Circular Economy and Environmental Performance: Strategies and Challenges for SMEs in Basque Machinery and Equipment Industry

This research explores the integration of circular economy practices in SMEs within the machinery and equipment sector in the Basque Country (Spain), aiming to identify opportunities for transitioning towards circular models. Using the Circular Business Scan methodology, 11 industrial SMEs are analyzed, identifying eco-design, eco-innovation, and resource valorization as key elements in their business models. The results demonstrate how circular economy practices enhance competitiveness by creating new business lines, reducing costs, and optimizing processes. Furthermore, the importance of practices such as repair, refurbishment, and recovery of products is highlighted. The study also emphasizes the need to develop both technical and cultural internal capabilities to support the transition to circularity. Additionally, the impact of public policies is highlighted, as they can transform the perception of the circular economy within companies, viewing it as a strategic opportunity to improve competitiveness. This work contributes to the theoretical development of circular economy in industrial SMEs, emphasizing the role of organizational and cultural factors, beyond structural variables. It also provides empirical evidence that can contribute to the formulation of public policies and support programs more tailored to the context.