Level of Competitiveness and Innovation in the Circular Economy of the European Union

Sustainable development, as a cornerstone of contemporary political frameworks, is closely linked to the concept of the circular economy (CE). In the context of the European Union (EU), the transition towards a circular economy is considered a key element in achieving a sustainable, low-carbon, resource-efficient, and competitive economic model. The aim of this article is to partially fill the research gap regarding the connections between recycling, the use of secondary raw materials, and the innovation and competitiveness of EU member states’ economies. Based on a critical literature review, it was identified that there is a lack of comprehensive studies analyzing these relationships in the context of EU countries, which serves as the starting point for this research. The study applies CE indicators proposed by the European Commission, which, after conducting a literature review, were deemed the most appropriate for analysis. Descriptive statistics were used to analyze data on recycling rates and the use of secondary raw materials in EU countries. Additionally, the study was enhanced by an analysis of the impact of recycling and circular economy practices on innovation and competitiveness in various countries, conducted through a multidimensional comparative analysis using the Hellwig's method. The analysis results indicate a significant positive correlation between recycling rates, the use of secondary raw materials, and economic innovation and competitiveness. Specifically, Germany, with a municipal waste recycling rate of 69.3% in 2021, ranks at the top among countries in terms of the number of patents and investments in technologies related to the circular economy. The findings suggest that national policies should focus on supporting innovation and increasing recycling efficiency, which could benefit both environmental protection and economic growth. The results also indicate that countries with lower recycling rates may face limitations in terms of innovation and competitiveness. In the case of these countries, policies focusing on investments in recycling technologies and the promotion of innovation could help improve performance in both areas.