Exploring How Digital Technologies Enable a Circular Economy of Products

Abstract

Recent studies have advocated that digital technologies (DTs) positively affect the transition of a linear economy model to a circular economy (CE) model and facilitate enterprises in implementing circular strategies. Despite this general statement, the literature still overlooks how enterprises should apply various DTs of Industry 4.0 across the entire product lifecycle to operationalize CE-related strategies. To fill this gap, this paper proposes a conceptual framework exploring DTs in terms of CE operationalization from the perspective of the product lifecycle. Based on insights gained through a systematic literature review, we clarify how DTs can facilitate CE performance objectives through the three stages of the product lifecycle: product design, product use, and product recovery or recycling. Furthermore, we study how various Industry 4.0 DTs, such as the Internet of things, big data, and cloud computing, are utilized to operationalize the transition toward a CE. DTs applied to the service-oriented product-service system contributes innovation into circular business models to make full use of idle resources and provide high-quality personalized services. We have adopted three performance objectives: using fewer materials and resources, extending product lifespan, and closing the loop to evaluate the effects of DTs in promoting CE development. By investigating how DTs affect CE performance objectives, the conceptual framework developed in this paper advances the knowledge regarding the role of DTs as an enabler of CE from the product lifecycle. Our findings provide a practical reference enabling researchers and managers to harness the potential of DTs to support CE transition.