Competitiveness in the Era of Circular Economy and Digital Innovations: An Integrative Literature Review
Abstract
:1. Introduction
2. Review Methodology
2.1. Review Design and Rationale
2.2. Analytical Procedure
2.3. Data Sources
- Studies published in peer-reviewed journals or reputable academic conferences.
- Articles published in English to ensure consistency in interpretation and review.
- Research focusing on the intersection of CE, DI, and competitiveness.
- Studies employing qualitative, quantitative, or mixed methods to explore CE or DI as drivers of competitiveness.
- Papers published primarily between 2015 and 2024 reflect the contemporary evolution of digital technologies and the circular economy.
- Studies focus solely on technical algorithms, modeling, or optimization without linking them to competitiveness or CE.
- Non-peer-reviewed sources like white papers, blogs, or opinion pieces.
- Articles without explicitly focusing on CE, DI, or competitiveness as central themes.
- Papers primarily discuss linear economic models without considering circular approaches or innovations.
2.4. Data Collection and Administration
3. Literature Mapping and Analytical Insights
3.1. Existing Literature Reviews and Their Limitations
3.2. Study Volume and Thematic Scope
3.3. Research Methods and Data Types
3.4. Geographic and Sectoral Distribution and Bibliometric Trends
3.5. Author, Institutional, and Country-Level Trends in CE-DI-Competitiveness Research
- Geographic Concentration: Research output is concentrated in Europe (notably Germany, the UK, and Italy), with significant contributions also from China and the USA, reflecting their active innovation ecosystems.
- Institutional Leadership: Leading institutions include the University of Cambridge, Delft University of Technology, and Tsinghua University, often collaborating across sustainability, industrial engineering, and digital innovation faculties.
- Author Collaboration Networks: Co-authorship analyses reveal strong regional collaborations within Europe and Asia. Intercontinental research partnerships, however, remain limited, suggesting opportunities for expanding global collaboration networks.
4. Findings and Discussion
4.1. Technological Enablers
4.2. Operational Challenges
4.3. Policy and Collaboration Opportunities
5. Conclusions, Theoretical and Policy Implications
5.1. Conclusions
5.2. Theoretical Model
5.3. Practical Implications
5.4. Policy Implications
- SME Enablement: Support mechanisms such as grants, tax credits, and subsidized technology programs can offset the upfront costs of DI adoption for SMEs [30,31]. Regional digital innovation hubs (DIHs) should be scaled up to offer SMEs shared access to infrastructure, mentoring, and training [74], acting as knowledge brokers that link academia, government, and industry.
- Standardization and Data Governance: A lack of interoperability and common standards hinders CE collaboration. Policymakers must coordinate the development of standardized data-sharing protocols across industries [33]. Open data initiatives and clear data ownership and protection frameworks are essential to building trust and ensuring transparency in digital circular ecosystems [55].
- Digital Infrastructure Investment: Robust and inclusive digital infrastructure, especially high-speed internet, cloud services, and cybersecurity, is foundational to DI adoption, particularly in underserved regions [91]. Public investments should prioritize equity and resilience, ensuring that both rural and urban firms can participate in digital CE transformations.
- Regulatory and Market Signals: Regulatory sandboxes can allow businesses to experiment with CE practices in controlled environments, helping regulators learn in parallel [88]. Public procurement policies should be revised to favor circular solutions, creating stable demand for sustainable products and services. Tax incentives for CE-aligned digital investments can further encourage adoption [34].
- Collaboration and Ecosystem Governance: Policymakers should promote multi-stakeholder platforms and public–private partnerships (PPPs) to co-create CE-DI solutions [68]. These collaborations can address complex challenges such as resource recovery or circular logistics by pooling expertise and distributing risk [80]. International cooperation can accelerate alignment on global CE standards and policy benchmarks.
- Workforce Development and Social Equity: A digitally fluent workforce is critical for executing CE strategies. Policymakers should invest in education, vocational training, and reskilling programs that prepare workers for emerging roles in digital circular systems [69]. At the same time, social safeguards are needed to address potential job displacement, data ethics, and access inequality. Regulatory frameworks should guarantee data privacy, while social policies should ensure that the CE transition is inclusive and just.
6. Addressing Research Gaps
- Long-Term Impacts: Limited studies explore the socio-economic and environmental outcomes of DI-enabled CE practices. Quantitative metrics are needed to assess the long-term benefits, such as job creation and resource conservation [32]. Additionally, longitudinal studies can provide deeper insights into the sustained impacts of DI on CE transitions.
- Sectoral and Geographical Variations: Research often focuses on specific industries or regions, limiting the generalizability of findings. Future studies should examine diverse sectors and geographies to provide a comprehensive understanding of DI’s role in CE. Cross-comparative studies across developed and developing economies could uncover unique challenges and opportunities.
- Ethical and Social Considerations: Issues such as data privacy, equitable access to technology, and the implications of job displacement remain underexplored. Addressing these concerns is critical for ensuring inclusive and sustainable CE transitions [55]. Furthermore, the ethical implications of using advanced technologies like AI and blockchain in CE must be carefully examined to prevent unintended consequences.
- Opportunities for Future Development: The convergence of CE and DI presents unique opportunities for innovation and collaboration.
- Collaborative Ecosystems: Digital platforms can facilitate partnerships between businesses, governments, and research institutions, enabling the co-development of circular solutions [68]. These ecosystems can act as innovation hubs, fostering creativity and shared value creation.
- Advanced Technologies: Emerging technologies such as AI and blockchain hold significant potential for enhancing resource efficiency and enabling new circular business models. Research should explore their scalability and practical applications across industries [63,75]. Innovations such as digital twins and predictive analytics can further streamline operations and improve CE outcomes.
- Policy Integration: Policymakers must align incentives and regulations to support CE and DI convergence, creating an enabling environment for innovation and sustainability [72]. Additionally, international cooperation on CE standards can be fostered, and practices can enhance global impact and scalability.
7. Future Research Directions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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---|---|---|---|---|---|
[36], 2024 | Explore how AI, blockchain, and digital twins can transform the built environment towards circularity. | Material passports, BIM-linked digital twins, and blockchain-enabled supply-chain tracking are key enablers for closed-loop construction. | Provides practice-ready frameworks for integrating digital tools into circular building practice. | Multidisciplinary literature synthesis and illustrative case studies | Qualitative framework analysis |
[37], 2024 | DTs facilitating CE through lifecycle. | IoT, big data, cloud facilitate CE in design, use, recovery. | Lifecycle DT-CE framework. | 162 studies | Critical review and framework |
[38], 2024 | Conduct a systematic and bibliometric review of CE research trends. | Rapid year-on-year growth (R2 = 0.69); leading themes include eco-design, recycling, and sustainability. | Provides CE research landscape dashboard and trending keywords. | Scopus database (3200 records) | Descriptive bibliometric analysis |
[39], 2024 | Test how inter-organizational collaboration and digital technologies influence circular economy (CE) implementation and sustainability performance. | Collaboration capability strongly drives CE and sustainability performance, while digital technologies alone have a weaker/direct effect. | Provides PLS-SEM evidence linking collaboration capability to CE outcomes; stresses governance over mere tech deployment. | Survey of 112 Austrian manufacturing firms | Partial Least Squares Structural Equation Modeling (PLS-SEM) |
[40], 2024 | Barriers to DT adoption for CE in construction. | 37 barriers across 4 categories; Pareto ranks critical ones. | Barrier taxonomy and prioritized solutions. | 28 papers | Systematic review and Pareto |
[41], 2024 | Measure DT impact on CE via PLS-SEM. | DT improves efficiency; data-security risk moderate’s effect. | Policy and stakeholder insights. | Industry secondary + SmartPLS | PLS-SEM |
[42], 2023 | IT role for CE in SMEs (Russia). | R&D and digital sufficiency policy improve CE performance. | Introduces digital sufficiency concept. | Survey 314 SMEs | Quantitative survey |
[43], 2023 | DT enabling machinery lifecycle extension. | Real-time monitoring extends life and improves EoL decisions. | Tools for manufacturers’ circular BMs. | 2 cases (RECLAIM) | Mixed |
[18], 2023 | Review DT-driven CE research. | AI, blockchain logistics hotspots; social gaps. | Future DT-CE agenda. | 393 records | Bibliometric and qualitative |
[44], 2023 | Analyze data-driven circular business models enabled by digital technologies. | Blockchain, AI, and IoT dominate CBM tool-sets; profitability impact under-researched. | Identifies key DT tools and CBM archetypes; calls for empirical validation. | Systematic review of 122 peer-reviewed articles | Systematic literature review |
[45], 2023 | Quantify the impact of digitalization on CE performance in Greek firms. | Digital innovation shows significant positive correlation with resource efficiency (β = 0.46). | Offers actionable strategies for integrating digital tools into CE. | Survey of 200 Greek firms | Quantitative regression analysis |
[46], 2023 | Prioritize Industry 5.0 technologies that accelerate CE implementation in manufacturing. | Top three technologies: AI-enabled cyber-physical systems, human-centric cobots, and additive manufacturing; ranking refined via interval-valued FAHP. | Introduces an Industry 5.0–CE technology-prioritization method using fuzzy AHP. | Expert survey of 52 manufacturing decision-makers | Fuzzy Analytical Hierarchy Process (FAHP) |
[47], 2023 | Assess AI applications in implementing CE principles in Ireland. | AI improves waste-sorting, predictive maintenance, and policy monitoring; government incentives accelerate adoption. | Links national policy with AI-enabled CE transitions and provides practical use-cases. | Case studies of Irish initiatives and policy analysis | Empirical case synthesis |
[48], 2023 | Demonstrate how IoT and AI optimize resources and reduce waste to shift economies from linear to circular models. | IoT-enabled tracking and AI-driven predictive analytics enhance resource efficiency across sectors. | Provides global cross-sector guidance on IoT/AI adoption for CE transformation. | Secondary literature and real-world case examples | Qualitative review and case synthesis |
[49], 2023 | Digitization in CE business models | Digitization optimizes processes and improves sustainability outcomes. | Future CE-digitization research lines. | Lit and stats | Mixed |
[50], 2022 | Define and conceptualize the ‘Smart Circular Economy’ paradigm (‘waste + data = resource’). | Digital technologies across product life-cycle phases unlock new value loops; recovery phase is least studied. | Introduces smart-CE definition and sets future research agenda on data-driven circularity. | Review of 44 peer-reviewed studies | Conceptual literature review |
[51], 2022 | Theorize blockchain’s role in the transition towards a circular economy. | Traceability and trust are primary blockchain mechanisms; regulation, skills, and interoperability remain key barriers. | Develops a driver-barrier-outcome model linking blockchain innovation to CE transition. | 28 expert interviews across Europe and USA | Thematic analysis and theory building |
[52], 2022 | Map how digital technologies support the circular economy (CE). | IoT, big data, AI/ML, blockchain and additive manufacturing underpin CE; synergy with business-model innovation is critical. | Taxonomy of digital-CE linkages and research gaps. | 208 papers (2000–2021) | Systematic literature review |
[53], 2022 | Innovation and competitiveness within CE. | Blockchain policies boost competitiveness; CE indicators lag EU average. | Shows CE reshapes national competitiveness. | EU panel | Cross-country quantitative |
[54], 2022 | Digital tech and CE capabilities amid COVID-19. | Pandemic accelerated DT adoption: CE mediates performance gains. | Crisis-time guidance. | 312 manufacturers | Survey + SEM |
[55], 2022 | Evidence on CE innovation and gaps. | SME alignment and macro impacts under-studied. | Nine future research avenues. | 198 papers | Systematic review |
[56], 2022 | Review digital innovation in SMEs. | Profit and export outcomes understudied; presents framework. | Antecedent-process-outcome model. | 382 articles | Systematic review |
[57], 2022 | IoT as CE enabler. | Drivers, enablers, barriers mapped; logistics dominates studies. | IoT-CE framework and future directions. | 137 papers | Systematic review |
[58], 2022 | HR collaboration and CE readiness. | Partnership HRM improves human resources for CE. | Actionable HR Road-map. | 6 cases | Exploratory descriptive |
[59], 2022 | Catalog ICT decision-support tools for CE in construction. | Lifecycle-phase framework; identifies tech, business, and societal challenges. | Reference architecture and future-research agenda. | 167 articles | Systematic literature review |
[30], 2021 | Role of digital technologies in CE transition. | Focus on recycling/remanufacturing; design phase under-studied. | Agenda for design-phase digital interventions. | 112 papers | Systematic literature review |
[60], 2021 | Quantify CE–I4.0 research hotspots. | Additive manufacturing and IoT dominate networks. | Keyword co-occurrence maps. | 251 records | Bibliometric analysis |
[17], 2021 | Map DI in KMS for sustainable governance. | AI/Big-Data KMS rising; ties to sustainability value. | Links DI, KMS and long-term value. | 438 records | Bibliometric and thematic |
[61], 2021 | Effect of digital M&A on performance. | Digital M&A expands knowledge base → innovation and ROA gains. | Panel-data evidence of payoff. | 512 firms | Longitudinal regression |
[62], 2021 | Assess corporate incubators in fostering digital innovation (auto sector). | Incubators supply governance and resources while balancing agility trade-offs. | Strategic role of incubators. | 4 case studies | Comparative case |
[15], 2021 | Socio-technical clarity on digital innovation. | Integrates 227 articles; seven-dimension framework. | Unifies digital-innovation literature. | 227 articles | Large-scale review |
[63], 2021 | Digital tech in circular business models. | Case evidence (Alpha, Philips CityTouch, Zen Robotics) shows waste-reduction benefits. | Real-world smart-city CE examples. | 3 cases | Multiple-case study |
[64], 2021 | Interplay between BPM and DI. | Emerging tech reshapes workflows; BPM structures DI. | BPM-DI research agenda. | 126 papers + workshops | Review |
[65], 2021 | Industry 4.0 as CE enabler. | Digital twins and CPS save resources; social pillar under-researched. | Sustainability-impact map linking I4.0 to CE. | 189 documents | Systematic mapping review |
[66], 2021 | Evaluate CBM innovation and challenges. | Resource-efficient strategies prevalent; scalability weak. | CBM evolution map. | 10 case syntheses | Case review |
[34], 2021 | Integrate production models with CE and trade. | Digital platforms and cluster networks enable CE at national scale. | Policy blueprint for platform-based CE. | Policy docs | Conceptual qualitative |
[67], 2021 | Digital tech catalyzing CE business-model innovation. | IoT/data analytics trigger radical BM changes improving resource flows. | Four-type BM-innovation framework. | 132 papers | Systematic review |
[11], 2021 | Map CE-innovation links. | Drivers at product, BM, ecosystem levels; regulation barrier. | Three-level framework and 16 research gaps. | 321 papers | Systematic review |
[68], 2021 | Verify CE actions in ecosystems using digital technologies. | IoT and big-data solutions create collaborative value and accelerate CE transition. | Ecosystem perspective on digital-CE research. | 116 papers | Systematic literature review |
[23], 2021 | Identify DT criteria for sustainable SCM competitiveness. | Logistics optimization, proactive action, real-time inventory top list. | Fuzzy-Delphi model for DT-enabled SCM. | Expert panel n = 20 | Fuzzy Delphi and DEMATEL |
[69], 2021 | Competitiveness model for co-ops via digital innovation and government support. | Gov support → digital capabilities → innovation → competitiveness. | Quantified model linking public support and performance. | Survey 245 co-ops | PLS-SEM |
[70], 2021 | Investigate IoT and platforms impact on SME innovation. | IoT/platforms elevate sustainable innovation; platform mediates IoT effect. | SME digital-orientation model. | Survey n = 372 | PLS-SEM |
[71], 2021 | Study digital-innovation integration in automotive incumbents. | APIs as boundary resources; organizational misfits identified. | Principles for balancing legacy knowledge and digital change. | 3 auto cases | Grounded theory |
[31], 2021 | TQM–KM–sustainability link in CE. | TQM → OS positive; KM partially mediates. | Practical insights for manufacturers. | Survey 510 firms | PLS-SEM |
[29], 2020 | Typology of digital-innovation units. | Incubator, accelerator, venture-studio archetypes. | Guides organizational design. | 23 cases | Qualitative |
[72], 2020 | CE and Industry 4.0 toward SDGs. | Tech innovations add value and aid SDGs. | Frames CE-I4.0 nexus as SDG pathway. | 122 articles | Systematic review |
[73], 2020 | CE competitiveness and sustainable development in Romania. | Stakeholder coordination essential for dual goals. | CE-competitiveness framework. | Desk research | Critical synthesis |
[60], 2020 | Industry 4.0 digital innovations enabling CE. | AI, blockchain, and CPS promote CE but need long ROI and policy support. | Synthesizes CE–I4.0 intersections. | 140 records | Integrative review |
[74], 2020 | DIHs as knowledge brokers for SMEs. | DIHs orchestrate training and funding accelerating digitalization. | DIH knowledge-broker model. | Survey and interviews | Conceptual and empirical |
[75], 2020 | Blockchain’s capacity to enable CE. | Transparency and traceability main benefits; scalability and regulation barriers. | Blockchain-for-CE framework. | 79 items | Systematic literature review |
[33], 2020 | Link business analytics and circular strategies. | Digital tech and BA improve resource efficiency; assess strategy–circularity fit. | Proposes Smart-CE framework. | 68 papers and 6 cases | Theory and practice review |
[76], 2020 | Analyze DT use in Uzbek industrial production. | Digitalization boosts collaboration and export potential; skill gaps impede progress. | Development concept for high-tech export. | Trade indicators 2010–2019 | Indicator analysis |
[77], 2019 | SME agility in disruptive digital innovation context. | Boundary openness and adaptability mitigate rigidity. | Agility-building framework. | Single case | Qualitative |
[16], 2019 | Synthesize digital-innovation research streams. | Uneven topic coverage; proposes future agenda across seven dimensions. | Comprehensive research roadmap. | 649 records | Systematic review |
[78], 2019 | Build holistic framework on digital innovation and entrepreneurship. | Emphasizes openness, affordances and generativity; highlights multi-level tensions. | Cross-disciplinary framework. | Conceptual synthesis | Theory essay |
[79], 2019 | Digital innovation and competitiveness. | Digital platforms and collaboration drive competitive edge. | Links digital-platform adoption with CE competitiveness. | 78 CIS firms | Comparative case |
[80], 2018 | Opportunities and challenges of digitalization for CE. | Digital twins, product virtualization key; data quality challenges. | Strategic role of digitalization for CE. | 140 papers and expert insights | Exploratory qualitative |
[81], 2018 | Digital tech in usage-focused business models for CE. | Predictive maintenance, IoT monitoring extend product life. | Shows digital tech as CE enablers. | Literature and case | Mixed |
[82], 2018 | Model blockchain adoption as digital innovation. | Adoption continuous, change-heavy; no fixed endpoint. | Stage-model and guidelines. | 14 interviews and archives | Mixed methods |
[83], 2018 | Investigate competitive advantage from industrial IoT. | IoT transforms value chains and customer relations, creating new advantages. | Explains IoT-driven differentiation. | Literature and desk cases | Comparative analysis |
[84], 2018 | Identify organizational barriers to CE in manufacturing. | Culture, knowledge, supply-chain, tech and regulatory barriers. | Cross-domain barrier framework. | 46 studies and interviews | Qualitative synthesis |
[85], 2018 | Role of Chief Digital Officers in DI. | Defensive, offensive, ambidextrous logics identified. | Strategy archetypes and tensions. | 35 interviews | Qualitative |
[20], 2017 | Analyze CE definitions. | 114 definitions vary widely; systemic change often missing. | Meta-definition and conceptual gaps. | 114 documents | Content analysis |
[86], 2017 | Implications of digital innovation for innovation-management research. | Digital materials shift agency and processes; four new theorizing logics. | Foundational agenda for digital-innovation studies. | Conceptual | Theory essay |
[32], 2017 | Digital technologies in CE transitions. | DT optimizes forward and reverse flows; empirical gaps. | Early research agenda. | 75 sources | Systematic review |
[87], 2016 | Role of customer and user knowledge in B2B DI. | Customers inform short-term, users long-term innovation. | Two knowledge pathways. | 3 cases | Holistic case |
[88], 2016 | Design CBM canvas. | Adds take-back systems and adoption factors. | CBM framework for practitioners. | 70 cases | Conceptual |
[89], 2016 | Explore cultural influences on global e-service innovation. | Collectivism and uncertainty avoidance lower adoption; social pressure and self-efficacy mediate. | Culture-aware strategy guidance for e-service roll-out. | Survey n = 452 (5 regions) | SEM |
[90], 2015 | Managerial diagnostic framework for digital innovation. | Five capability areas must co-evolve. | Practical framework and diagnostic tool. | Conceptual and cases | Conceptual |
[21], 2012 | Redesign global production/consumption for CE. | Calls for decoupling growth from resource use; workshop coalitions. | Early policy blueprint for CE. | Policy lit. | Narrative review |
Review Type | Key Themes Identified | Critical Appraisal Summary | Conceptual Frameworks Developed | Identified Research Gaps | Practical Implications |
---|---|---|---|---|---|
Systematic (n = 15) | Digital technologies supporting CE (e.g., IoT, blockchain, AI); lifecycle alignment in CE transitions; ecosystem-based value creation | Strong in transparency and structure, but limited in thematic synthesis and competitiveness integration | Taxonomies (Chauhan et al.); lifecycle models (Yu et al.) | Weak theorization of competitiveness; limited early-stage CE focus | Sector-based guidance for digital CE transitions |
Integrative (n = 1) | Holistic CE-DI strategies; dual focus on technical and organizational innovation | Theoretical richness but often lacks empirical specificity | CE-DI capability models (Cioffi); sociotechnical innovation logics | Weak comparability and impact metrics | Mid-range theories for governance and SME transformation |
Bibliometric (n = 5) | Publication networks, keyword co-occurrence, and author collaboration | Excellent mapping power but little conceptual depth | Landscape mapping and topic clustering | Under-theorized geographic or institutional gaps | Academic benchmarking and research prioritization |
Conceptual/Theory-Guided (n = 4) | CE and DI as capabilities; sociotechnical theory; innovation logics | Strong frameworks but minimal empirical application | Innovation diffusion, RBV, and strategic frameworks | Little operational grounding in policy/industry | High relevance for theoretical modeling and strategic foresight |
General Literature Review (n = 8) | Broad CE-DI enablement themes: technology as a sustainability driver | Often anecdotal and lacking rigor or theory alignment | Sustainability narratives, resource efficiency | Conceptual dispersion and duplication | Entry points for non-specialist policy and business adoption |
Review or Method Type | Count |
---|---|
Systematic Review | 15 |
Quantitative (e.g., SEM, PLS-SEM) | 12 |
Qualitative (e.g., interviews) | 15 |
General Literature Review | 8 |
Bibliometric Review | 5 |
Mixed Methods | 10 |
Integrative Review | 1 |
Conceptual/Theory-Guided | 4 |
Meta-analysis | 1 |
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Awad, I.M.; Nuseibeh, H.; Amro, A.A. Competitiveness in the Era of Circular Economy and Digital Innovations: An Integrative Literature Review. Sustainability 2025, 17, 4599. https://doi.org/10.3390/su17104599
Awad IM, Nuseibeh H, Amro AA. Competitiveness in the Era of Circular Economy and Digital Innovations: An Integrative Literature Review. Sustainability. 2025; 17(10):4599. https://doi.org/10.3390/su17104599
Chicago/Turabian StyleAwad, Ibrahim M., Hasan Nuseibeh, and Alaa A. Amro. 2025. "Competitiveness in the Era of Circular Economy and Digital Innovations: An Integrative Literature Review" Sustainability 17, no. 10: 4599. https://doi.org/10.3390/su17104599
APA StyleAwad, I. M., Nuseibeh, H., & Amro, A. A. (2025). Competitiveness in the Era of Circular Economy and Digital Innovations: An Integrative Literature Review. Sustainability, 17(10), 4599. https://doi.org/10.3390/su17104599