Diving into emerging economies bottleneck: Industry 4.0 and implications for circular economy

In this paper, the authors aim to explore the relationship between the concepts of Industry 4.0 and circular economy (CE) as a contribution to the management decision on emerging countries. By analyzing the trends of scientific production to ascertain the interface of both constructs, the purpose of this paper is to identify limitations for Industry 4.0 and CE implementation in Brazil, as well to present an original framework and strategic pathways to overcome limitations for emerging countries.

Supported in the Brazilian case, the authors draw a framework using the structuralism approach to indicate pathways for the strategic positioning of emerging economies that consider their limitation and potential for competitive advantage. By understanding country-related limitations such as social and economic contingencies, the authors conceive a structure of implications for Brazil’s capacity to develop CE in the digital era.

Results show that Brazil has a reasonable, institutional and stable environment, as well as strong regulatory policies for solid waste that can stimulate CE in the country. However, it requires more communication between actors, especially public and private institutions, performing long-range relationships. Also, the country requires consolidation of industrial policies and investments in the remanufacturing process in the supply chain. Likewise, despite Brazil’s ability to take advantage of CE’s benefits, the country presents a huge lack of qualification to fulfill the competences that the digitization process demands. Economically, Brazil has been fighting against an economic crisis since 2014 that has limited general investments, especially in the industrial sector. Industry presents low performance and decreasing GDP participation, which leads to constant overseas production transfer as a consequence of the workforce’s high costs.

The authors can affirm that Brazil is far behind developed countries in searching for the capacity to provide CE through technological industrial change. The main problems are related to the lack of articulation of public and private spheres to promote new digital business models. Therefore, the structured framework enables managers and public agents to provide solutions and to properly address supply chain bottlenecks in emerging economies.

Exploring the relationship between the concepts of Industry 4.0 and CE through the specific lens of the structuralist method, this work can contribute to the management decision on emerging countries, looking into four important perspectives: political, economic, social and technological.