Circular economy in Italian SMEs: A multi-method study

Abstract

Climate change, population growth, and current rate of consumption at global scale have prompted academic and business communities to challenge the current models of production towards more circular approaches. This study aims at understanding what actions small and medium-sized enterprises (SMEs) are taking to meet the challenges and opportunities of the circular economy (CE), analysing actions, barriers, enablers and the connection between CE, business strategy and performance. This research involved 254 Italian SMEs through a multi-method approach, including interviews, surveys, and focus groups. Twenty different CE practices related to waste management, packaging, supply chain and product/process design have been explored. The results show that several CE practices are simultaneously implemented by SMEs, thus supporting the notion that CE implies a systemic approach to company’s value creation. In particular, waste management was widely applied (e.g. separated waste collection was carried out by 84% of the companies surveyed), while resource saving practices were implemented by only 14% of the sample. Higher costs are the main barrier to CE for early adopters (5.13 on a 7-point Likert-type scale). However, companies implementing CE practices perceive them as a business opportunity rather than a cost, thus showing that CE may represent a source of value creation for companies, particularly SMEs. • The study involved 254 Italian SMEs through interviews, surveys, and focus groups. • Actions taken by SMEs to meet challenges and opportunities of CE are investigated. • CE Practices focused on waste management, packaging, supply chain and design. • Sustainability results an opportunity rather than a cost for CE-oriented firms. • Business opportunities emerge from the development of new value chains within CE.