social, economic and human capital) might support business model innovation within fashion and textiles. To achieve this, an exploratory canvas tools for SME’s titled ‘Circular by Design’ was devised to encourage new business ideas and innovation. The canvas tool places strategic design at the centre and supports an assessment of the lifecycle of each asset by mapping the different stakeholders, materials and processes to prototype and conceptualise closed loop systems.

‘Circular by Design’ was presented at the Scottish Textiles Symposium (2014) where three fashion / textile SME’s were selected to participate within an interview series. According to Scottish Enterprise, this sector of the business community have highlighted there is a lack of resources for R&D innovation (Scottish Enterprise, 2013). The ‘Circular by Design’ model was tested as an innovation method, for SME’s to consider new design approaches and business models. The aim was to expand upon the capability of SME’s to embrace closed loop systems by using the tool to identify the most appropriate sustainable design strategies for their business, and in addition supporting them to map out future material ecologies.