The challenges in adoption of circular economy in SMEs – a research agenda and way forward

PurposeThe circular economy (CE) represents an industry-wide transition from linear to circular processes. There has been a proliferation of literature on CE in the last decade. However, the existing studies on the adaption of CE in small and medium-sized enterprises (SMEs) are scarce. This study aims to develop a research agenda and the way forward for future researchers focusing on the adoption of CE.Design/methodology/approachThis article analyses the CE concepts through a Systematic Literature Review (SLR). Coding and content analysis are performed to generate emergent themes with the help of “Atlas.ti” software.FindingsThe authors uncovered the contemporary significance of adopting CE and the state-of-the-art literature on CE. The study's findings fall into four broad themes: Technical know-how, resource and process optimization, reverse practices and technology and innovation. Ten thought-provoking questions were identified in the four themes that researchers can explore further in embracing CE to achieve sustainability in SMEs.Practical implicationsThe study has highlighted the importance of CE adoption and CE's benefits to stakeholders across all three dimensions, i.e. social, economic and ecological. Practitioners can use the agenda in four themes to strengthen the practitioners' existing practices in SMEs to promote CE.Originality/valueThe study's uniqueness is the supply of current knowledge from diverse literature and practical consequences for SMEs. This study opens new lines of inquiry to adopt CE in SMEs, streamlining the existing literature into four themes to focus future research.