Circular economy drivers and sustainable innovation among Omani entrepreneurs: the role of opportunity recognition

The circular economy (CE) promotes maximizing product utility and minimizing total material throughput to benefit the environment and economy. Circular innovation is gaining prominence as a path to sustainability alongside the circular economy; however, its implementation remains a challenge. This study investigated the relationship between circular economic drivers and innovation through sustainable opportunity recognition among Omani entrepreneurs. The study employs a quantitative methodology by collecting data through surveys distributed to 320 respondent start-ups and entrepreneurs in a range of industries, such as digital ventures, sustainability-focused businesses, and green startups. To examine the relationship between the variables, 268 surveys were conducted and analyzed using SmartPls 4.0. The findings show that cultural, and political drivers are positively associated with innovation, and cultural, technological and political drivers are positively linked with proactive and competitive scanning of opportunities, whereas technological has no positive association with innovation. The mediating analysis confirmed that competitive scanning of opportunities and proactive searching for opportunities partially mediate the relationship between drivers and innovation. This study offers insightful academic, policy, and practical ramifications for enhancing opportunity recognition and accelerating Oman’s shift to an innovative, sustainable economy.