Shedding light on the preconditions for circular economy: Evidence from SMEs in the agri-food sector

Despite the EU's commitment to promoting the transition towards the circular economy (CE), implementation continues to face significant constraints within small firms, which represent 99% of all EU businesses. This study deals with the implementation of CE in SMEs to understand their perceptions of CE and assess the firm-level features obstructing transition. We present evidence from 58 interviews with 37 Italian agri-food firms. Evi dence suggests a dichotomy between larger SMEs, which implement CE to pursue eco nomic advantages, and smaller ones. Overall, a lack of a strategic approach to CE emerges, as well as several obstacles to circular transition (e.g., lack of technical expertise, effective networks and practical guidance). Our findings suggest the importance of (i) disseminat ing accounting and measurement tools among SMEs, (ii) working to create circular net works, and (iii) developing tailor-made guidance.