Barriers to Engagement in Circular Business Models Among Small and Medium‐Sized Enterprises: Evidence From the Irish Construction, Manufacturing and Retail/Wholesale Sectors

Abstract

ABSTRACT Although circular business models (CBMs) are central to the circular economy (CE) transition, their adoption among small and medium‐sized enterprises (SMEs) remains limited, and evidence on barrier variation across CBMs and sectors is scarce. This study examines barriers to engagement in five CBM activities, spanning secondary raw material use, takeback, repair/maintenance, remanufacturing/refurbishment and leasing/rental, using a survey of 452 Irish SMEs in construction, manufacturing and retail/wholesale, in which respondents rated barriers for each activity. Barrier importance proves strongly contingent on CBM activity and sector, with variation also evident across firm characteristics. Only two barriers, secondary raw material costs and upfront costs of leasing/rental, are high‐priority in all sectors; several recur across sector pairs, while most bind in single activity–sector combinations. Resource‐based, institutional and contingency perspectives help explain this patterning. The findings move CBM barrier research beyond descriptive classification, provide systematic evidence on SMEs and inform more effective CE policymaking.