Barriers and Opportunities when Transitioning from Linear to Circular Business Models: Evidence from the Construction and Manufacturing Sectors in The Netherlands

Abstract The shift from linear to circular business models is critical for sustainability in the construction and manufacturing sectors in the Netherlands. However, many companies face significant challenges in making this transition, including financial constraints, cultural resistance, and regulatory hurdles, which hinder the effective implementation of circular practices. This study employs a qualitative approach, conducting ten in-depth interviews with senior managers holding diverse positions and responsibilities from ten medium-sized enterprises. Using the purposive nonprobability sampling technique this research explores the drivers for transitioning, the barriers encountered, and the strategies used to overcome these challenges. The findings reveal that regulatory pressures, internal environmental advocacy, and market demands for sustainable solutions are key drivers of circular business practices. Barriers identified include limited budgets, high marketing costs, organisational resistance to change, and regulatory complexities. Nevertheless, companies identified various opportunities based on the interview result, such as market differentiation, enhanced sustainability, and strategic partnerships. Companies also noted improvements in brand reputation and customer loyalty as direct benefits of embracing circular practices. This research provides valuable insights into the drivers, barriers, and opportunities in adopting circular business models within the construction and manufacturing sectors in the Netherlands. The findings emphasize the importance of stakeholder engagement, continuous education, and the need for financial and policy support to overcome barriers and leverage opportunities for sustainable business growth. Lastly, this research provides recommendations for future studies including expanding the scope to different industries and regions, adopting mixed-methods approaches, and exploring the impact of specific policies and financial mechanisms on circular business model adoption.