The Role of Innovation and Digitalization: Influence SMEs to Adopt Circularity in the Business Model

Abstract

The circular economy can balance the environmental aspect and industrial production objectives. It defines the methodology to employ fewer resources and gain production efficiency with the help of reduce-reuse-recycle. Compared to larger organization, small, and medium enterprises (SMEs) faces technical & resource challenges to adopting circular economic practices. This lack of technical know-how and managerial myopic point-of-view towards sustainability hold back SMEs to shift to the sustainable business model from the liner structure. Here transition towards digitalization plays a pivotal role and ignites the innovative mindset. The implication of data analytics and machine-learning algorithm help to optimize the day-to-day operation. Application Artificial Intelligence empowers SMEs to understand consumer insight, risk assessment and predict the outcome. The incorporation of Internet-of-Things and Cloud Computing assist to access product usage data and user behavioural r data easily and entitle the exchange of data across multiple stakeholders.

Keywords: Circular economy, Digitalization, Innovation, R-framework, SMEs.

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