The Role of Industry 4.0 Technologies for Circular Economy Ecosystem in European Perspective: A Systematic Review and Future Research Directions

This research synthesizes a more than a decade of empirical and conceptual research on Industry 4.0 technologies with circular economy ecosystem in the European context. The shifting from linear to circular economy requires adoption of I4.0 technologies in particular Artificial Intelligence (AI), Internet of Things (IoT), and Virtual Reality (VR). Yet current scholarship on circular economy ecosystems (CEE) remains theoretically fragmented. To address this gap, we conducted a systematic literature review (SLR) of 94 peer-reviewed journal articles (2010–2025) using the Web of Science (WoS) database following the PRISMA protocol by deploying theories, contexts, methods (TCM) framework and thematic analysis. We developed a comprehensive framework based on addressing key barriers e.g., diverse expectations of stakeholders, resistance to change, sustainable leadership challenges, lack of digitally enabled-capabilities and institutional pressure with the help of important enablers such as AI capabilities, collaboration with stakeholders, frugal innovation and supportive government policies. Our findings contribute to the emerging discourse on how combining digital technologies with circular economy practices can support the development of low emission manufacturing systems, in line with current zero-emission policy goals in the European Union. This review contributes fragmented literature by highlighting theoretical, contextual and methodological gaps as previously disparate perspectives to help align and move research forward. This research contributes to SDG 9- “Industry, innovation and infrastructure” and SDG 12 “Responsible Consumption and Production”.