Circular economy and innovation: A look from the perspective of organizational capabilities

Abstract

Studies of circular economy and innovation have received increasing attention in academic literature in the last quadrennium. They fill a managerial gap on how to operationalise the transition from the linear model to the circular. They show practices, tools and mechanisms that allow creation of business models based on circularity premises. In this article, we seek to identify the intellectual contours of this emerging field, conducting a review of the basic conceptual framework, with an analysis of articles published on the topic of circular economy and innovation. In summary, a systematic literature review was developed, whose final bibliographic portfolio consisted of 94 analysed papers. The results of the study show that eco-innovation and innovation in business models are highlighted in this field. They are operationalised, mainly, by activating dynamic, relational and absorptive capabilities. The most important innovation practices in this context are waste management, eco-design business models, product leasing and collaborative commerce. The main contribution of this study is to pave the way for new conceptual developments in organisational capabilities to make transition sustainable and serve as a support arsenal for the maturation of circular economy studies supported by the theory of innovation and also to link management practices to operational processes in the business and production environment favouring the transition to a circular business model. It generates insights for the scientific progression of studies and shows propositions that can be validated in future quantitative studies.

How do incumbent firms innovate their business models for the circular economy? Identifying micro‐foundations of dynamic capabilities

“…The present study lays in the intersection of the emergent field of BMI for the CE—or CBMI—(Santa‐Maria et al, 2021) and the increasingly adopted theoretical lens of DC (Schilke et al, 2018; Teece et al, 1997), both of which are briefly presented in this section. DC are one of the most researched topics in the intersection of innovation and the CE (Sehnem et al, 2021), though its exploration at the CBMI level has only recently begun (Bocken & Geradts, 2020).…”

Industry 4.0 and the Circular Economy: Integration Opportunities Generated by Startups

“…In this context, we list solutions provided by Industry 4.0 and AI for the implementation of circular economy and circularity in production chains. They are supported in a basic way by the studies of [24][25][26][27][28][29][30][31][32][33][34]. They are:…”

Integration of the Circular Economy Paradigm in Companies from the Northwest of the Iberian Peninsula

“…Finally, the current focus of research, development, and innovation is lined up with the perception that the industrial sector's focus should be the innovative conception of products [72], eco-innovation [44,73], green technologies [74], responsible production [75], and use technologies from Industry 4.0, such as Artificial Intelligence (AI), Internet of Things (IoT), Blockchain, and Big Data [71,[76][77][78][79][80][81]. The literature further states that innovation is the basis for new ways of producing goods, retaining resources value in the productive processes, and promoting disruption and reformulation, thus contributing to the application of CE [82].…”