With the internal support of e.g., top management and external support by e.g., politics, SMEs will not only be able to contribute to society and the environment but also benefit from an increased image, cost reduction, business growth, and higher productivity.
How are micro-enterprises especially fit to adapt to circular business practices?
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 (Rizos et al., 2016). Among the enablers that SMEs mentioned, these are the most important ones: company environmental culture, networking, support from demand network, financially attractive business models, external recognition (i.e., awards and prizes), personal knowledge of individuals within the company, and government support (Rizos et al., 2016). The successful implementation of the circular economy will depend on a number of factors: External factors include public policy, market conditions, technological development, and stakeholders, whereas internal factors are the firm’s resources, capabilities and competencies (Prieto-Sandoval et al., 2018).
If SMEs are able to make use of these enablers, several benefits and opportunities for SMEs arise, e.g., increased image, cost reduction, business growth, higher productivity, recovery of the environment through reduced CO2 emission, and greater sustainability (Prieto-Sandoval et al., 2018). There are strategies across several fields of actions (take, make, distribute, use, and recover) of the circular economy that SMEs can engage in (Prieto-Sandoval et al.,2018; Dey et al., 2020). Activities that SMEs in the EU usually undertake are waste minimization, replanning of energy use, redesigning products and services, using renewable energy, and water usage (Katz-Gerro and Sintas, 2018).