When digital meets green: digital and circular practices among European start-ups and scale-ups

This article analyses the role of digital technologies and readiness on the adoption of reduce, recycle, and redesign practices, the so-called twin transition. Using the Flash Eurobarometer 486, we apply multivariate probit models to determine the drivers of circular economy practices among European SMEs. We find that the adoption of advanced digital technologies and the development of digital capabilities within the firm are linked with the three key actions of the circular economy. Scale-ups benefit largely from digitalisation when developing all circular economy practices, but start-ups benefit from digital technologies only in the redesign of their existing products. In regard to public policies, our results highlight the importance of supporting a competitive and dynamic market structure to facilitate the twin transition and drive the emergence of digitalised start-ups and scale-ups.