Digitalisation: Catalysing the Transition to a Circular Economy in Ukraine

Digitalization can contribute to the shift towards a sustainable circular economy (CE). Digitalization not only refines business processes but also emphasizes waste curtailment, prolonging product life, and slashing transaction costs. Therefore, digitalization supports the growth of circular economy business models by aiding in closing the loop, decelerating the material cycle, and narrowing the cycle by improving the efficiency of resource utilization. However, fully leveraging this integration presents challenges, with clear gaps hindering the fluid adoption of digital-backed circular business models. Despite its significance, there's a dearth of comprehensive literature on digitalization's potential and challenges. This research aims to explore the main benefits and obstacles of applying digitalization in CE business models in Ukraine, focusing on identifying opportunities and challenges and finding ways to overcome these hurdles. The study involved online interviews with business representatives, researchers, NGOs, and students (a total of 36 participants) during the thematic training course according to the Erasmus + program in an online format in Ukraine (December 8–10, 2023). One of the activities during the training course was finding answers to four questions relevant to the research aim in small groups for 40 min for 7–8 participants. The data was recorded and subsequently examined using MAXQDA software for qualitative data analysis. I identified challenges related to the integration of circular principles into existing business models, data ownership, data sharing, data integration, collaboration, and competence requirements. The post-war rebuilding and modernizing of industries towards sustainability, visualization, and innovation in product design, enhancement in resource efficiency, and optimization of logistics process collaboration with stakeholders and implementation of digital technologies were noted as main opportunities in adopting business models based on CE in the Ukrainian perspective. This research uncovered less recognized or previously unexplored prospects linked to digitalization in the context of transitioning to a CE. One of the new opportunities is virtualization in business models can influence on reduce costs, conserve resources, and provide reliable data. The research underscores the significant role of digitalization in enabling the transition towards a circular economy in Ukraine's business sector. While there are considerable opportunities for innovation and modernization, the challenges of integration, collaboration, data management, and skill gaps cannot be overlooked. Addressing these challenges through targeted educational programs, strategic partnerships, and supportive policies will be pivotal in harnessing the full potential of digitalization in advancing circular economy models.