Leveraging on digitalization for circular economy - A multiple case study on manufacturing and service companies

Abstract

Competitiveness is a crucial word for describing what todays’ business environment requires to enterprises. The issue becomes even more complicated considering that there are several phenomena that are challenging companies’ ability to gain a competitive hedge.

On one hand, circular economy appears as the base mark to which companies should urgently work to be aligned to. On the other hand, companies are embarking on changes to become digitalized. Given that, the intuition is that the interplay between circular economy and digitalization might trigger new opportunities. Thus, is there a way in which the former could reinforce and strengthen the latter? Reports from consultancy companies have already answered this question. In fact, they have highlighted that digital technologies could accelerate the transition to circular economy. However, still little scientific research has been conducted to understand if companies are aware of this fruitful interconnection, in particular for service providers, and how managers are rethinking their circular approach to leverage on intelligent assets. Here comes into play this study since it aims at understanding how companies are perceiving the possibility of leveraging on digitalization for circular economy. It consists of a multiple case study within four Swedish-based companies ranging in a continuum from service providers to manufacturing companies.

The results show that as a prerequisite, companies’ shift to circularity still need to be managed. When it comes to the digital side of the coin, technologies as Internet of Things, Artificial Intelligence and blockchain have a great potential in this context.

Connecting the dots, enterprises foresee a positive interplay between digital technologies and circular economy. Besides this rosy picture about general perceptions, this clarity seems to fade away when it comes to proactive actions. Meaning that companies are not actively leveraging on digitalization for circular economy. The reason is twofold. The striking point is that circular economy is not still seen as a competitive factor on a par as digitalization. What is more is that enterprises still conceive these two phenomena separately. By starting to “think in circles”, digitalization could be conceived as enabler for circular economy with the potential to unlock a variety of opportunities.