Factors enabling Micro, Small and Medium enterprises within the manufacturing sector to adopt circular economy Interventions

Abstract

The South African manufacturing sector is strategic to the country’s economic recovery and future development. In the value chains, the sector is located centrally in such a way that it can influence both down-production processes and upstream-consumption processes. Hence, in this context, it is a suitable industry to lead the transformation to a circular economy. The manufacturing industry has been slow to adopt circular economy interventions, despite the many benefits of a circular economy. In addition, some have attributed the inability to adopt and implement such interventions and business models to barriers and challenges. The study investigated factors that could enable small, micro and medium enterprises (SMMEs) within the manufacturing sector to adopt a circular economy using a qualitative approach and semi-structured interviews to explore barriers and factors that could enable SMMEs to adopt circular economy interventions. From a socio-technical systems perspective, the study showed that most barriers, enablers and drivers for SMMEs to adopt circular economy interventions are related to the environment, specifically in the stakeholder dimension. As a result, the findings emphasise the government's critical role in creating an environment that supports circular economy adoption. Furthermore, the findings highlight the importance of collaboration with other stakeholders to acquire the necessary competencies and capabilities for implementing circular economy interventions. The findings have practical implications for both the industry and policymakers. This context calls for the government to balance its multiple roles as enablers and enforcers. In this context, without cohesion and synergy within the government spheres, the developed policies or lack of policy implementation could result in undesirable consequences that favour linear economy models. When considering circular economy initiatives, managers should realize that circular economy is not an individual company’s initiative but requires the involvement of all stakeholders, including those external to the business. Thus, to fill the existing capability holes, they should consider collaborating with multiple stakeholders for complementary support.