Developing a circular economy: An examination of SME’s role in India

Abstract

In a large developing country such as India where much of the small and medium enterprise (SME) sector is not yet fully organized and often receives limited support through government improvement programs, the journey to become integrated into a circular economy (CE) may seem impossible. This paper describes the foundations for establishing a CE in SMEs in India based on a culture that focuses on less waste more recycling, reusing, repurposing and repairing of parts and products. But much of this is done in an unorganized and informal way, without a long-term vision or strategy in place. We draw on the socio-technical system (STS) theory to explain how social, technical and environmental features influence CE. Based on a qualitative inquiry, we provide evidence from four exemplar SME companies in their transition to a CE covering issues such as motivation, strategy/practices and the challenges/hurdles faced. Using micro-level insights from STS theory, we then elaborate on various enablers and drivers that can be adopted by managers, policy-makers and industry associations in helping SMEs move toward a CE paradigm.