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.