CHALLENGES OF THE INTRODUCTION OF CIRCULAR BUSINESS MODELS WITHIN RURAL SMES OF EU

Abstract

Recently, the circular economy has received considerable attention in discussions among policymakers, academics, and practitioners. It proposes addressing environmental and climate change challenges while simultaneously offering benefits for businesses. The circular economy promotes the reduction of consumption and the reuse or recycling of resources, which in many aspects contradicts traditional business models aimed at linear sales growth. However, although the circular economy concept has been widely discussed at the global level, there is still a lack of scientific discussion on the adoption of its principles at the business level. This paper conceptualizes the multi-level dimensions of the circular economy and highlights challenges related to the perception of its principles at the micro (business) level. The conducted research shows that rural SMEs in six EU countries have rarely heard about the circular economy and even less about circular business models. While rural SMEs are more familiar with the bio and green economies, which provide a good basis for developing circular business models, they remain reluctant to introduce new business models. This paper assesses the level of advancement in the adoption of circular business models among rural SMEs in EU countries. It emphasizes the circular economy as an integral part of the business models of rural SMEs and rural economies in the EU. The study also has policy implications, suggesting that governments should play an important role in promoting circular business models among rural SMEs. The existing public support system is fragmented and, in most cases, only incidentally encourages rural SMEs to adopt new circular business models. Moreover, the circular economy at the local level, especially in rural areas, plays an important role in ensuring the social well-being of local inhabitants. The methodological approach and research results presented in the paper can be used for further development of the EU support system and priorities beyond 2020.

Data:
Received: 1 Oct 2020
Revised: 12 Nov 2020
Accepted: 6 Dec 2020
Published: 20 Dec 2020