Industry 4.0 as an Enabler of Circular Business Models: Within the clothing industry

Abstract: This study investigates the role of Industry 4.0 as an enabler of circular business models within the clothing industry. The research was conducted based on a thorough investigation of the clothing industry through both an ethnographic content analysis and two interviews. Both the concepts of circular business models and Industry 4.0 are relatively new and more importantly, Industry 4.0 is a concept that is not fully developed as it is still underway. The research was, therefore, meaningful in order to contribute to a more complete understanding of what the current status of development is and where there is yet unrealized potential. The findings suggest that clothing companies are aware of the role of Industry 4.0 technologies as enablers of the circular economy. However, the implementation of the technologies is not very widespread yet in the industry. Consumer behavior, financial limits and company perception and knowledge of the technologies are important factors currently hindering the implementation. Meanwhile, circular business models are associated with high cost savings as they will imply that the companies no longer need to extract resources. For this reason, the circular business models are also desirable for companies as it will likely be a solution to urgent environmental issues. While many clothing companies are currently developing circular business models and implementing Industry 4.0 technologies, there is still unrealized potential in how the technologies are used to facilitate and define the development of circular business models.