Journal of Industrial and Systems Engineering

Journal of Industrial and Systems Engineering

Environmental Sustainability Business Model with an Emphasis on Circular Economy in Small and Medium-Sized Technology Enterprises(SMEs)

Document Type : Research Paper

Authors
Meisam Marbaghi 1
Sirous Tadbiri 1
Abas Asadi 2
Mahmonir Bayanati 3
1 Department of technology Management, Ro.C., Islamic Azad University, Roudehen, Iran
2 Department of Business Management, VaP.C., Islamic Azad University, Varamin, Iran
3 Department of technology Management, Health and Industry Research Centre, WT.C., Islamic Azad University, Tehran, Iran
Abstract
The increasing environmental challenges associated with resource depletion, waste generation, and climate change have intensified the need for sustainable business practices across industries. Small and medium-sized enterprises (SMEs) in the technology sector face unique sustainability challenges due to rapid technological advancement, resource-intensive operations, and growing environmental expectations from stakeholders. This study aims to develop an environmental sustainability business model with an emphasis on circular economy principles for technology-oriented SMEs. Drawing upon the concepts of sustainable business models and circular economy, a conceptual framework was developed and validated through expert evaluation using a Design Science Research approach. The proposed model integrates four key dimensions: organizational enablers, circular economy practices, environmental sustainability outcomes, and business performance outcomes. The findings indicate that effective implementation of circular economy practices contributes to waste reduction, resource efficiency, energy optimization, and carbon reduction while simultaneously enhancing innovation capability, competitive advantage, organizational resilience, and sustainable growth. The study provides both theoretical and practical contributions by offering an integrated framework that supports the transition of technology SMEs toward environmentally sustainable and economically viable business operations
Keywords
Environmental Sustainability
Circular Economy
Sustainable Business Model
Technology SMEs
Business Performance
Subjects
Abdi, H., Jahanian, A., & Nozari, H. (2025). Digital twin-enabled bioreactors: transforming industrial biotechnology in smart economies. In Dynamic and Safe Economy in the Age of Smart Technologies (pp. 105-120). IGI Global Scientific Publishing.
Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42–56. https://doi.org/10.1016/j.jclepro.2013.11.039
Brendzel-Skowera, K. (2021). Circular economy business models in the SME sector. Sustainability, 13(13), 7059. https://doi.org/10.3390/su13137059
Caldera, H. T. S., Desha, C., & Dawes, L. (2019). Exploring the characteristics of sustainable business models in SMEs. Journal of Cleaner Production, 232, 1343–1356. https://doi.org/10.1016/j.jclepro.2019.05.343
Cavallo, A., Ghezzi, A., Dell’Era, C., & Pellizzoni, E. (2021). Fostering sustainable business model innovation in SMEs through fintech and circular economy approaches. Journal of Cleaner Production, 281, 125217. https://doi.org/10.1016/j.jclepro.2020.125217
Geissdoerfer, M., Savaget, P., Bocken, N. M. P., & Hultink, E. J. (2017). The circular economy – A new sustainability paradigm? Journal of Cleaner Production, 143, 757–768. https://doi.org/10.1016/j.jclepro.2016.12.048
Kirchherr, J., Reike, D., & Hekkert, M. (2017). Conceptualizing the circular economy: An analysis of 114 definitions. Resources, Conservation and Recycling, 127, 221–232. https://doi.org/10.1016/j.resconrec.2017.09.005
Kuik, S., Kumar, A., Diong, L., & Ban, J. (2023). A systematic literature review on the transition to circular business models for small and medium-sized enterprises (SMEs). Sustainability, 15(12), 9352. https://doi.org/10.3390/su15129352
Lüdeke-Freund, F., Gold, S., & Bocken, N. M. P. (2019). A review and typology of circular economy business model patterns. Journal of Industrial Ecology, 23(1), 36–61. https://doi.org/10.1111/jiec.12763
Merli, R., Preziosi, M., & Acampora, A. (2018). How do scholars approach the circular economy? A systematic literature review. Journal of Cleaner Production, 178, 703–722. https://doi.org/10.1016/j.jclepro.2017.12.112
Nosratabadi, S., Mosavi, A., Shamshirband, S., Zavadskas, E. K., Rakotonirainy, A., & Chau, K. W. (2019). Sustainable business models: A review. Sustainability, 11(6), 1663. https://doi.org/10.3390/su11061663
Pieroni, M. P. P., McAloone, T. C., & Pigosso, D. C. A. (2019). Business model innovation for circular economy and sustainability: A review of approaches. Journal of Cleaner Production, 215, 198–216. https://doi.org/10.1016/j.jclepro.2019.01.036
Ranta, V., Aarikka-Stenroos, L., & Mäkinen, S. J. (2018). Creating value in the circular economy: A structured multiple-case analysis of business models. Journal of Cleaner Production, 201, 988–1000. https://doi.org/10.1016/j.jclepro.2018.08.072
Riemer, W., Tabares, S., & Parida, V. (2025). Small and medium-sized enterprises and the circular economy: Leveraging ecosystem strategies for circular business model implementation. Journal of Small Business Management, 38(2), 1–24.
Saidani, M., Yannou, B., Leroy, Y., Cluzel, F., & Kim, H. (2020). How circular economy and industrial ecology concepts are intertwined? A bibliometric and text mining analysis. Sustainability, 12(3), 875. https://doi.org/10.3390/su12030875
Journal of Industrial and Systems Engineering
Volume 18, Issue 1
Winter 2026
Pages 57-66

  • Receive Date 10 January 2025
  • Revise Date 02 April 2025
  • Accept Date 22 May 2025