Breaking the barriers to circular economy in the Dutch textiles industry

Abstract

Recently, large sample studies were conducted mapping the most pressing barriers for transitioning to circular economy [CE] within the EU. These lead to the conclusion that CE remains a niche discussion among sustainable development professionals and significant efforts are required to push for a transition to CE. Since EU economies are largely driven by SMEs[1] this study examines sector specific barriers to CE for SMEs of an important economic sector in the EU, the Dutch textiles sector [2]. Consequently, insights are established for business models and policy makers to steer a CE transition across industries. 47 Expert interviews were conducted with manufacturers and retailers to map sector specific barriers. The main findings conclude that SMEs of the Dutch textiles industry are mostly hindered by market barriers, specifically high costs for producing and/or selling circular products. Because of these high costs, SME’s face a widespread lack of consumer interest. Both barriers appear to be the result of a chain-reaction. Firstly, limited knowledge and design choices make delivering high quality circular products difficult. Secondly, limited availability of consistent circular supply streams combined with a linear supply chain put constraints on the volume and logistics needed to make a cost-competitive CE product or service. Interestingly, the problem caused by these pressing barriers takes place at a wider sector level (the regime), whereas strategies implemented by companies are focussed internally in their own niche bearing zero to low results. To conclude, policy makers are suggested to work together with organisations that have an overarching position in the sector and economy acting as a bridge for catalysing CE related interactions inbetween players at the regime level. These organisations are phrased as ‘Matchmakers’. ‘Matchmakers’ working together with policymakers can tackle the identified pressing barriers responsible for the chain reaction at the root of the problem eventually breaking the barriers to CE for the Dutch textiles industry and thus accelerating its transition from a linear to a circular paradigm.

[1] SMEs account for 90% of all firms in the EU and create 2 out of every 3 jobs [2] Identified as high textile consuming country and front running economy in terms of CE focussed firms