Circular economy to enhance sustainability of small and medium sized enterprises

Abstract

The circular economy (CE) represents a major paradigm shift of moving from the concepts of linear to circular supply chains across multiple industries. Although some aspects of CE adoption within industrial supply chains have been extensively researched (particularly addressing challenges of design, implementation and operations), the research that relates CE practices with sustainability performance to reveal the current state of CE practices within small and medium sized enterprises (SMEs) is scant. The overarching aim of this research is to facilitate SMEs to achieve greater sustainability through CE implementation. This research addresses three research questions: How are CE fields of action related to sustainability performance? What are the issues, challenges and opportunities of adopting circular economy in SMEs? What key strategies, resources and competences facilitate effective implementation of a circular economy in SMEs? This study adopts a mixed-methods approach (qualitative and quantitative) using survey research, focus group and case studies. One hundred thirty randomly selected SMEs within the Midlands of the UK were surveyed, and the survey responses were analysed using statistical tools (structural equation modelling) along with findings from focus groups and case studies to answer the research questions. The study reveals that all the circular economy fields of action (take, make, distribute, use and recover) of SMEs are correlated to economic performance but only make and use are related to environmental and social performance. The study further derives strategies, resources and competences for achieving sustainability across all the CE fields of action. Additionally, this research reveals the issues and challenges, strategies, resources, and competences required for implementing CE in SMEs.