Digital technologies and circular economy capabilities: exploring the roles of supply chain knowledge development processes and environmental uncertainty

Purpose This paper aims to examine the role of supply chain knowledge development processes to mediate the connection between Industry 4.0 digital technologies and circular economy (CE) capabilities, in a business context marked by environmental uncertainty. Design/methodology/approach The authors conducted a survey-based study and collected data from 205 French manufacturing firms. They then applied statistical analyses to examine how supply chain knowledge development processes and environmental uncertainty influence the relationship between digital technologies and CE capabilities. Findings The empirical findings partially support the research hypotheses. The results show that without structured processes for knowledge acquisition, shared meaning and achieved memory, it would be challenging to develop CE capabilities. In addition, digital technologies play a key role in facilitating data gathering and analysis. Practical implications Given the central role of knowledge development in shaping CE capabilities, firms should invest in structured knowledge management systems that support both knowledge acquisition and memory retention. Digital transformation strategies should go beyond mere technology adoption and focus on building robust supply chain knowledge development processes by integrating digital tools with effective knowledge-management mechanisms. Originality/value While prior studies have predominantly examined the direct link between digital technologies and the CE, few have empirically considered the mechanisms through which this relationship unfolds. Addressing this gap, this study tests the mediating role of supply chain knowledge development processes. Grounded in the knowledge-based view, it offers a more comprehensive and nuanced understanding of how firms can build CE capabilities in the face of growing market complexity.