Circular Economy and Innovation: A Systematic Literature Review

Abstract

The circular economy is presented as the sustainable solution as opposed to the current linear model of production and resource management, whose effects impact negatively on the economic, social and environmental dimensions. Through a systematic review of the literature, this article aims to unify and to uncover the available evidence on innovation in relation to the circular economy and to determine those aspects that remain unexplored or should be studied in more depth in order to be able to continue to make progress in this field. Thus, it was found that although the circular economy is at an early stage of implementation, both its benefits and drivers as well as its challenges and barriers to implementation have already been investigated. More importantly, it was found that ecological innovations, which reduce the environmental impact of production and consumption activities, are necessary for the research of new business models and new ways of operating in supply chains that allow closing the circle and taking advantage of all the waste, such as the system of products and services, dynamic capabilities, 3D printing, the biography of the product and the software recycling. To achieve this goal, the evidence shows that it is mandatory to raise awareness of the situation, especially through marketing actions, as well as for companies, including SMEs, to be willing to act together and to align their interests. Implications for Central European audience: The United Nations 2030 Agenda includes 17 Sustainable Development Goals (SDGs), according to which countries should implement the circular economy in order to move towards greater sustainability. In this context, European Union is key for this development, as it is one of the world's major power. This article aims to unify and uncover the available evidence on innovation in relation to the circular economy and to determine those aspects that remain unexplored or should be studied in more depth. By doing so, it will be able to continue to make progress in the framework of the circular economy, enabling the achievement of the ODS. In addition, the majority of the articles reviewed take place in Europe.

‘Circular patents’ and dynamic capabilities: new insights for patenting in a circular economy

“…The previous research on green patents has built upon the Resource-Based View (RBV) to argue that innovation resources enable environmentally innovative companies to distinguish themselves from non-environmentally innovative ones (Rodriguez and Wiengarten 2017;Marín-Vinuesa et al 2020), also in a CE framework (Aranda-Usón et al 2019). More recently, different dynamic capabilities have been analysed for their positive effect on green innovation (Ahmad et al 2022;Yin and Wang 2021), and to enhance companies' ability to gain competitive advantages for the CE (Marrucci et al 2021;Herrero-Luna, Ferrer-Serrano, and Pilar Latorre-Martínez 2022).…”

Circularity as a Dynamic Capability: A Review and Future Agenda for a Circular Transition

“…Most of the studies showed that innovation and eco-innovation capabilities help to make the transition to the circular economy (CE) (Arekrans et al, 2022;Bag et al, 2022;Herrero-Luna et al, 2022;Pieroni et al, 2021;Portillo-Tarragona et al, 2018;Santa-Maria et al, 2021;Scarpellini et al, 2018;Scarpellini et al, 2020b;Sehnem et al, 2022;Uhrenholt et al, 2022). Also noteworthy are the studies that showed that the adoption of technologies helps in the transition from linear economy (LE) to CE (Arroyabe et al, 2021;Belhadi et al, 2022;Lu et al, 2022;Moon & Lee, 2021;Stekelorum et al, 2021).…”

“…Research conducted in recent decades has diligently sought to identify a new production and consumption model based on sustainable development, aiming to mitigate resource exploitation and waste (Herrero-Luna et al, 2022;Marín-Vinuesa et al, 2021;Jesus et al, 2018).…”

Implementation of the SDGs by social economy enterprises in the agrifood sector

“…Jacob-John et al (2021) evaluated the impact of the implementation of the SDGs in the food industry supply chain, proposing measures to improve sustainability and reduce the environmental and social impact of food production and distribution. Herrero-Luna et al (2022) presented the circular economy as a sustainable solution that contributes to companies' implementation of the SDGs, especially in the food sector. Finally, CSR has also been reported as a dominant practice to achieve the SDGs (Bargava et al, 2022;Godivan, 2022;Meseguer-Sanchez et al, 2021).…”