Driving human resources-based transformation for sustainable competitive advantage in circular economy

The circular economy (CE) has become a crucial framework for ensuring sustainability in small and medium enterprises (SMEs). However, resource limitations remain a significant challenge in achieving both sustainability and competitive advantage. This study investigates the role of the aggregator business model (ABM) in facilitating SME transformation towards sustainable competitive advantage. Using a survey of 390 randomly selected SMEs in the creative economy sector in West Java, Indonesia, data were analyzed with Structural Equation Modeling (SEM). The findings reveal that resource availability significantly relationships SME transformation, with ABM playing a moderating role in optimizing most resources, except for organizational psychological resilience. By facilitating resource configuration, ABM enhances SMEs' ability to transition towards sustainability-driven competitive advantage. This research contributes to the resource-based view by highlighting ABM's role in accelerating CE-aligned business transformation for SMEs.