Circular economy transition: Exploiting innovative eco-design capabilities and customer involvement

This empirical socio-technical based study determines the role of customer involvement, design capabilities and sustainable competitive advantage/competitive advantage in the circular economy. The findings support the circular economy transition with exploitation of customer involvement moderating the exploitation of innovative eco-design capabilities for sustainable competitive advantage. The competitive advantage could further mediate design capabilities for sustainable development/sustainability performance. These satisfy the assertion that the circular economy is for competitiveness and sustainable development. It also fills the paucity of circular economy empirical transitional studies, supports the Twelfth Sustainable Development Goal of the United Nations, answers the debate whether the circular economy is pro-business and supports the rich theoretical and business case studies with empirical evidence. This study is anchored in the Theory of Absorptive Capacity and Resource-based View with Structural Equation Modelling. A total of 216 survey responses were analysed using SmartPLS software. Surprisingly, social performance displays the greatest coefficient of determination which represents the proportion of the variance for a dependent variable that is explained by its predictor constructs. The research model has a medium out-of-sample predictive power with sustainable competitive advantage as the key construct. Manufacturers should steer and accelerate towards circular economy for sustainable development.