Digitalization as an instrument in support of covering the circularity gap in the European Union economy

Abstract

The primary objective of this paper is to underscore the multidisciplinary nature inherent in both the circular economy and the digital economy, placing particular emphasis on the backdrop of the COVID-19 pandemic. The global health crisis has brought to light a myriad of longstanding medical, social, economic, and environmental issues that have persisted for decades. The paper addresses the current challenges at the EU level, acknowledging the EU Green Deal as a somewhat satisfactory framework that aspires to achieve climate neutrality by 2050. However, the potential of smart technologies, particularly digitalization, in transitioning from a linear economy to a circular one is posited to be constrained by the limited imagination of decision-makers in both public and private sectors. Furthermore, this research seeks to delve into the capacity of digital economy indicators to elucidate the dynamics of circular economy indicators. It aims to construct a multi-linear regression model, utilizing the least squares method with panel data, to ascertain the interdependence between key circular aspects of the digital economy. The study’s key finding suggests that while there is some evidence of beneficial connections between the two fields, there remains ample room for enhancing the adoption and utilization of digital components to achieve circular economy objectives. The novelty of this work lies in its demonstration of the multidisciplinary character of the economy amid contemporary challenges, with a specific focus on circular economy, environment, digitization, development, and sustainability. By emphasizing these multidisciplinary conceptual elements, the research contributes to the ongoing discourse and underscores their essential role in societal well-being.