The four things that matter most when scaling circular economy innovations in LMICs
A blog by Sammy Fookes, a Frontier Tech Hub Coach
Image credit: iStock
Scaling Circular Economy Innovation in LMICs: What We’ve Learned So Far
The circular economy is gathering global momentum and has the potential to support countries achieve the SDGS — all while using significantly fewer natural resources. But for promising ideas to have real-world impact they need to scale.
Across the Frontier Tech Hub we have been testing a diverse range of circular economy innovations, turning agricultural waste into high-purity silica in Malaysia, and piloting bioplastic production in Nepal. Along the way, we’ve seen the immense potential of circular innovation in LMICs — but also the unique challenges these early-stage ventures face.
Our latest deep dive explores what it really takes for circular innovations to scale, sharing insights from our pilot portfolio and lessons from across the ecosystem — all with one key question in mind: What should donors, investors and innovators know before supporting early-stage circular economy innovation in LMICs?
Scroll down to access the full report, and read on to discover topline insights.
The four things that matter most when scaling circular economy innovations in LMICs
Our analysis surfaced four critical factors that determine whether early-stage circular solutions in LMICs gain traction — or stall:
Access to finance
The policy and enabling environment
Innovative partnerships
A compelling value proposition
Below, we unpack each factor — with real-world examples from our pilots.
1. Circular economy ventures need early capital to prove they work
Many circular economy solutions require significant upfront investment in equipment, materials, and production infrastructure. That makes early-stage funding not only essential — but also difficult to access.
Take the bioplastics pilot in Nepal. Before agreeing to a meeting, impact investors wanted to see detailed market feasibility and proof of concept. But how can ventures like this generate that evidence without first securing the funding needed to purchase equipment and demonstrate their solution?
Thanks to early-stage grant funding from the FT Hub, the pilot team was able to run market experiments and test whether existing plastic production facilities could be retrofitted to produce bioplastics. When this proved commercially unviable, the grant also enabled them to pivot — investing in equipment to begin producing bioplastics themselves.
A similar story played out in the Rice Husks to Silicon pilot in Malaysia, which is now moving from lab-scale testing to industrial prototyping. This critical transition would not have been possible without early grant support.
To move forward, early-stage circular economy innovators need funders who are willing to take on more risk than they might in other sectors — offering flexible grant funding for the essential equipment and infrastructure that unlocks proof of concept and paves the way to scale.
2. Policy helps — but only when it’s implemented
Pro-circular policies like plastic bans or green public procurement can create opportunities — but too often, they exist only on paper. Weak enforcement and other issues within the policy environment, such as misaligned tax structures and lack of minimum standards, can all undercut their impact.
In Nepal, for instance, plastic bag bans have seen little enforcement due to a lack of alternatives. The Bioplastics Nepal pilot directly responded to this gap — but the team understood that this policy alone would not be enough to drive success – not least due to the lack of implementation and enforcement of plastic bans meaning conventional plastic products remain widely available. Instead, they would need to validate market demand and ensure they could compete with conventional plastic.
Funders and innovators alike should look beyond policy headlines and assess real-world implementation of policies.
3. Partnerships can be a launchpad for scale
No circular innovation scales in isolation. Collaborations — with corporates, governments, communities or universities — are often what push a promising idea to the next stage.
In the Rice Husks to Silicon pilot, the partnership between Universiti Malaysia Perlis and CT-Wood brings together academic research and commercial ambition. The university contributes lab testing and technical expertise, while CT-Wood can focus on how to turn a lab innovation into a viable business model.
Elsewhere in our portfolio, innovators like CIST Africa - who turn the invasive species, water hyacinth, into cooking fuel and hand sanitiser - have benefited from government partnerships to unlock funding and benefit from advice on navigating environmental assessments and approvals.
Innovative partnerships — particularly those that connect early-stage ventures to larger organisations with reach and credibility — are often the difference between an idea that works in theory and one that scales in practice.
4. Sustainability isn’t enough — products need to be affordable, useful and high-quality
While circular credentials might attract attention, they don’t guarantee adoption. In LMICs, price sensitivity is high, and customers often prioritise reliability, affordability, and performance over environmental benefits.
Innovators need to develop value propositions that speak directly to these needs. For CIST Africa, that meant focusing initially on urban customers more likely to pay for clean cooking fuel than rural users who traditionally gather firewood and are not used to paying for cooking fuel. For the Bioplastics pilot in Nepal, even among target customers with sustainability-linked export requirements, matching conventional plastic packaging on price and performance was crucial.
So what can funders do?
Donors, development partners and impact investors all have a critical role to play. Some key takeaways from the report include:
Provide flexible, early-stage grants that allow innovators to invest in equipment, test business models, and prove viability.
Support matchmaking between early-stage ventures and larger partners — including corporates, research institutions and governments.
Bridge the 'valley of death' by offering follow-on funding, technical assistance, and connections to later-stage capital.
Back advocacy and policy engagement, so innovators can shape the rules that will ultimately define their markets.
Ready to dive deeper?
Whether you're a funder looking to shape your next circular economy initiative, or an innovator building something new, our full report offers practical insights, examples, and recommendations to help you scale impact.
💬 Got questions or ideas you want to discuss? We’d love to hear from you – email ftlenquiries@dt-global.com
Explore the circular economy pilots across our portfolio 🚀
🍠 Protecting white yam crops using treated banana-fibre paper — Frontier Tech Hub
💡 Bioplastic future: using bioplastics to transform domestic plastic production — Frontier Tech Hub
🌾 From rice husk to silicon: exploring new supply chains for semi-conductors — Frontier Tech Hub
♻️ Salvaging Waste to Protect Lives in Nigeria During COVID-19 | by Chime Asonye | COVIDaction | Medium
Publish date: 02/05/2025