Why circular economy progress depends on more than emerging technologies

The circular economy has moved beyond environmental rhetoric to become a key element of industrial and sustainability strategy. Companies across sectors now face a growing pressure to reduce waste, improve resource efficiency, and comply with tightening regulatory standards. Despite this momentum, execution remains inconsistent, revealing a gap between circular ambition and operational reality.

These issues are explored in the study Integrating Emerging Digital Technologies into Circular Economy Practices, published in the journal Processes. The research evaluates how emerging digital technologies are being used to support circular economy initiatives and finds that digital tools often fail to deliver meaningful circular impact unless they are aligned with mature organizational strategies.

Circular economy awareness is growing, but strategic execution lags

The study finds that awareness of circular economy principles has increased significantly across organizations, reflecting the growing influence of global sustainability frameworks, regulatory pressure, and market expectations. Many firms now recognize the importance of reducing material waste, improving resource efficiency, and moving away from linear production models. However, this growing awareness does not consistently translate into strategic implementation.

Across sectors such as manufacturing, construction, agriculture, and services, circular economy practices are often adopted in a fragmented manner. Organizations tend to focus on isolated actions such as recycling, energy efficiency improvements, or compliance-driven reporting rather than fully redesigning production systems, supply chains, or business models. As a result, circularity remains incremental rather than transformative.

The study highlights organizational size as a critical differentiator. Larger firms are generally better positioned to adopt structured circular strategies due to greater access to capital, technical expertise, and institutional support. Small and medium-sized enterprises, which make up the majority of businesses in many economies, face tighter financial constraints and limited capacity to invest in long-term transformation. For these organizations, circular economy initiatives are often reactive responses to regulation or customer pressure rather than proactive strategic choices.

The study presents Romania as an illustrative case of these broader dynamics. As a transition economy operating within the European sustainability framework, it reflects conditions common to many regions where circular economy policy exists alongside uneven infrastructure, skill shortages, and limited organizational readiness. The study suggests that similar gaps are likely to persist in other economies unless implementation support matches policy ambition.

Digital technologies offer leverage, but integration remains shallow

Digitalization is widely promoted as a catalyst for the circular economy, enabling organizations to monitor resource use, optimize processes, and improve traceability across value chains. The study confirms that many organizations have begun adopting digital tools, but the depth of integration remains limited.

Basic technologies such as cloud computing and data management systems are the most widely adopted. These tools support administrative efficiency and basic monitoring, making them accessible across organizational sizes. However, their contribution to circular outcomes is often indirect unless paired with deliberate sustainability strategies.

More advanced technologies, including artificial intelligence and the Internet of Things, are used by a smaller share of organizations and typically confined to pilot projects. These applications focus on specific functions such as predictive maintenance or energy monitoring rather than systemic circular transformation. While technically promising, such deployments rarely reshape production models or supply chains on their own.

Technologies often associated with advanced circular systems, such as blockchain and robotics, remain marginal. High implementation costs, technical complexity, and skill requirements limit adoption, particularly among smaller firms. Even when these technologies are present, they are frequently disconnected from broader circular economy objectives.

According to the study, digital tools deliver meaningful circular benefits only when aligned with organizational strategy. To capture this relationship, the authors develop a Circular Economy–Digital Readiness Index, which measures how well digital adoption aligns with circular maturity and organizational capabilities. High readiness scores are associated with more consistent circular practices, while low alignment results in limited sustainability impact despite digital investment.

This pattern suggests that digital transformation does not automatically enable circularity. Instead, digital tools amplify existing strategic intent. Where circular thinking is weak or fragmented, technology adoption tends to reinforce efficiency rather than sustainability.

Structural barriers slow progress despite rising investment intent

Despite growing interest in digital and circular transformation, the study identifies persistent barriers that limit progress across economies. Skill shortages emerge as a major constraint, particularly in advanced digital technologies such as AI and IoT. Many organizations struggle to recruit or train personnel capable of integrating these tools into operational and strategic processes.

Infrastructure limitations also play a role. Legacy systems, poor data integration, and limited interoperability restrict the effectiveness of digital solutions. Organizational resistance to change further slows adoption, as digital–circular transformation often requires redesigning workflows, redefining roles, and challenging established practices.

Financial uncertainty remains another significant barrier. High upfront costs and unclear return on investment discourage organizations from moving beyond pilot projects. While digital technologies promise efficiency gains, translating those gains into measurable circular outcomes remains difficult without clear frameworks and metrics.

At the same time, the study identifies strong signals of future momentum. A substantial share of organizations report plans to increase investment in digital technologies, particularly to improve resource efficiency, traceability, and sustainability reporting. This indicates that interest in digital–circular integration is growing, even if current capacity is uneven.

The authors emphasize that Romania's experience reflects broader structural challenges faced by many economies undergoing sustainability transitions. The findings are not presented as country-specific shortcomings but as evidence of systemic gaps between policy goals, organizational readiness, and technological integration.

To sum up, digital technologies are a necessary but insufficient condition for circular transformation. Without strategic alignment, governance support, and skill development, digital adoption risks reinforcing linear efficiency rather than enabling circular systems. For economies seeking to accelerate circular transitions, the decisive factor will not be access to technology, but the ability to integrate digital tools into long-term sustainability strategies that reshape how value is created, used, and recovered.