Abstract
The existing linear economic model is approaching its physical limits; hence, shifting towards a circular economy – a regenerative system of production and consumption has become imperative. Global environmental standards have prompted numerous corporations to set objectives for transitioning to a circular economy. However, altering the approach to economic activities necessitates shifts in mindset and methodologies; these modifications may range from gradual enhancements to transformative shifts, all underpinned by innovation. Despite researchers acknowledging the importance of innovation in transforming business models, products, and processes to achieve circularity, the studies remain fragmented, with different dimensions being investigated in isolation. There is a dearth of comprehensive coverage of the types of circular innovation organizations can undertake. Addressing this gap holds significant scope for literature advancement and managerial implications. This study contributes to this by conducting a systematic literature review of CE innovation undertaken by circular-driven organizations. It identifies stages of CE innovation at the Macro, Meso, and Micro levels, detailing key actors, innovation attributes, and outcomes. Additionally, it offers a framework outlining the type, components, and output of each CE innovation. Analysis reveals that innovation leveraging Digital or Industry 4.0 technologies is emerging as the dominant trend across all categories of circular innovation. This study fills the strategic and managerial gaps in operationalizing circular innovation at different organizational levels. It shows which circular strategies call for which type of innovation, the components of particular CE innovations, and their outcomes. The recommendations for future research outlined in this study can help scholars gain insights into the evolving landscape of CE innovations, especially at the intersection of CE and Digital technologies.
Keywords: Circular Economy, Innovation, Digital Technologies, Industry4.0, Review