Synergizing the Digitalization, Servitization, and Green Practices for Circular Economy: A Configurational Approach

Abstract

The transition to a circular economy is increasingly recognized as being vital for the sustainable development of industries. Indeed, the emergence of new green and digital technologies, such as Internet of Things, artificial intelligence, precision agriculture and renewable energy solutions, drives businesses to undergo multiple transformations. With the adaption of their business models and the enhancement of customer orientation, these technologies facilitate the creation of new business solutions and services that promote business circularity. Several factors have been identified in the emerging literature on the circular economy that could potentially impact the operationalization of the circular economy. It is, however, still unclear how these factors interact to result in the implementation of circularity. Hence, the purpose of this study is to explore the various configurations of enabling conditions that lead to successful circular economy operationalization. By using a fuzzy set qualitative comparative analysis (fsQCA), we examine the impact of different configurations of “digitalization”, “servitization”, “business model innovation”, “green practices”, and “customer participation” conditions on achieving circular economy. Based on survey data obtained from Dutch AgriTech companies, multiple paths to successful circular economy adoption are observed. The findings underscore the complexity of achieving circular economy, demonstrating that no single strategy is sufficient. Instead, a combination of several factors must synergize in order to ensure sustained circularity. Therefore, this study contributes to both the literature on digital servitization and circular economy, while providing insight to practitioners and policy makers seeking to promote circularity.