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

Recently the circular economy has got a lot of attention within discussions of policy makers,
academics and practitioners. The circular economy proposes the treatment of environmental and
climate change problems, simultaneously promising benefits for the business. The circular economy
promotes the reduction of the consumption and reuse or recycling of the resources that in various
aspects contradicts traditional business models that stream to linear growth of sales of their
products. Yet the circular economy concept has been more discussed regarding its global scale, but
there is a lack of scientific discussions about the approaches of the adoption of circular economy
principles on the business level. This paper conceptualises multi-level dimensions of the circular
economy and highlights challenges related to the perception of the circular economy principles in
the micro business level. The conducted research shows that rural SMEs of six analysed 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 forming good base
for developing circular business models, they are reluctant towards introducing new business
models. This paper aims to assess the level of the advancement in introduction of the circular
business models among rural SMEs of EU countries. This article emphasizes the circular economy
as an inseparable part of the business models of rural SMEs and rural economies of EU countries.
This study has a policy implication as we suggest that the government should play an important
role in promotion of circular business models in rural SMEs. The existing public support system is
fragmented, and in most cases just incidentally encourage rural SMEs to adopt new circular
business models. Also, the circular economy on a local level, especially in rural areas, has an
important role in ensuring social wellbeing of local inhabitants. The methodological approach and
research results presented in the paper can be used further developing EU support system and
priorities beyond 2020.