Barriers to a circular economy in small- and medium-sized enterprises and their integration in a sustainable strategic management framework

Abstract

A circular economy limits the consumption of virgin resources, fosters cleaner production, and promotes the efficient utilization of resources. However, many companies still struggle with its implementation. In this study, we explore the barriers that companies encounter internally and externally when implementing circular economy measures. Based on 59 interviews with Swiss small- and medium-sized enterprise managers from three industries, we identify six company-internal barriers (risk aversion, short-term orientation, economically dominated thinking, unwillingness to engage in trade-offs, shortage of resources, and lack of knowledge) and four levels of company-external barriers (technology, market, legislative, and society and consumers). We further identify their interrelationships and integrate them into a holistic sustainable strategic management framework. Finally, we present six broader strategic recommendations building on the study framework.