Enablers and Barriers of Implementing Circular Economy for Micro and Small Manufacturing Enterprises (M-MSEs) in West Sumatera

Abstract

This study aims to analyze the barriers and enablers to implementing a circular economy (CE) at M-MSEs in West Sumatera, identify M-MSEs in West Sumatera that can implement a circular economy, and identify the influencing factors. Questionnaire were distributed to 110 respondents from several M-MSEs in West Sumatera, Indonesia, from March to September 2022. Descriptive analysis and Pearson Correlation was employed in data analysis, and result showed that several CE practices have been implemented by M-MSEs in West Sumatra, thus supporting the notion that CE implies a systemic approach to increasing firm value. In particular, resource-efficient production processes have been widely implemented, namely 36%; this achievement is undoubtedly relatively high compared to the rarity of M-MSEs, which use residual materials in the production process. The most significant barrier to implementing CE that employers feel is the lack of financial support in implementing CE. However, companies that have started implementing CE see it as a business enabler rather than a cost, so CE can be an added value and innovation of the products they produce.