Circular economy: a growing market for sustainable innovations

As a paradigm shift in sustainable development, a circular economy enabled by innovative business models ensures a competitive advantage by prioritising and improving resource efficiency, reducing waste and costs, creating value, and meeting sustainable demands.This paper explores the circular economy as a growing market for sustainable innovations, analysing key drivers, economic opportunities, and challenges for businesses and economies.The information base for the research is the Eurostat and World Bank panel data for the European Union (EU) countries covering the period from 2014 to 2020.The research aims to examine the impact of circular economy indicators (Private investment and gross added value in circular economy sectors; patents related to recycling and secondary raw materials; persons employed in circular economy sectors) on gross domestic product (GDP) per capita in the selected countries.The research results, obtained through descriptive statistics, correlation, and regression analysis, indicate a positive association between circular economy indicators and GDP per capita.By examining the circular economy indicators in the EU, the authors emphasise how economies and businesses can leverage circular strategies to enhance competitiveness and resilience.The research findings suggest that businesses embracing circular economy models benefit from increased profitability, reduced environmental impact, and enhanced consumer engagement, positioning sustainability as a core driver of long-term economic growth.