[UEH Podcast #2] Transition from linear economy to circular economy: Barriers and suggestions for Vietnam

Ho Chi Minh City, October 21, 2024 – In the context of excessive consumption and production pushing the planet to its limits, sustainable development is no longer a choice but an imperative. The circular economy emerges as a key solution to optimizing resource use and minimizing waste. However, transitioning from a linear to a circular economy model in Vietnam faces numerous challenges.

Studies have identified several key barriers:

• Cultural Barriers: Consumer habits, lack of specialized skills, and traditional management mindsets.
• Technical Barriers: Insufficient technological innovation, infrastructure capacity, and digitalization.
• Economic Barriers: High investment costs, competitiveness issues, and limited access to capital.
• Environmental Barriers: Difficulties in environmental impact assessment and management.
• Governance Barriers: Inconsistent policies and complex procedures.
• Structural Barriers: Lack of collaboration among stakeholders in the value chain.

Small and medium-sized enterprises (SMEs), however, face additional challenges such as risk aversion, short-term thinking, and a lack of knowledge about circular economy concepts.

According to the Triple Helix Model:

• The State plays a guiding role through policy, taxation, and public awareness.
• Businesses must adopt circular models such as recycling, reusing, and sustainable design.
• Civil society and educational institutions contribute to fostering a culture of responsible consumption and enhancing skills.

This transition requires cross-sector and cross-stakeholder cooperation. UEH Sustainable Finance Institute recommends focusing on promoting sustainable business models for SMEs, which dominate Vietnam's economy. The collaboration between the State, Businesses, and Universities is crucial in advancing the circular economy in Vietnam.

See more at [Podcast] Chuyển đổi từ kinh tế tuyến tính sang kinh tế tuần hoàn: Rào cản và gợi ý cho Việt Nam – Đại học Kinh tế TP. Hồ Chí Minh (UEH)