‘Better together’: Evidence on the joint adoption of circular economy and industry 4.0 technologies

The circular economy (CE) and Industry 4.0 are both vital new perspectives in production economics and operations management. However, it remains largely unclear whether or not there are complementary effects on performance which can be achieved by adopting them together. This paper bridges this gap through an empirical study. Drawing upon the resource-based view and complementarity theory, original quantitative primary data is collected through a survey of supply chain managers working for companies operating in Brazil. The individual and joint effects on sustainability of adopting CE and Industry 4.0 technologies (including economic, environmental, and social measures) and firms' operational performance are examined. Our original findings indicate that there is indeed a synergistic effect on performance resulting from joint adoption of CE and Industry 4.0 technologies; in addition, the isolated adoption of Industry 4.0 technologies does not affect social performance. However, through the joint adoption of CE and Industry 4.0 technologies, a positive influence on social performance is identified. This paper contributes to the literature by (i) confirming a potential synergistic effect between CE and Industry 4.0 technologies, as well as revealing their importance to business operations and social performance, and (ii) extending the contributions of previous conceptual and exploratory studies on the nexus of CE and Industry 4.0.