The Role of Social Enterprise in Advancing the Circular Economy in Emerging Markets

Abstract

Growing environmental pressures, resource depletion and persistent socio-economic inequalities have increased the need for alternative approaches to sustainable development in emerging markets. The circular economy (CE) has gained increasing attention as an alternative to the traditional linear model of resource extraction, production, consumption and disposal, highlighting resource efficiency, waste prevention, reuse, recovery and regeneration. Social enterprises have emerged as potentially important actors in this transition due to their ability to combine economic activities with social and environmental goals. This paper explores the role of social enterprises to promote the circular economy in emerging markets through a conceptual and integrative review of relevant literature. This paper reviews the literature on social enterprise, circular economy, social innovation, inclusive value creation and sustainability transitions, with a focus on the institutional, socio-economic and infrastructural conditions in emerging markets. The review demonstrates that social enterprises have a significant role to contribute to circularity through hybrid circular business models, resource recovery and waste valorisation, inclusive waste management systems, livelihood generation, grassroots and frugal innovation and community education and behavioral change. However, their potential for broader systemic impact is limited by constraints on access to finance, infrastructure, technological capacity, regulatory or institutional weakness and fragmentation. The paper argues that social enterprises can be important bridging actors between communities, markets, governments and civil society in the transition to more inclusive circular economies. It further emphasizes the value of enabling regulations, appropriate financing mechanisms, capacity development and cross-sector partnerships in allowing social enterprises to scale circular innovations. The paper adds to the growing discourse on circular economy in the Global South by demonstrating how social enterprise can connect environmental sustainability with social inclusion, livelihood creation and locally rooted innovation. Keywords: Social enterprise, Circular economy, Emerging markets, Sustainability, Resource efficiency