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A framework of digital technologies for the circular economy: Digital functions and mechanisms

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  • Qinglan Liu
  • Adriana Hofmann Trevisan
  • Miying Yang
  • Janaina Mascarenhas

Abstract

Digital technology is regarded as providing a promising means of moving production and consumption towards the circular economy. However, it is still unclear which functions of digital technologies are most useful to improving circularity, and how these functions could be used to enhance different circular economy strategies. This paper aims to address this knowledge gap by conducting a systematic literature review. After examining 174 papers, creating 782 original codes and 259 second‐round codes, the study identifies 13 critical functions of digital technologies which are most relevant to circular economy strategies. The paper then proposes a framework which reveals seven mechanisms of how these digital functions can enhance different circular economy strategies. The framework also reveals which combinations of the digital functions and circular economy strategies have already been studied extensively as well as where there may be gaps. This indicates which digital functions are more mature in terms of possible implementation for circular economy as well as what missing links there are in the empirical and theoretical research. The study advances the synergies between digital technologies and the circular economy paradigm through the lens of digital functions. The proposed framework and mechanisms build a theoretical foundation for future research, and we highlight five research areas for further studies. This study also provides a structured way for managers to explore the appropriate digital functions for their CE strategies, so as to identify required digital technologies and new value creation through digital functions.

Suggested Citation

  • Qinglan Liu & Adriana Hofmann Trevisan & Miying Yang & Janaina Mascarenhas, 2022. "A framework of digital technologies for the circular economy: Digital functions and mechanisms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2171-2192, July.
    • Handle: RePEc:bla:bstrat:v:31:y:2022:i:5:p:2171-2192
    DOI: 10.1002/bse.3015
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    2. Filippo Vitolla & Vitiana L’Abate & Felice Petruzzella & Nicola Raimo & Antonio Salvi, 2023. "Circular Economy Disclosure in Sustainability Reporting: The Effect of Firm Characteristics," Sustainability, MDPI, vol. 15(3), pages 1-15, January.
    3. Gianmarco Bressanelli & Federico Adrodegari & Daniela C. A. Pigosso & Vinit Parida, 2022. "Towards the Smart Circular Economy Paradigm: A Definition, Conceptualization, and Research Agenda," Sustainability, MDPI, vol. 14(9), pages 1-20, April.
    4. Kayikci, Yasanur & Kazancoglu, Yigit & Gozacan-Chase, Nazlican & Lafci, Cisem & Batista, Luciano, 2022. "Assessing smart circular supply chain readiness and maturity level of small and medium-sized enterprises," Journal of Business Research, Elsevier, vol. 149(C), pages 375-392.
    5. Kanungo, Rama Prasad & Gupta, Suraksha & Patel, Parth & Prikshat, Verma & Liu, Rui, 2022. "Digital consumption and socio-normative vulnerability," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    6. Palash Saha & Subrata Talapatra & H. M. Belal & Victoria Jackson, 2022. "Unleashing the Potential of the TQM and Industry 4.0 to Achieve Sustainability Performance in the Context of a Developing Country," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(4), pages 495-513, December.
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    13. Päivi Luoma & Romana Rauter & Esko Penttinen & Anne Toppinen, 2023. "The value of data for environmental sustainability as perceived by the customers of a tissue‐paper supplier," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3110-3123, November.
    14. John Ayo Olaghere & Henry Egbezien Inegbedion & Faith Ogheneriode Osiobe, 2023. "The Implications of Digitalization in Retail Service Delivery on Circular Economy in Nigeria: An Exploratory Case Study," Sustainability, MDPI, vol. 15(17), pages 1-16, September.
    15. Ahmad, Farhan & Bask, Anu & Laari, Sini & Robinson, Craig V., 2023. "Business management perspectives on the circular economy: Present state and future directions," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    16. Sorin-Daniel GHEORGHE, 2023. "Internet of Things and Circular Economy: A State-of-the-Art Review," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 27(4), pages 44-60.
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