The role of SMEs in the Circular Economy

Small and medium-sized enterprises (SMEs) are of particular importance to national economies, not only for their contributions to the production and distribution of goods and services but also for their flexibility in adapting to technological and environmental changes. Also, their great potential for generating employment and innovative projects. They represent an excellent means to boost economic development and promote the transition to a circular model.

Small and medium-sized companies with less than 200 workers make up 99% of the companies registered in Argentina, while large companies account for 0.6% of the total. With this information, SMEs account for 98.27% of the establishments, with an employment generation of 49.41%. From these data lies the importance of addressing this issue at the scale of SMEs to achieve a natural transition to a circular model.

These companies are no strangers to the global context; measures to address the climate and environmental crisis impact production: Restrictions on access to financing, more significant obstacles to international trade, and increasing standards and requirements for emissions control. SMEs still face insufficient economic incentives and significant financing restrictions. They have great contributing potential because they are huge employers and the most widespread type of business.

Therefore, the circular economy is a viable economic model for SMEs to adopt and reconvert for the cities of tomorrow. Today's most significant challenge in promoting the transition to a circular economy is the general lack of knowledge. There is little understanding of what it is and what this economic model is for, and the performance of companies in resource management and recycling. There is a global consensus on the need for a paradigm shift in producing, marketing, and consuming our products and services within this framework. But together with public policies, the fundamental role is played by the commitment of companies, SMEs, and entrepreneurs to incorporate circularity concepts into their production processes.

The circular economy has established itself as a model for development that combines competitiveness, innovation, and sustainability. A new vision of the economic system is taking on an increasingly predominant role in the agendas of small and medium-sized companies.

To promote this agenda, the Green Productive Development Plan was launched. It holds an investment of more than 10 billion pesos through different technical and financial support tools for developing suppliers in the green economy, promoting circular production processes, and environmental adaptation in more than 3,500 Argentine companies in various sectors.

The Green Productive Development Plan is a comprehensive plan that brings together the three dimensions of sustainability: it foresees, through product development, articulates macroeconomic sustainability with social sustainability, generates jobs from the recovery of national production, and simultaneously articulates them with environmental sustainability

This focuses on four points:

1)  Promote a national industry for the green economy.

2)  Fostering the transition to a circular economy.

3)  To promote sustainable production for greater competitiveness.

4)  Promote sustainable industrialization of natural resources associated with the development of national suppliers and the integration of local stakeholders.


Among the strategic lines, progress will be made in promoting sustainable mobility, the production of green hydrogen, green industrialization (green steel, green copper, green paper, among others), and sustainable construction. We will promote companies as suppliers of the energy transition, the Green SMEs Plan, the National Sustainable Mining Plan, and the National Circular Economy Plan will be carried out.

This plan will promote productivity, competitiveness, and product differentiation through innovation and eco-design to improve access to dynamic markets. It will also promote circular production processes and the gradual reduction and reuse of unused materials.

In addition, we will promote the use of renewable energies, the production of national equipment, and the reduction of energy consumption as a strategy to improve competitiveness. It will also enable the resilience of small and medium-sized enterprises to reduce the vulnerability of production systems and regional economies to climate change. It will also deepen the work that the Ministry has been doing to have a sustainable mining industry. Through the Strategic Mining Development Plan, where different economic and social sectors of Argentina, in a participatory manner, incorporate the environmental dimension and precepts for the development of sustainable and inclusive mining industry.

Environmental standards and emissions requirements will be monitored through environmental adaptation, traceability, and resource and energy efficiency. We want to promote the industrialization of natural resources associated with the development of domestic suppliers, with strict environmental control and processes of inclusion of local stakeholders.

Central actions of the Green Productive Development Plan:

The Ministry of Productive Development will promote the development of Green SMEs through training and technical assistance; Manufacturers of equipment for the recycling industry; equipment for the control of effluents, emissions, and waste; energy-efficient industrial engines are incorporated as strategic sectors within the framework of the Supplier Development Program (PRODEPRO). The "Soluciona Economía del Conocimiento" Program will be launched to promote the development and implementation of innovative solutions, products, or services generated by the Knowledge Economy sectors that contribute to the transition toward a circular economy; the Solar Thermal Industry Development Program will work on the supply of solar water heaters through technical assistance and financing, and product certification (INTI); We will work to increase the productive capacity of cooperatives and SMEs in waste recovery; we will work with the industry to promote the local manufacture of electric bicycles; we will work on the reconstruction of a cluster of national companies, with the production of goods and services in renewable energy generation, forming a National Renewable Cluster. We will promote the creation of a special regime to promote both the demand and the supply of non-conventional mobility technologies.