The digital circular economy changes how businesses and societies regard sustainability and resource management. It mixes the power and sophistication of digital interfaces with the efficiency that characterizes an open model, while still being founded on circular economy principles which demand collaboration across stakeholders to make sustainable innovation happen. Even though the potential of the digital circular economy is huge, it comes with challenges such as a lack of awareness among citizens and companies of sustainable practices and insufficient sorting infrastructure for packaging waste including policy hurdles, etc. This paper identifies several hurdles in adopting a digital circular economy and presents a strategy that includes education, policy reform, as well as investment into digital infrastructure to help overcome these obstacles. But even more importantly, it underlines the significance of engaging stakeholders in an open innovation process that brings about value and system change. Ultimately, the article advocates a comprehensive model for deploying digital technologies that incorporate stakeholder engagement to enhance sustainable innovation for future resilience.