Circular transition of SMEs through Digital Twins in the Baltic Sea region
The transition towards Circular Economy is challenging for Small and Medium Enterprises (SMEs) due to resource and capability constraints. CIRC-2-ZERO (2025-2027), an Interreg Baltic Sea Region project, tackles this issue through the development of a Digital Twin Demo Platform, enabling SMEs to simulate and optimize their processes for circularity.
The project will leverage this technology to provide tested solutions for circular product design and value chain optimization, accelerating decarbonization and enhancing advanced manufacturing capabilities in SMEs. The project outcomes will contribute to reducing waste, conserving resources, and mitigating climate change.
“We are excited to collaborate with expert organizations from the Baltic Sea Region. The CIRC-2-ZERO project enables us to support the circularity of SMEs leveraging on transnational best practices that will contribute to the long-term sustainable development and competitiveness of SMEs and their supply chains beyond borders”, Patricia Garcia.
The project comprises a partnership of 13 organizations with unique and complementary competences from 7 countries in the Baltic Sea Region. Each country will establish a Resilience Transformation Hub (RTH) to facilitate exchange of best practices and enable learning opportunities. The network of RTHs will contribute to the effective and coordinated scaling of the developed solutions, promoting the widespread adoption of Circular Economy principles through a unified strategy. This collaborative approach ensures the transnational value and long-term impact of the CIRC-2-ZERO project.
Luleå University of Technology is the higher education and research institution participating from Sweden, formed by a multidisciplinary team from the Entrepreneurship and Innovation Reseach Subject – Vinit Parida, Patricia Garcia, Arun Madanaguli – and the Information System – Rasoul Habibipour –. The combination of industry knowledge and Living Lab expertise will strengthen the research outputs of Luleå University of Technology, leveraging the synergies across business and technical fields.
“Glad to see cooperation between Entrepreneurship and Innovation and Information System to drive multidisciplinary research that will support circularity transformation of SMEs in the region”, says Vinit Parida.
“The project CIRC-2-ZERO follows a Living Lab (LL) approach, emphasizing co-creation, real-world testing, and collaboration among stakeholders. The Information Systems research subject at LTU, through its Botnia Living Lab, has managed several international Living Lab projects, from which CIRC-2-ZERO will benefit by leveraging the accumulated learnings and experience. In this project, Living Lab plays an important role by providing SMEs with a supportive environment in which to innovate and adopt circular economy practices” says Rasoul Habibipour.
Digital Twins driving circularity in SMEs
“Digital twins hold immense potential in accelerating transition to circular economy by enabling simulation and rapid experimentation with the value chain with minimal impact on short term firm performance. Particularly in construction and manufacturing industries, digital twins can guide sustainable product design and value chain configurations”, says Arun Madanaguli.
Digital twins are digital models of real-life systems that enable decision-makers to simulate events and make decisions without negative impact. The Digital Twin Demo Platform developed in CIRC-2-ZERO will enhance digitalization by providing a virtual environment for SMEs to optimize circular product designs and value chains. It supports detailed simulations and analyses, enabling SMEs to identify opportunities for enhancing efficient development, testing, and refinement of products and supply chains. For instance, SMEs can enhance their product designs digitally, reducing time and expenses while producing environmentally friendly, economically feasible, and socially conscious products. In addition, it equips SMEs with tools to map supply chains, source sustainable materials, manage waste effectively, and optimize their entire value chain for circularity.
Designed to be applicable across firms and industrial contexts, the Digital Twin Demo Platform enhances harmonization of practices, scalability, and replication, thereby promoting innovation and sustainability on a broader level. Beyond environmental performance, SMEs will strengthen their competitive position in an increasingly eco-conscious market. By leveraging digitalization through a standardized framework, CIRC-2-ZERO will attract investment, create jobs, and stimulate economic growth in the participating regions.
Funding for the Circular Economy transition of SMEs
Driving Collaborative Innovation towards Decarbonization and Advanced Manufacturing in SMEs across the Baltic Sea Region, full title of CIRC-2-ZERO project, is co-funded by the European Union, Region Norrbotten and Region Västerbotten.
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