Innovation impact on the circular economy

The paper presents the arguments and counterarguments used in the scientific discussion on the issue of how innovations affect the circular economy and whether it changes accordingly. The main purpose is to analyze the extent to which EU member states manage to boost the circular economy through investment and employment. Review of literary sources and approaches for solving the problem of the multilateral and two-way impact of innovation on the circular economy indicates that the green economy could not exist without the development of innovation, but on the other hand they are its engine. Environmental practices show that there is a need to develop new business models taking into account functionally related innovative changes. The research methods and methodology covers the period from 2008 to 2018. The paper presents the results of an empirical analysis examining the extent to which EU member states manage to boost the circular economy through investment and employment, which showed that measures to increase their economic activity should be in line with the policy of attracting of investment in the circular economy. The research empirically confirms and proves that there still exist certain problems hindering the full implementation of the circular economy; and they are due to the consciousness of the population and employment opportunities in these areas, despite the efforts of the responsible institutions. The results of the research can be useful for public institutions dealing with the circular economy, as well as for the business sector.