The drivers of the circular economy: vs practice

The circular economy has become a model that is able to respond, with rather high economic efficiency, to the challenges that a society faces. The principles of a circular economy do not expand rapidly, though. Our study deals with the key drivers for closed-loop cycle production, including innovation, investment, digitalization, new business ecosystems, and institutional framework. To quantify the effects of circular economy, we used three indicators: production and consumption waste; GRP energy intensity; GRP water intensity. Given these indicators, the regions of Russia were clustered. Further, the hypothesis was tested that the innovative activity of organizations, investment in fixed assets, and digital technologies used by business, are among the key drivers towards a circular economy. Since this research is an exploratory one, we apply the method of General Regression Models (GRM). Our findings did not confirm that the identified factors serve as the drivers for transitioning to a circular economy. We attribute the discrepancy between the results of literature review and empirical findings to the lack of reliable data, difficulties in measurement, the latent nature of related drivers, as well as the relatively short period of transition towards a more circular economy.