The Role of Digital Innovation (AI, IoT, and Big Data) in Accelerating Circular Economy Business Models in the Creative Industries: A Systematic Literature Review
DOI:
https://doi.org/10.59188/eduvest.v6i3.52399Keywords:
Artificial Intelligence, Big Data, Circular Economy, Creative Industries, Internet of ThingsAbstract
This study investigates the role of digital innovation, specifically Artificial Intelligence (AI), the Internet of Things (IoT), and big data, in accelerating the adoption of circular economy business models within the creative industries. Using a Systematic Literature Review (SLR) guided by PRISMA 2020, 26 empirical and conceptual studies published between 2020 and 2025 were analyzed across the fashion, textile, and design subsectors. The findings reveal that IoT is the most frequently implemented technology, primarily enabling real-time tracking, life cycle monitoring, and resource optimization. Big data analytics supports evidence-based decision-making and predictive modeling for waste reduction and efficient logistics, while AI contributes to intelligent sorting, demand forecasting, and digital servitization for circular business model innovation. Collectively, these technologies foster transparency, automation, and collaboration, allowing creative firms to close material loops, extend product life cycles, and enhance traceability. The results highlight that the integration of digital tools creates synergistic ecosystems that embed sustainability into creative production and consumption. However, disparities in digital readiness, financial capacity, and regulatory frameworks continue to constrain large-scale adoption, particularly among small and medium enterprises. Theoretically, this research advances understanding of digital circularity as a strategic interface between technological innovation and sustainable transformation, contributing a conceptual synthesis that links digital capabilities with circular economy mechanisms in creative sectors. The study concludes that future research should explore cross-sectoral governance, data standardization, and the sociocultural dimensions of digital sustainability to strengthen the systemic transition toward regenerative creative economies.
References
Abdelmeguid, A., Afy-Shararah, M., & Salonitis, K. (2022). Investigating the challenges of applying the principles of the circular economy in the fashion industry: A systematic review. Sustainable Production and Consumption. https://doi.org/10.1016/j.spc.2022.05.009
Akhtar, P., Ghouri, A. M., Ashraf, A., Lim, J. J., Khan, N., & Shuang, M. A. (2024). Smart product platforming powered by AI and Generative AI: Personalization for the circular economy. International Journal of Production Economics. https://doi.org/10.1016/j.ijpe.2024.109283
Akram, S. V., Malik, P. K., Singh, R., Gehlot, A., Juyal, A., Ghafoor, K. Z., & Shrestha, S. (2022). Implementation of Digitalized Technologies for Fashion Industry 4.0: Opportunities and Challenges. Scientific Programming, 2022(1), 7523246. https://doi.org/https://doi.org/10.1155/2022/7523246
Ali, S. S., Torğul, B., Paksoy, T., Luthra, S., & Kayikci, Y. (2024). A novel hybrid decision-making framework for measuring Industry 4.0-driven circular economy performance for textile industry. Business Strategy and the Environment, 33(8), 7825–7854. https://doi.org/https://doi.org/10.1002/bse.3892
Almashaleh, O., Wicaksono, H., & Fatahi Valilai, O. (2025). A framework for social media analytics in textile business circularity for effective digital marketing. Journal of Open Innovation: Technology, Market, and Complexity, 11(2), 100544. https://doi.org/https://doi.org/10.1016/j.joitmc.2025.100544
Aranda‐Usón, A., Portillo-Tarragona, P., Scarpellini, S., & Llena-Macarulla, F. (2020). The progressive adoption of a circular economy by businesses for cleaner production: An approach from a regional study in Spain. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2019.119648
Arshad, N. C., & Irijanto, T. T. (2022). The creative industries effects on economic performance in the time of pandemic. International Journal of Ethics and Systems. https://doi.org/10.1108/ijoes-10-2021-0199
Bressanelli, G., Adrodegari, F., Pigosso, D., & Parida, V. (2022). Towards the Smart Circular Economy Paradigm: A Definition, Conceptualization, and Research Agenda. Sustainability. https://doi.org/10.3390/su14094960
Cagno, E., Neri, A., Negri, M., Bassani, C. A., & Lampertico, T. (2021). The Role of Digital Technologies in Operationalizing the Circular Economy Transition: A Systematic Literature Review. Applied Sciences, 11, 3328. https://doi.org/10.3390/app11083328
Casciani, D., & D’Itria, E. (2024). Fostering Directions for Digital Technology Adoption in Sustainable and Circular Fashion: Toward the Circular Fashion-Tech Lab. In Systems (Vol. 12, Nomor 6). https://doi.org/10.3390/systems12060190
Cerisola, S., & Panzera, E. (2021). Cultural and Creative Cities and Regional Economic Efficiency: Context Conditions as Catalyzers of Cultural Vibrancy and Creative Economy. Sustainability. https://doi.org/10.3390/su13137150
Charnley, F., Knecht, F., Muenkel, H., Pletosu, D., Rickard, V., Sambonet, C., Schneider, M., & Zhang, C. (2022). Can Digital Technologies Increase Consumer Acceptance of Circular Business Models? The Case of Second Hand Fashion. In Sustainability (Vol. 14, Nomor 8). https://doi.org/10.3390/su14084589
Colombi, C., & D’Itria, E. (2023). Fashion Digital Transformation: Innovating Business Models toward Circular Economy and Sustainability. Sustainability, 15, 4942. https://doi.org/10.3390/su15064942
Damayanti, D., Wulandari, L. A., Bagaskoro, A., Rianjanu, A., & Wu, H.-S. (2021). Possibility Routes for Textile Recycling Technology. Polymers, 13. https://doi.org/10.3390/polym13213834
Dasgupta, R., & Clini, C. (2023). The cultural industries of India: an introduction. Cultural Trends, 32, 341–347. https://doi.org/10.1080/09548963.2023.2247368
Dey, P., Malesios, C., Chowdhury, S., Saha, K., Budhwar, P., & De, D. (2022). Adoption of circular economy practices in small and medium-sized enterprises: Evidence from Europe and the UK. International Journal of Production Economics. https://doi.org/10.1016/j.ijpe.2022.108496
Espinoza-Pérez, L., Espinoza-Pérez, A., & Vásquez, Ó. (2022). Exploring an alternative to the Chilean textile waste: A carbon footprint assessment of a textile recycling process. The Science of the total environment, 154542. https://doi.org/10.2139/ssrn.4002416
Fan, W., Wang, Y., Liu, R., Zou, J., Yu, X., Liu, Y., Zhi, C., & Meng, J. (2024). Textile production by additive manufacturing and textile waste recycling: a review. Environmental Chemistry Letters. https://doi.org/10.1007/s10311-024-01726-2
Fraga-Lamas, P., Lopes, S., & Fernández-Caramés, T. (2021). Green IoT and Edge AI as Key Technological Enablers for a Sustainable Digital Transition towards a Smart Circular Economy: An Industry 5.0 Use Case. Sensors (Basel, Switzerland), 21. https://doi.org/10.3390/s21175745
Gazzola, P., Grechi, D., Iliashenko, I., & Pezzetti, R. (2024). The evolution of digitainability in the fashion industry: a bibliometric analysis. Kybernetes, 53(13), 101–126. https://doi.org/10.1108/K-05-2024-1385
Gazzola, P., Pavione, E., Hillebrand, R., Vota, V., & Rosa, R. (2025). The Circular Economy and the Role of Technology in the Fashion Industry: A Comparison of Empirical Evidence. In Sustainability (Vol. 17, Nomor 7). https://doi.org/10.3390/su17073104
Henry, M., Bauwens, T., Hekkert, M., & Kirchherr, J. (2020). A typology of circular start-ups: An Analysis of 128 circular business models. Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2019.118528
Huynh, P. (2021). “Enabling circular business models in the fashion industry: the role of digital innovation.” International Journal of Productivity and Performance Management. https://doi.org/10.1108/ijppm-12-2020-0683
Kalfas, D., Kalogiannidis, S., Ambas, V., & Chatzitheodoridis, F. (2024). Contribution of the Cultural and Creative Industries to Regional Development and Revitalization: A European Perspective. Urban Science. https://doi.org/10.3390/urbansci8020039
Kayikci, Y., Kazancoglu, Y., Gozacan-Chase, N., Lafci, C., & Batista, L. (2022). Assessing smart circular supply chain readiness and maturity level of small and medium-sized enterprises. Journal of Business Research, 149, 375–392. https://doi.org/https://doi.org/10.1016/j.jbusres.2022.05.042
Khan, S., Piprani, A. Z., & Yu, Z. (2022). Digital technology and circular economy practices: future of supply chains. Operations Management Research, 1–13. https://doi.org/10.1007/s12063-021-00247-3
Kim, Y., Lavanga, M., Brandellero, A., & Hill, A. (2025). OrchestOrchestrating Circular Fashion in the Productive City: A Digital Platform Ecosystem Framework. Urban Planning, 10. https://doi.org/10.17645/up.10098
Klein, M., Gutowski, P., Gerlitz, L., & Gutowska, E. (2021). Creative and Culture Industry in Baltic Sea Region Condition and Future. Sustainability, 13, 4239. https://doi.org/10.3390/su13084239
Kristoffersen, E., Blomsma, F., Mikalef, P., & Li, J. (2020). The smart circular economy: A digital-enabled circular strategies framework for manufacturing companies. Journal of Business Research. https://doi.org/10.1016/j.jbusres.2020.07.044
Liu, L., Song, W., & Liu, Y. (2023). Leveraging digital capabilities toward a circular economy: Reinforcing sustainable supply chain management with Industry 4.0 technologies. Computers & Industrial Engineering, 178, 109113. https://doi.org/https://doi.org/10.1016/j.cie.2023.109113
Liu, Q., Trevisan, A. H., Yang, M., & Mascarenhas, J. (2022). A framework of digital technologies for the circular economy: Digital functions and mechanisms. Business Strategy and the Environment. https://doi.org/10.1002/bse.3015
Luoma, P., Penttinen, E., Tapio, P., & Toppinen, A. (2023). Paradoxical tensions in exploiting data to implement circular economy in the textile industry. Ambio, 52. https://doi.org/10.1007/s13280-023-01865-w
Manioudis, M., & Angelakis, A. (2023). Creative Economy and Sustainable Regional Growth: Lessons from the Implementation of Entrepreneurial Discovery Process at the Regional Level. Sustainability. https://doi.org/10.3390/su15097681
Martikkala, A., Mayanti, B., Helo, P., Lobov, A., & Ituarte, I. F. (2023). Smart textile waste collection system – Dynamic route optimization with IoT. Journal of Environmental Management, 335, 117548. https://doi.org/https://doi.org/10.1016/j.jenvman.2023.117548
Neri, A., Negri, M., Cagno, E., Franzò, S., Kumar, V., Lampertico, T., & Bassani, C. A. (2023). The role of digital technologies in supporting the implementation of circular economy practices by industrial small and medium enterprises. Business Strategy and the Environment, 32(7), 4693–4718. https://doi.org/https://doi.org/10.1002/bse.3388
Neri, A., Negri, M., Cagno, E., Kumar, V., & Garza-Reyes, J. A. (2023). What digital-enabled dynamic capabilities support the circular economy? A multiple case study approach. Business Strategy and the Environment, 32(7), 5083–5101. https://doi.org/https://doi.org/10.1002/bse.3409
Ngoc, H., Doan, T., Long, P., & Binh, T. (2024). Relationship between state, market and society in management and development of science and technology in Vietnam. Edelweiss Applied Science and Technology, 8, 2038–2054. https://doi.org/10.55214/25768484.v8i5.1948
Nisa, H., Van Amber, R., English, J., Islam, S., McCorkill, G., & Alavi, A. (2025). A Systematic Review of Reimagining Fashion and Textiles Sustainability with AI: A Circular Economy Approach. Applied Sciences. https://doi.org/10.3390/app15105691
Oliveira Neto, G. C., Pinto, L. F., de Silva, D., Rodrigues, F. L., Flausino, F. R., & Oliveira, D. E. (2023). Industry 4.0 Technologies Promote Micro-Level Circular Economy but Neglect Strong Sustainability in Textile Industry. In Sustainability (Vol. 15, Nomor 14). https://doi.org/10.3390/su151411076
Ostermann, C., Nascimento, L., & Silva, A. (2019). Business Model Innovation for Circular Economy: A Fashion Industry Perspective.
Pletsan, K., Havryliuk, A., Kostromina, H., Muratova, I., & Kholodynska, S. (2022). The Modern Practice of Creative Industries’ Functioning under the Conditions of Sustainable Development. WSEAS TRANSACTIONS ON ENVIRONMENT AND DEVELOPMENT. https://doi.org/10.37394/232015.2022.18.35
Rusch, M., Schöggl, J., & Baumgartner, R. (2021). Application of digital technologies for sustainable product management in a circular economy – a review. Business Strategy and the Environment. https://doi.org/10.31235/osf.io/twgks
Sahu, A., Agrawal, S., & Kumar, G. (2021). Integrating Industry 4.0 and circular economy: a review. J. Enterp. Inf. Manag., 35, 885–917. https://doi.org/10.1108/jeim-11-2020-0465
Sardianou, E., & Briana, M. (2025). Platform-Driven Sustainability in E-Commerce: Consumer Behavior Toward Recycled Fashion. In Recycling (Vol. 10, Nomor 4). https://doi.org/10.3390/recycling10040161
Schmutz, M., & Som, C. (2022). Identifying the potential for circularity of industrial textile waste generated within Swiss companies. Resources, Conservation and Recycling. https://doi.org/10.1016/j.resconrec.2021.106132
Schöggl, J.-P., Rusch, M., Stumpf, L., & Baumgartner, R. J. (2023). Implementation of digital technologies for a circular economy and sustainability management in the manufacturing sector. Sustainable Production and Consumption, 35, 401–420. https://doi.org/https://doi.org/10.1016/j.spc.2022.11.012
Shirvanimoghaddam, K., Motamed, B., Ramakrishna, S., & Naebe, M. (2020). Death by waste: Fashion and textile circular economy case. The Science of the total environment, 718, 137317. https://doi.org/10.1016/j.scitotenv.2020.137317
Sjödin, D., Parida, V., & Kohtamäki, M. (2023). Artificial intelligence enabling circular business model innovation in digital servitization: Conceptualizing dynamic capabilities, AI capacities, business models and effects. Technological Forecasting and Social Change, 197, 122903. https://doi.org/https://doi.org/10.1016/j.techfore.2023.122903
Stumpf, L., Schöggl, J., & Baumgartner, R. (2021). Climbing up the circularity ladder? – A mixed-methods analysis of circular economy in business practice. Journal of Cleaner Production, 316, 128158. https://doi.org/10.1016/j.jclepro.2021.128158
Suchek, N., Fernandes, C., Kraus, S., Filser, M., & Sjögrén, H. (2021). Innovation and the circular economy: A systematic literature review. Business Strategy and the Environment. https://doi.org/10.1002/bse.2834
Tsai, P.-F., & Yuan, S.-M. (2025). Using Infrared Raman Spectroscopy with Machine Learning and Deep Learning as an Automatic Textile-Sorting Technology for Waste Textiles. In Sensors (Vol. 25, Nomor 1). https://doi.org/10.3390/s25010057
Tutore, I., Parmentola, A., Di Fiore, M. C., & Calza, F. (2024). A conceptual model of artificial intelligence effects on circular economy actions. Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.2827
Wagaw, T., & Babu, K. (2023). Textile Waste Recycling: A Need for a Stringent Paradigm Shift. AATCC Journal of Research, 10, 376–385. https://doi.org/10.1177/24723444231188342
Wiegand, T., & Wynn, M. (2023). Sustainability, the Circular Economy and Digitalisation in the German Textile and Clothing Industry. In Sustainability (Vol. 15, Nomor 11). https://doi.org/10.3390/su15119111
Wiegand, T., & Wynn, M. (2024). Circularity and Digitalisation in German Textile Manufacturing: Towards a Blueprint for Strategy Development and Implementation. In Processes (Vol. 12, Nomor 12). https://doi.org/10.3390/pr12122697
Wynn, M., & Jones, P. (2022). Digital Technology Deployment and the Circular Economy. Sustainability. https://doi.org/10.3390/su14159077
Zhang, Q., Ullah, A., Ashraf, S., & Abdullah, M. (2024). Synergistic Impact of Internet of Things and Big-Data-Driven Supply Chain on Sustainable Firm Performance. In Sustainability (Vol. 16, Nomor 13). https://doi.org/10.3390/su16135717
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Ni Made Ria Kurniasih Astuty
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
