Innovation for Sustainability: the Role of Digital Circular Economy in Driving Organizational Efficiency and Sustainable Development

Abstract

This paper explores the critical relationship between innovation and sustainability, emphasizing the role of the digital circular economy (DCE) in advancing sustainability goals. Sustainability, defined by its environmental, social, and economic dimensions, requires an integrated, interdisciplinary approach to address global challenges. Innovation serves as a key driver in this process, enabling businesses to adapt their models, processes, and products to meet sustainability objectives. By integrating sustainability into organizational strategies and governance frameworks, firms can enhance operational efficiency and long-term competitiveness while minimizing environmental impact. The paper highlights the importance of sustainable innovation governance, which aligns organizational goals with broader sustainability objectives through effective policies and practices. Additionally, it explores how digital technologies within the circular economy (CE) facilitate resource efficiency, reduce waste, and support closed-loop systems that contribute to sustainable development. This study addresses sustainability and innovation in terms of organizational processes, strategies, and business models, drawing on literature to assess their impact. The theoretical framework evaluates both past studies and the implications of adopting digital circular practices, offering insights and recommendations for future business sustainability initiatives. © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2025.