Sustainability

Natural Capital

8th June 2020

Shouq Alshehhi
FLOC – For the Love of Coffee Marketing Management

Table of Contents

Abstract......................................................................................................................................2

Keywords...................................................................................................................................2

Introduction................................................................................................................................2

Literature Review.......................................................................................................................2

Analysis......................................................................................................................................3

Summary....................................................................................................................................4

Discussion..................................................................................................................................4

References..................................................................................................................................5

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Abstract
Unlike other economic models, the circular economy model is based on the efficient
production and usage of resources. This study is focused on the small and medium sized
enterprises (SMEs) of the Gulf Cooperation Council countries, particularly Kuwait. The aim
is to minimize the impact to the environment with efficient resource allocation because SMEs
are the least efficient.

Keywords
Circular Economy, Efficiency, SMEs, Economic Model.

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FLOC – For the Love of Coffee Marketing Management

Introduction
Since the beginning of the last decade of the 20 th century, global focus on sustainable
solutions has been on the rise. Companies have started to look for efficient and
environmentally friendly solutions to their operations, in hopes of avoiding environmental
damage. Most economic models pose a threat to the environment, but the circular economy
model does not.

Through innovation and investment in resource-efficient technologies, the industrial world

can move towards sustainable operations. This is most important for SMEs; they must
remove the barriers they face to work towards this direction. They can do so by following
in the footsteps of larger companies who have achieved this feat. Innovation and
Investment in Resource-Efficient Technologies is implementable for SMEs because they
are good adopters and bad wasters.

Literature Review
The circular economy, also known as the green economy, has gained much traction since
the sustainability efforts started. Having its roots in the classical political economic theory,
there have been a couple of researches on this framework, some talking of successful
implementations, whereas others, criticizing the system[ CITATION Mar16 \l 1033 ].
Through this economic model, it is believed that greener practices can be implemented
across industries, especially in Kuwait. Although it’s major intent was to be implemented
in waste management industries, it has been implemented in others as well [ CITATION
Reu16 \l 1033 ]. For example, the gold, silver and platinum manufacturing industries can
use this approach to recycle these precious metals. Another example is the recycling of
precious metals from old phone handsets.

The most successful nations to have been able to implement this economic model have
been the European nations. Their actions have been in line with the Kyoto Protocol and
have resulted in a resource management system[ CITATION Nel16 \l 1033 ]. Although
China has implemented this model as well, they are yet to perfect its implementation in
their nation. Research shows that this economic model is implementable on enterprises,
and is not only secluded to the waste management industry[ CITATION LiS12 \l 1033 ].

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However, there have been criticisms about this approach to economic operations of
industries. One criticism states that the recycling may include toxic substances, the risk of
which should not be taken by companies [ CITATION Les16 \l 1033 ].

Analysis
In this modern day and age, where natural resources are depleting and the environment is
frail, industries have started innovating. Innovation is driven by 4 basic features:
technological advancement, changing customer needs, intensified competition and a
changing business environment. The most prominent contributors to innovation are usually
SMEs, because their incremental innovations lead to more prominent innovations at
multinationals. However, the collaborative effort of policy development, risk tolerance and
public-private partnerships is needed for innovation to take place effectively. The public-
private partnerships will give the implementation of the circular economy some financial
strength. The implementation will need this financial support because this task is not
possible for the government alone. Since this will be a relatively newer approach to the
economy, there will be risks involved.

In order for companies to be innovative, they need to have mindsets that think in a
sustainable direction. The sustainability element of industries is built on the reduced usage
of resources and impact to the environment. The most significant part of a company that
would be involved in sustainability efforts on ground would be supply chain. Through
their efforts, they will be able to mobilize resource efficiency at the organization through a
redesign or by-product utilization. Another way to achieve sustainability is through joint
production systems, thereby creating synergies between companies through their joint
operations.

For companies to effectively implement resource efficiency, they need to understand the
concept of zero waste. This concept entails that resources must be utilized in such a
manner that nothing is wasted. Such has been the nature of the best practices adopted by
companies across globally in the domain of zero wastes. However, this is not entirely
possible without economic incentives in this pre-dominantly capitalistic global economy.
Hence, greener production must be encouraged through incentivization of such efforts.
This will enable companies to restructure their operations & make them resource efficient,
innovative & sustainable.

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Summary
This research paper talks about the sustainability efforts that SMEs in Kuwait can adopt
and revitalize the industry. The circular economic system is a framework that can help
SMEs in achieving this feat. There have been countries in the past who have been able to
achieve this successfully in their nations. The circular economy is suitable because it is
based on the principles of innovation, sustainability and efficiency. However, for all this to
work out, the industry, academia, businesses and governments will have to be
collaborative with SMEs. Through this collaboration, the establishment of a system of
open innovation and sustainable products will be possible. This will ultimately lead to the
practices of a circular economy being available for implementation at the SMEs level. This
is based on the fact that SMEs are the most innovative and the most wasteful of all
enterprises.

Discussion
Kuwait, along with other GCC countries, have heavily relied on their oil business for much of
their earnings. It has been this way for many years, as these countries have been abundant in
their oil resources. However, with the decline in oil prices and the increasing focus on
environmentally friendly practices, this earning has to change. It is a global movement to
move industries to cleaner and greener practices, and so should the GCC countries. These
countries can adopt a multitude of recycling practices to begin this journey of change. But for
this to be effective, the governments and legislatives will have to incentivize and endorse it in
the beginning.

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References
Leslie, H. A., Leonards, P. E., Brandsma, S. H., Boer, J., & Jonkers, N. (2016). Propelling
plastics into the circular economy — weeding out the toxics first. Environment
International, 230-234.
Li, S. (2012). The Research on Quantitative Evaluation of Circular Economy Based on Waste
Input-Output Analysis. Procedia Environmental Sciences, 65-71.
Martins, N. O. (2016). Ecosystems, strong sustainability and the classical circular economy.
Ecological Economics, 32–39.
Nelles, M., Grünes, J., & Morscheck, G. (2016). Waste Management in Germany –
Development to a Sustainable Circular Economy? Procedia Environmental Sciences,
6–14.
Reuter, M., & Schaik, A. (2016). Gold – A Key Enabler of a Circular Economy: Recycling of
Waste Electric and Electronic Equipment. Gold Ore Processing , 937–958.

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