Advancing circularity in manufacturing SMEs through digital servitization

Purpose This study aims to examine how digital servitization can help manufacturing small and medium-sized enterprises (SMEs) advance circularity in service ecosystems. Design/methodology/approach This qualitative study interviewed managers from 18 manufacturing SMEs in Norway to explore digital servitization and circularity in their service ecosystem. The interview data were analyzed using a Gioia-inspired approach consisting of inductive first-order codes followed by an abductive coding process based on current literature. Findings The empirical findings of this study indicate that manufacturing SMEs can advance service ecosystem circularity through digital servitization. A framework was developed illustrating three different pathways, navigating four identified enabling conditions for advancing circularity: service ecosystem adjustment; optimized resource utilization; collaborative resource focus; and smarter process management. Research limitations/implications The study examined Norwegian manufacturing SMEs, with other competing grounds that might not be comparable to countries outside Europe, such as different data security requirements, digitalization levels and economics. The study also emphasizes managerial focus, neglecting a broader focus on customers and intermediaries. Originality/value The paper offers insights into how manufacturing SMEs can advance service ecosystem circularity, responding to service ecosystem circularity requirements and emphasizing internal production processes. The study also emphasizes the importance of collaborating with service ecosystem actors on recycling, substituting and rethinking resources to close the loop eventually. This requires strategic planning and following circularity pathways suited for the SMEs’ resources, production, competencies and needs.