Does digitalization foster the path to a circular economy? An exploratory analysis of European Union countries

Abstract

European Union (EU) governments are placing intensified stress on both the development of the circular economy (CE) and digital performance. In spite of the strategic and economic relevance of these two scientific fields, there is a lack of evidence regarding their mutual effects and implications. We tackle this gap by analysing how digitalization favours the path towards the CE across EU member states. Firstly, a cluster analysis was conducted to identify groups of EU countries depending on circular behaviour, resulting in the Generators, Recyclers, Achievers, Innovators classification. Subsequently, an analysis of variance was performed to examine how the groups were influenced by the different contexts of digitization. This has allowed us to detect that the digitalization variables of human capital, integration of digital technology and digital public services, are key drivers of variability in the CE. Moreover, we have found that countries with similar circular behaviour share similar levels of digitalization variables.