Exploring Smart Circular Systems: Intersection of Servitization, Digitalization, and Circularity

In response to resource depletion, waste, and emissions, the transformational shift from the current linear economy model—characterized by production, consumption, and disposal—to a circular economy (CE) has attracted the attention of academia and major global industries. CE focuses on resource reuse, maintenance, upgrades, and recycling, aiming to minimize resource consumption and waste while fostering economic benefits for companies. Furthermore, the emergence of Industry 4.0 and newly developed digital technologies has raised expectations regarding their role as drivers for implementing CE. Manufacturing companies have begun adopting digital technologies in their business models to implement CE principles. Given the potential synergy between digitalization and CE, smart circular systems (SCS) have been proposed as a new business framework that integrates digital technologies into product-service systems to enhance circularity and economic viability. However, SCS is a nascent concept that lacks precise definitions and principles, creating challenges for its practical implementation in achieving CE goals. Therefore, this study aims to elucidate the SCS concept by briefly reviewing pertinent literature from related fields. This study addresses the relationships between SCS and related business models and the characteristics that SCS should adhere to. This study contributes to the understanding of SCS and its potential to advance CE through digitalization and servitization.