Exploring the Role of Digitalization as a Driver for the Adoption of Circular Economy Principles in Agrifood SMEs – An Interpretive Case Study

Purpose This research aims to investigate the role of digitalization in facilitating the integration of circular economy (CE) principles within a firm operating in the Italian agrifood sector. The study seeks to explore the evidence and effects emerging from the adoption of digital technologies in a small and medium enterprise (SME) operational setting. Design/methodology/approach An interpretative case study was conducted on an SME operating in the Italian agrifood sector. The selected firm is known to adopt a business model oriented towards circularity by using entirely digitized closed-loop hydroponic cultivation. Findings The findings reveal that the digitalization of the production process, supported by an integrated information system, enables optimizing the use and consumption of natural resources and minimizes waste during the production stage. Additionally, the authors observed that digitalization triggers a complex mechanism of interaction between various firm factors, market dynamics and forms of institutionalization, which are intrinsically intertwined with the concepts of sustainability and resilience in the agrifood sector. Originality/value From a theoretical point of view, the interpretive reading key – historically appropriate to embrace the complexity of the phenomena under study – can foster a deeper understanding of the dynamics underlying digitalization as an enabling factor to facilitating the adoption of CE principles in the agrifood sector. Regarding managerial implications, the study contributes to the debate on the importance of digital transition in the agrifood industry, which in the Italian context shows considerable resistance due, especially, to the size of the firms (mainly SMEs and micro) and managerial conservatism tradition.