Implementation of Circular Economy Business Models by Small and Medium-Sized Enterprises (SMEs): Barriers and Enablers

By Vasileios Rizos, A. Behrens, W. Gaast, E. Hofman, Anastasia Ioannou, Terri Kafyeke, A. Flamos, Roberto Rinaldi, S. Papadelis, M. Hirschnitz-Garbers and 1 more. 2016

1,028 citations recorded by the source corpus.

Small and medium-sized enterprises (SMEs) are increasingly aware of the benefits of closing loops and improving resource efficiency, such as saving material costs, creating competitive advantages, and accessing new markets. At the same time, however, various barriers pose challenges to small businesses in their transition to a circular economy, namely a lack of financial resources and lack of technical skills. The aim of this paper is to increase knowledge and understanding about the barriers and enablers experienced by SMEs when implementing circular economy business models. Looking first at the barriers that prevent SMEs from realising the benefits of the circular economy, an investigation is carried out in the form of a literature review and an analysis of a sample of SME case studies that are featured on the GreenEcoNet EU-funded web platform. Several enabling factors that help SMEs adopt circular economy practices are then identified. The paper concludes that although various policy instruments are available to help SMEs incorporate circular economy principles into their business models, several barriers remain. The authors recommend that European and national policies strengthen their focus on greening consumer preferences, market value chains and company cultures, and support the recognition of SMEs’ green business models. This can be achieved through the creation of dedicated marketplaces and communities of practice, for example.

Subfields: Business and International Management, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/d3a86208370e1945854b027fa1b8caadfb9b6a4b

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Citations in the corpus

Learning from Failure and Success: The Challenges for Circular Economy Implementation in SMEs in an Emerging Economy (2021, background): “(2) Culture refers to the shared values, goals, and predominant attitudes within a company (manager and employees) [12,57].”
Assessment of Circular Economy within Portuguese Organizations (2018, background): “However, the organizations do not report many external pressures to adopt CE suggesting that supply chain partners and consumers still do not demand for “green suppliers” and “green products”, which has been reported as a major obstacle for CE adoption in previous researches [10,36,39,40] and might ”
Design for Circular Behaviour: Considering Users in a Circular Economy (2018, background): “One of the barriers to circular business models is the capital required to cover running costs, such as managing a reverse logistics network [69], therefore it may also be desirable that user behaviour helps to reduce these operating costs.”
Consumption in the Circular Economy: A Literature Review (2018, background): “[9] reported the same complaint from small and medium enterprises trying to move towards circular business models and solutions.”
Financial Resources for the Circular Economy: A Perspective from Businesses (2019, background): “regarding the definition and measurement of different characteristics of financial resources for the CE, although financial attractiveness can be considered today as a relevant aspect for the circular business model [16].”
Unlocking circular business: A framework of barriers and drivers (2019, methodology): “Lacking technical skills create challenges for identifying, assessing and implementing more advanced technical options (Rizos et al., 2016; Radamaekers et al., 2011; Trianni and Cango, 2012).”