Assessing the potential of the circular economy as a driver of regional innovation development

Abstract

At the current stage of development, when regions are facing global environmental challenges and accelerated digital transformation of the economy, the implementation of the circular economy as an effective tool for sustainable development and stimulation of innovation is of particular importance.

The purpose of the study is to provide a theoretical justification and practical assessment of the potential of the circular economy as a factor in stimulating innovative development in regions, as well as to develop recommendations for strengthening its impact on the formation of a competitive regional environment.

The research methods included a systematic analysis of scientific literature, methods of generalization and comparison, as well as the construction of an integral indicator for assessing the potential of the circular economy based on key indicators (resource efficiency, recycling rate, investment in eco-technologies, innovative activity of enterprises, and employment in the green economy).

It is shown that the circular economy is a powerful driver of regional innovation, contributing to the competitiveness of territories and the creation of «green» jobs. The integrated indicator of the circular economy potential of the Lviv region is estimated at 2.4 (average level of development), which indicates the existence of a basis for the implementation of circular models and the need to intensify investment and innovation activities.  It has been established that the development of the circular economy in Ukraine is limited by insufficient infrastructure, lack of funding, and low innovation activity of enterprises, while effective implementation requires a comprehensive approach combining government programs, financial incentives, the Quadruple Helix model, and digital tools for resource monitoring, smart contracts, Big Data, and resource sharing platforms.

It is concluded that the circular economy can become a key factor in sustainable regional development, increasing innovation potential and competitiveness. Further research should focus on modeling the economic (growth of regional GDP, increased investment activity, creation of new jobs) and social effects of implementing circular models (improvement of environmental conditions, improvement of the quality of life of the population, expansion of opportunities for community participation in green initiatives), the development of regional support policies, and the improvement of institutional mechanisms for interaction between government, business, science, and the community.