Integrating Knowledge Management Architectures for Circular Economy Transformation in Industry 4.0

ABSTRACT Although the importance of organizational knowledge for sustainability transitions is widely acknowledged, to date there is little research on how KM systems enable the adoption of CE strategies in Industry 4.0 environments. This study utilizes quantitative and qualitative data from 347 manufacturing firms across 18 countries, as well as 12 in‐depth case studies, to empirically investigate how firms leverage knowledge architectures to build sustainable competitive advantages in Circular Business Models (CBMs). Using structural equation modeling and fuzzy‐set methods, the empirical analysis finds exploitative‐analytical, explorative‐collaborative, and adaptive KM configurations to be operational for resource efficiency, radical innovation, and organizational transformation, respectively. Industry 4.0 technologies (including digital twins, blockchain traceability, and AI analytics) are found to improve the effectiveness of all three configurations of KM but do not seem to have the same influence over all forms of circularity. The Multi‐Level KM‐CE Integration Framework proposed in this study provides practitioners with a systematic tool to diagnose and align their KM capabilities, digital maturity, and circular economy (CE) objectives. An improved KM‐CE integration may result in important reductions of material consumption and waste, as well as a creation of new green jobs.