NCIER INSIGHT REPORT: SMALL AND MEDIUM ENTERPRISES AND THE CIRCULAR ECONOMY

CE HUB, 2025

NICER PROGRAMME INSIGHT REPORT

Small and Medium Enterprises (SMEs), defined as businesses employing between 0 and 249 employees, constitute 99.9% of the UK’s private sector and account for 52% of the total UK business turnover in 2022 (BEIS, 2022). Collectively, they represent a significant section
of the economy that could drive substantial impact in the UK’s transition to a more circular economy (CE), aligning with national decarbonisation targets. This transition is crucial for sustainable economic growth and environmental stewardship in the face of growing resource scarcity and challenges posed by climate change.

Previous policy and research findings have identified numerous challenges that SMEs face in engaging, adopting, and implementing CE principles. These challenges, summarised in Annex 2, range from financial constraints to lack of technical expertise and regulatory barriers. However, the potential for SMEs to contribute to and benefit from the CE remains significant and largely untapped.

This report highlights key learnings from the UK Research and Innovation (UKRI) National Interdisciplinary Circular Economy Research (NICER) Programme, which throughout its lifespan engaged over 200 SMEs. We identify new insights and focus on specific examples
of how SMEs have overcome challenges in adopting CE practices. The evidence and insights presented were collected from experiences and interactions with numerous businesses across each of the UKRI Circular Economy Centres (CECs) within the NICER Programme, as summarised in Annex 3.

Over 10 sections, we present insights and learnings across key areas of activity. The report concludes with five overarching insights and corresponding recommendations that can be implemented in policy and practice to support SMEs in engaging with CE principles appropriate to their maturity levels and capabilities. These recommendations aim to provide a roadmap for policymakers, industry leaders, and SMEs themselves to navigate the transition towards greater circularity in the UK economy.