Exploring Circular Business Models and Digital Technology Adoption in the Sardinian Textile Sector: A Multiple-Case Study Approach

The textile sector faces significant sustainability challenges, prompting firms to innovate their business models and transition towards circular business models (CBMs). Digital technologies may support this transition through improved traceability, resource management, and production processes. The literature focused on larger firms and overlooked those practices in Micro-Small Entreprises (MSEs). With the aim to fill this gap, this study explores how circular practices are integrated into the BM of Sardinian textile sector firms (mainly composed of artisanal MSEs) as a key component of their sustainability transition and the role of digital technologies in supporting these processes. Using a multiple-case study approach, the research analyses four firms operating within a traditional artisanal textile context characterised by strong territorial embeddedness. The results show that circularity is implemented unevenly, with slowing and narrowing strategies more developed than closing one. Firms combine traditional production logics with selective technological innovation, generating hybrid configurations that balance cultural preservation and production efficiency to achieve sustainability. In this context, digital technologies play an enabling role without radically transforming their BM. The study contributes to the literature by showing how sustainability transitions within artisanal MSEs are shaped not only by technological capabilities but also by relational, cultural, and organizational factors embedded within local production systems.