Are the Small- and Medium-Sized Enterprises in Developing Countries Ready to Implement Circular Economy Practices? An Empirical Quest for Key Readiness Factors

Abstract

While most of the circular economy (CE) research is engrossed in larger organizations and developed countries, there is hardly any research exploring the readiness of small- and medium-sized enterprises (SMEs) in developing countries toward the implementation of CE practices. To fill this knowledge gap, in this article, we aim to identify and evaluate the key readiness factors (RFs) that are vital for CE implementation. Initially, 15 important RFs are identified via an extensive literature review and experts’ consultation, which are prioritized using the Decision-Making Trial and Evaluation Laboratory method. The proposed framework is validated with a real-world case study involving four India-based SMEs. The results reveal that “ <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">willingness of top management to implement CE practices”</i> is the most important RF. Six RFs are classified as causal: “ <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">availing financial assistance from government and external agencies,” “introducing new technology and its compatibility with existing technology,” “willingness of top management to implement CE practices,” “investment in infrastructural development,” “pressures from competitors, business partners, and regulatory bodies to implement CE practices,” and “awareness among the customers about CE benefits.”</i> The findings of this research may help managers assess CE readiness and prepare business strategies for effective implementation of CE practices.