Startups enabling circular service systems in smart cities: a conceptual framework with AI-simulated illustration

Purpose This paper develops a conceptual framework that positions startups as systemic enablers of circular economy (CE) strategies within smart city service ecosystems. Addressing a gap in the service quality, service science and sustainability literature, this study aims to conceptually explore how startups operationalise circular principles through service innovation, digital technologies and multi-actor collaboration to support the transition to circular urban service systems. Design/methodology/approach This study adopts a conceptual research design complemented by an exploratory simulation-based illustration. Secondary literature is synthesised to identify key dimensions, while insights from the IMD (2025) are used as a contextual reference rather than an empirical benchmark. Based on this framework, a ten-item prototype questionnaire was developed and illustrated through a controlled simulation involving 12 artificial intelligence-generated synthetic stakeholder personas representing startup founders, urban planners, corporate innovators and sustainability experts, selected based on recurrent role typologies in the smart city and CE literature. Personas and responses were generated using a large language model (ChatGPT-5) as an instrument-prototyping device and provided Likert-scale evaluations and short qualitative rationales. The simulation is explicitly illustrative and does not constitute empirical data collection. Findings The illustrative simulation highlights convergent and divergent patterns in stakeholder perspectives. Startups are consistently perceived as strategically relevant for advancing circular transitions through Industry 4.0 technologies and reuse-oriented service models. At the same time, greater variability emerges regarding institutional support, policy adequacy, inclusivity and public–private collaboration. Research limitations/implications The findings are based on synthetic data and are not generalisable. This study provides a transparent, replicable prototype assessment instrument intended to support hypothesis generation and guide future empirical stakeholder research on smart circular cities. Practical implications The framework offers a structured lens for policymakers and urban managers to design innovation-friendly and inclusive circular service strategies, and supports startups in strengthening their service-based positioning within urban ecosystems. Originality/value By integrating service science and CE perspectives, this paper advances a novel conceptual synthesis and demonstrates an illustrative, stakeholder-oriented assessment tool, contributing to theory building at the intersection of service quality, sustainability and smart cities.