Adoption of Circular Economy: A Case Study of SMEs in Visakhapatnam, India

The flow of materials and products in a linear process is no longer sustainable and puts cost pressure on supply chains. Hence, a plethora of literature has emerged on Circular Economy (CE) practices to drive value in business processes. Accordingly, sustainability and resilience have gained prominence and became a key topic in academic literature. While there is ample research on CE practices in Europe and China, it is slowly progressing in India and needs significant attention. Despite several challenges like poor infrastructure and limited resources, Small and Medium-sized Enterprises (SMEs) in India contribute about 21% to the GDP. Hence, this paper attempts to fill the current knowledge gap by studying SMEs and attempts to understand the key factors required for sustainable businesses by applying CE principles. The study underscores the importance of embracing circular practices by examining SMEs and exploring how adopting CE can enhance organizational resilience. To that end, a case study approach was adopted with six SMEs in the manufacturing sector. By understanding and exploring CE through the case studies, the analysis contributed to the current discussion around the potential challenges in adopting CE, the need to tackle the environmental crisis and exploring re-engineering processes and sustainable product designs. The results indicate that most of these SMEs are less committed to environmental issues because of a lack of awareness of CE principles. This study opens several avenues for future research in other industries and regions within India.