Unveiling the twin transition in ecosystems: strategies and tensions

The transition to a circular economy demands collaborative structures and requires ecosystem-level transformation. Similarly, digital transformation requires a perspective that extends beyond organizational boundaries. The convergence of these two transformation paradigms (i.e. green and digital) constitutes what scholars refer to as the twin transition. While previous studies have highlighted the potential of digital technologies to accelerate circularity in ecosystems and demonstrated their role in enhancing circularity, it is also crucial to examine the bright and the dark side of the twin transition. Building on case studies that consider the perspectives of diverse actors within two packaging recycling ecosystems, this study investigates how firms use digital technologies to pursue circularity. Based on these findings, we develop a theoretical framework of the twin transition in ecosystems that identifies the ecosystem strategies employed by actors and the tensions that emerge among participants. More specifically, we identify four ecosystem strategies: 1. Twin offering strategy; 2. Twin flow strategy; 3. Twin engagement strategy; and 4. Twin justice strategy. These strategies extend beyond the isolated actions of the focal firm and reveal how multiple ecosystem members coordinate activities, resources, and relationships to generate value from both circular and digital perspectives. When these strategies are not successfully implemented or coherently combined across the ecosystem, tensions emerge that not only limit the effectiveness of individual strategies but may also hinder the overall transformation process by creating misalignments between digital and circular dimensions.