The increasing adoption of cloud computing in collaborative manufacturing and service environments has raised significant concerns regarding data privacy and security. Ensuring secure data processing while maintaining usability is critical for organizations leveraging cloud and collaborative technologies. Privacy by Design (PbD) offers a structured framework for integrating privacy principles from the inception of cloud-based systems. In this context, Homomorphic Encryption (HE) emerges as a promising cryptographic approach, enabling secure computations on encrypted data without exposing sensitive information. This study presents a narrative review of recent research on PbD, Cloud Security Computing, and HE, emphasizing their applications in collaborative cloud environments. By analyzing primary sources from databases such as Web of Science and IEEE Xplore, this study highlights the role of PbD in safeguarding cloud-based manufacturing and service operations. The findings indicate that while PbD is increasingly applied to mitigate privacy risks, current implementations still face challenges in fully complying with privacy regulations and ensuring seamless integration into cloud-based collaboration frameworks. Future research should focus on optimizing HE for scalable, efficient deployment in industrial cloud ecosystems to enhance security and data privacy in collaborative digital infrastructures.