Antecedents of circular economy orientation in maritime and fisheries SMEs: institutional, capability and cultural drivers in Bali, Indonesia
This study of 260 maritime and fisheries SMEs in Bali, Indonesia, reveals that entrepreneurial orientation, institutional pressure, green dynamic capability, and the indigenous Tri Hita Karana value system are all significant positive drivers of circular economy orientation, with environmental dynamism further strengthening the impact of entrepreneurial and capability-based factors.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
In the bustling coastal waters of Bali, the economy has long relied on the rhythm of the sea. For generations, small fishing boats and local seafood processors have operated within a system where resources are taken, used, and often discarded. This linear approach, common in many industries, creates waste that can harm the very environment these businesses depend on. A growing movement known as the circular economy offers a different path. Instead of a straight line from extraction to trash, this model imagines a loop where materials are kept in use for as long as possible. Waste becomes a resource, and products are designed to be reused or repaired. For small businesses, especially those in resource-heavy fields like fishing, adopting this mindset is not just about being green; it is about survival and resilience. However, understanding what actually drives a small business owner to think this way is complex. It involves a mix of personal ambition, outside pressure, the ability to adapt, and the deep-seated values of the community.
Researchers set out to uncover these drivers among the maritime and fisheries small and medium enterprises of Bali. They focused on four specific influences. First, there is the entrepreneurial spirit: the willingness of a business owner to take risks, innovate, and act before others do. Second, there is institutional pressure, which represents the push from laws, regulations, and the expectations of neighbors and peers. Third, they looked at green dynamic capability, a business's internal skill to spot new environmental opportunities and rearrange its resources to seize them. Finally, and perhaps most uniquely to this region, they examined the influence of Tri Hita Karana. This is a traditional Balinese philosophy that teaches harmony in three relationships: between people and the divine, among people themselves, and between people and nature. The study sought to see how these four forces combine to shape a company's commitment to circular principles.
To find the answers, the team surveyed 260 owners and managers of fishing and seafood businesses across the coastal regions of Bali. These were not large corporations, but the micro and small enterprises that form the backbone of the local economy. The researchers asked these business leaders about their strategies, their feelings toward regulations, their ability to adapt to change, and how much they valued the traditional philosophy of Tri Hita Karana. They also asked how they viewed the unpredictability of their environment, such as fluctuating fish catches or shifting market demands. By analyzing the responses, the researchers could map out which factors most strongly encouraged a shift toward circular thinking.
The results revealed a clear picture of what motivates these businesses. The study found that all four factors played a significant role in driving a circular economy orientation. The strongest influence, surprisingly, was the traditional cultural value system. Business owners who deeply embraced the philosophy of Tri Hita Karana were the most likely to integrate circular principles into their strategy. This suggests that for these communities, caring for the ocean and reducing waste is not just a business tactic but a moral and spiritual duty rooted in their identity. The desire to innovate and take calculated risks also proved to be a powerful driver, as did the ability to sense and seize green opportunities. External pressure from regulations and community expectations also helped, though it had a slightly smaller impact than the internal drivers.
The study also discovered that the environment in which these businesses operate changes how they respond. When the external world is stable, a business's natural drive to innovate or its ability to adapt matters, but when conditions become volatile—such as when fish stocks fluctuate wildly or market prices swing unpredictably—the importance of these internal strengths increases. In times of high uncertainty, business owners who are naturally entrepreneurial or who possess strong adaptive skills are even more likely to turn to circular solutions as a way to secure their future. Interestingly, the unpredictability of the environment itself did not directly cause a shift to circular practices; rather, it acted as a catalyst that amplified the effectiveness of the owners' own skills and mindsets.
This research highlights that the path to a sustainable economy in places like Bali is not paved by regulations alone. While rules and external pressures matter, the most potent force for change appears to be a blend of local culture and internal capability. The study suggests that encouraging circular practices in these coastal communities requires more than just compliance; it involves tapping into the deep cultural respect for nature and supporting the development of skills that allow small businesses to adapt and innovate. By understanding that the drive to protect the environment is often woven into the very fabric of a community's identity, policymakers and supporters can craft more effective strategies that resonate with the people they aim to help. The findings confirm that in the complex world of small-scale fisheries, the most enduring motivation for change often comes from within, guided by the timeless values of the place itself.
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