Integrating Circular Economy and Industry 4.0 through Dynamic Capabilities

Abstract

Objective of the study: This paper proposes an integrative framework that considers Industry 4.0 (I4.0) and the Circular Economy (CE) through Dynamic Capabilities (DCs). Initially, the proposed framework emerged from the literature, presenting seven DCs for integrating I4.0 and CE, along with their subcategories. Methodology/approach: The paper was developed in four steps: (i) a literature review was adopted to define the main constructs: I4.0, CE and DC; (2) the framework proposition; (iii) data collection adopting experts’ opinion by semi-structured interviews; and (iv) framework refinement. Originality/Relevance: The paper contributes to the literature by integrating CE principles and practices with I4.0 technologies, based on the development of DCs. Main results: The results highlighted that Big Data Analytics, and the Internet of Things are the most prevalent technologies for facilitating CE practices, specifically recycling and reduction. Regarding DCs, learning, leadership, and culture are the most relevant. From the results, a new subcategory of leadership and culture DC emerged: communication skills. Theoretical/methodological contributions: This paper is among the first attempts to relate CE to I4.0 through DCs, proposing a framework that represents a meaningful conceptual structure to illustrate the relationship between these constructs. Social/management contributions: The framework enables managers to assess strengths, weaknesses, and improvement opportunities for CE development supported by I4.0 technologies.