A conceptual model of artificial intelligence effects on circular economy actions

Abstract

The circular economy (CE) presents a contemporary approach to integrating economic activity and environmental well-being sustainably, opposing the linear open-ended system. However, implementing this paradigm poses challenges, needing a fundamental shift in companies' strategies and business models. Emerging technology can support companies in transition toward CE and in particular artificial intelligence (AI) can play a crucial role in facilitating this transition by supporting companies not only in specific CE activities but also in strategically redefining their entire business models. Recognizing the increasing importance of both AI and CE in management literature, our paper seeks to integrate these two distinct streams of literature. Starting from existing studies, it tries to provide a framework able to understand the role of AI technology into enhancing CE. Through a systematic literature review using the Preferred Reporting Items for Systematic Review and Meta-Analysis protocol, using keywords research on three databases, we identified 63 articles that concurrently address both CE and AI topics. Subsequent co-occurrence and content analyses revealed how AI is utilized to bolster CE efforts leveraging the ReSOLVE framework (from the acronymous of Regenerate, Share, Optimise, Loop, Virtualise, and Exchange)—an operational tool for CE. The last step consists into the development of a conceptual framework outlining four stages of AI's engagement with the CE: namely System optimization, System redesign, Business Model redesign, and Ecosystem innovation. From our study emerges that while AI is already recognized for enhancing specific activities within CE, its potential as a strategic planning tool for business model redesign and ecosystem innovation remains largely unexplored.