Global Digital Circular Economy Market 2024-2031

Global Digital Circular Economy Market 2024-2031

Digital Circular Economy Market Size, Share & Trends Analysis Report by Offering (Software, and Services), by Technology (Blockchain And Distributed Ledger Technology (DLT), IoT, AI & ML, AR and VR, VR-Based Training, Cloud Computing, Big Data Analytics, and Others) by Application (Supply Chain And Materials Tracking, Resource Optimization And Efficiency, Digital Resale And Reuse, Reverse Logistics And Remanufacturing, and Others), and by Vertical (Consumer Electronics, IT, Automotive, Manufacturing, Construction, Building Demolition and Deconstruction, Healthcare, Energy, and Fashion) Forecast Period (2024-2031)

Digital circular economy market is anticipated to grow at a CAGR of 24.1% during the forecast period (2024-2031). The global digital circular economy market is expanding owing to rising environmental awareness, rising adoption of digital technologies, favorable government regulations, and consumer demand for eco-friendly products and services.

Market Dynamics

Digital technology innovation and adoption

The global digital circular economy market relies on the adoption and innovation of digital technologies such as blockchain, IoT, and big data analytics for sustainability and circularity. The growing adoption of digital technologies globally is a key factor driving the global digital circular economy market.

In February 2023, INSEAD launched its inaugural Strategies for a Circular Economy – Online program, delivered by Emeritus. The program, which focuses on circular sustainability strategy and roadmap implementation, consists of five modules delivered via online video lectures, accompanied by case studies, self-study activities, discussions, and live faculty sessions. Such developments are further aiding the global market growth.

Market demand and consumer preference

The growing demand for sustainable products necessitates companies to adopt responsible design and production practices, making digital circular economy solutions crucial for competitiveness and environmental sustainability. For instance, in November 2021, SAP launched SAP Responsible Design and Production, a software solution for sustainable product design and transitioning to a circular economy. The solution helps businesses increase measurement and data management capabilities, enabling brands to accelerate their transition to circular practices and comply with regulations, particularly in product packaging and plastics.

Market Segmentation

Based on the offering, the market is segmented into software and services.

Based on technology, the market is segmented into blockchain and distributed ledger technology (DLT), IoT, AI and ML, AR and VR, VR-based training, cloud computing, big data analytics, and others (robotic process automation (RPA)).

Based on application, the market is segmented into supply chain and materials tracking, resource optimization and efficiency, digital resale and reuse, reverse logistics and remanufacturing, circular economy reporting and compliance, circular waste management and recycling, smart material selection & testing, and others (product lifecycle management).

Based on vertical, the market is segmented into consumer electronics, IT & telecom, automotive, manufacturing, construction and building, building demolition and deconstruction, healthcare and medical devices, energy & utilities, and fashion & apparel.

Services are Projected to Emerge as the Largest Segment

The primary factor supporting the segment's growth includes regulatory pressures that promote businesses to adopt circular economy practices, with governments incentivizing waste reduction, recycling, and sustainable production processes globally. For instance, in December 2023, Circular Services acquired Midwest Fiber Recycling, expanding its materials recovery facilities under Balcones Recycling. The move expands Circular Services' Midwest recycling services, supporting existing infrastructure and increasing material recovery into domestic supply chains. The acquisition aligns with the US's increasing focus on zero-waste goals and climate risks.

IT & Telecom Sub-segment to Hold a Considerable Market Share

The demand for sustainable technology solutions is on the rise due to growing environmental concerns, particularly in the IT and telecom industries. For instance, in February 2024, Orange Business in France introduced a Circular Mobility solution, offering equipment, connectivity, financing, and Orange Reprise services, including sustainable mobile phones, leasing, and data plans, all AFNOR-certified.

Regional Outlook

The digital circular economy market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

Rapid Urbanization in the Asia-Pacific Region

India's rapid urbanization is necessitating the adoption of circular economy principles and digital technologies for efficient urban development. According to the India Brand Equity Foundation (IBEF), in May 2023, the circular economy promotes economic growth by promoting reuse, recycling, refurbishing, and remanufacturing, reducing dependency on finite resources, and encouraging responsible use. India, with a population of 1.3 billion, can benefit from this strategy, reducing congestion and pollution, and promoting sustainable development.

Europe Holds Major Market Share in Global Market

The EU promotes circular economy innovation and entrepreneurship by providing funding, mentorship, and support networks for digital startups and technology companies to develop and scale solutions. For instance, in April 2024, the EU established the EU Circular Economy Resource Centre and launched the SWITCH to Circular Economy in East and Southern Africa program, both aimed at accelerating the global transition towards a circular economy. During 2021-2023, the EU has dedicated approximately €1.6 billion ($1.7 billion) to more than 75 initiatives that contribute to supporting the transition to a circular economy at various levels - country, regional, and global. Moreover, in 2023 alone, more than 100 partner countries have received EU assistance to facilitate the adoption of circular practices in their economies.

The major companies serving the digital circular economy market include Accenture PLC, Cisco Systems, Inc., Dell Technologies, Inc., IBM Corp., and SAP SE, among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers and acquisitions to stay competitive in the market. For instance, in October 2022, Avataar Venture Partnered launched a $350.0 million fund focusing on the circular economy, a technology that mirrors the natural world's cycles, aiming to repurpose, recycle, repair, and remake, benefiting both companies and the environment.