Toward circular transition: Exploring the role of circular start-ups

Abstract

The transition to a circular economy is essential for addressing global sustainability challenges; however, the role of circular start-ups in this process remains underexplored in the academic literature, which has traditionally focused on established firms. This study aims to address this gap by investigating how circular start-ups operate, their business models, stakeholder engagement and the use of Industry 4.0 technologies. Through a systematic literature review supported by AI tools for the selection and analysis of 28 scientific articles, the study identified seven key areas of action for circular start-ups: circular innovation, social inclusion, knowledge dissemination, education and advocacy, collaborative partnerships, disruptive leadership and sustainability promotion. The findings reveal that although these start-ups act as catalysts for change at the niche (micro) level, their broader impact depends on meso-level factors (stakeholder networks) and macro-level conditions (public policies). The adoption of digital technologies and collaboration with actors such as universities, governments, and investors are critical to their scalability. The study concludes that despite demonstrating high innovation potential, circular start-ups' capacity to drive systemic transformation requires a supportive ecosystem, highlighting the need for targeted policy support and further research into their application across different geographical and sectoral contexts.