What digital-enabled dynamic capabilities support the circular economy? A multiple case study approach

Circular economy and digital technologies are crucial topics in the current academic and managerial debates. It is largely recognised that - although related to different paradigms - digital technologies could support the industrial circular transition, fostering the adoption of circular economy practices. So far, the relationship has been studied by directly linking the adoption of digital technologies to the implementation of circular economy practices; however, indications for practitioners are unclear. There is thus the need to investigate the relationship at a deeper level. This paper aims at contributing to the debate by adopting a dynamic capabilities theory perspective. By employing an explorative multiple case study methodology and based on an abductive logic, this study investigates 11 Northern-Italy industrial firms in order to understand the transformations that occurred following the adoption of digital technologies and how these transformations supported the adoption of circular economy practices. The results shed preliminary light on which dynamic capabilities – sensing, seizing, and transforming, and their related microfoundations – can be enabled by the different digital technologies and how these capabilities and microfoundations support the circular transition. The study thus provides a first-of-a-kind investigation and suggests propositions for further research to better deepen the knowledge of digital-enabled dynamic capabilities supporting industrial circular economy